New York Attorney General Letitia James sued Cold Spring Hills Center for Nursing Rehabilitation in Woodbury for allegedly diverting over $22.6 million in Medicaid and Medicare funds to the owners' pockets.
The report alleges the 588-bed facility used 13 companies and three fraudulent schemes to create the appearance of paying for services for the nursing home when in fact the money was diverted for personal profit, according to the Dec. 16 press release. The "complex network of companies" was also used to hide the real owners.
As a result of the fraud, residents were neglected and endangered. Family members of residents reported unclean facilities and broken critical care equipment such as wheelchairs and showers. Residents were routinely neglected, suffered improper wound care, and were not provided adequate nutrition, medication or sanitation, according to the press release.
The lawsuit alleges the nursing home owners transferred more than $42.4 million to its owners and related parties between 2016 and 2021. It outlines the following fraudulent payments:
- Paid more than $15.3 million in "rent" to a realty company that the same individuals owned.
- Paid more than $5.2 million to several deceptive entities for "consulting."
- Engaged in a $2 million fraudulent promissory note scheme when purchasing the facility.
- Funneled another $10.6 million in self-dealing transactions through fake insurance companies.
- Diverted $8.1 million through a pretend services and supplies company.
With the lawsuit, Ms. James seeks to prevent new resident admission, install monitors to oversee the facility's operations and finances, and ban existing or hidden owners from their roles.