NY Attorney General Sues Nursing Home for Resident Neglect, Fraud

Nursing home negligence lawyers are watching a new lawsuit filed by New York Attorney General Letitia James against a New York nursing home alleging fraud and neglect. According to the Office of the Attorney General, the lawsuit follows an in-depth investigation of The Village of Orleans Health and Rehabilitation Center (The Villages). The attorney general alleges that the owners took advantage of the state’s Medicaid program to drive profits rather than providing adequate staffing and patient care at the facility. Nursing home negligence lawyers believe this indictment is a reflection of an industry plagued with bad actors who often prioritize profits over quality resident care.

According to Attorney General, the nursing home and its owners failed to uphold their duty of care, and that breach of duty resulted in neglect, harm, and abysmal resident care. The lawsuit alleges that the owners diverted funds intended for resident care to increase personal profits from the company. The financial scheme involved a complicated web in which the owners established multiple companies in which to siphon the funds. The sole owner of the Villages, as well as multiple family members are named in the lawsuit, and are referred to as “owners.” Nursing home negligence lawyers have seen multiple examples where complex ownership models are used to funnel profits away from residents and into the hands of owners.

The owners established Telegraph Realty LLC to buy the real property that the Villages lies on in January 2015. Afterwards, the Villages paid rental fees to Telegraph Realty. The Villages owners also have ownership interest in Comprehensive Healthcare Management Services (CHMS) Group LLC, which provides administrative services such as accounting, insurance billing, and payroll to the Villages.

Between 2015 and 2021, the Villages paid over 20% of its operating budget – approximately $18.6 million – to Telegraph and CHMS. Within four months after the owners purchased the Villages, the facility’s star rating plummeted from 3 stars to 1 star, the lowest possible quality rating.

Residents Suffered Harm from Neglect

Nursing home negligence lawyers who have reviewed the lawsuit state that it cites multiple instances of harm caused by the owners’ neglect. The OAG asserts that insufficient staffing driven by the owner’s financial scheme resulted in poor quality care, abuse, and neglect. Residents reported being forced to sit in their own waste for hours on end. Some residents developed infections, such as sepsis and gangrene from pressure ulcers that were not properly cared for. Other residents suffered falls from lack of supervision, and others became malnourished or dehydrated from lack of necessary care.

The already horrendous quality of care only worsened during the COVID-19 pandemic. During this time, nursing home management sought to hide positive cases of COVID-19 and failed to implement protocols for quarantining infected residents and staff members. The owners failed to provide personal protective equipment (PPE) to staff and forced sick staff members to work. Despite dangerously low staffing levels, the owners sought to increase resident admissions to drive up revenue and profits.

Some Named Respondents Also Indicted for Health Care Fraud in Pennsylvania

Multiple respondents are named in the complaint, including Bernard Fuchs, and several family members including Gerald and Tova Fuchs, Joel Edelstein and Israel Freund. Other named respondents include Ephram Lahasky, Benjamin Landa, Joshua Farkovits, Teresa Lichtschein, Debbie Korngut, and Sam Halper. The Villages of Orleans, LLC, CHMS Group LLC, and ML Kids Holding LLC are also named.

The OAG investigation determined that despite official paperwork stating that the Villages is owned by Bernard Fuchs, he had limited responsibility. They allege that David Gast, Ephram Lahasky and Sam Halper primarily owned and operated the Villages.

Sam Halper and Comprehensive Health Care Management Services (CHMS) Group LLC are also named defendants in an August 5, 2022, indictment by the United States District Court for the Western District of Pennsylvania. This indictment names Sam Halper as having ownership interest and a management role in approximately 16 health care facilities known collectively as CHMS facilities. This indictment included 15 counts against the defendants including staffing falsifications and Medicare and Medicaid reimbursement fraud. The Pennsylvania Attorney General, Josh Shapiro, blamed Sam Halper and other senior administrators for using “criminal schemes” aimed at defrauding federal programs to increase profits while putting the care of nursing home residents in jeopardy.

Remedies Sought

The OAG investigation determined that the owners of the Villages acted repeatedly to perpetrate fraud which include an intentional understaffing. As a result of their actions, residents suffered significant emotional and physical harm, while the owners netted substantial financial profits. The Office of the Attorney General (OAG) is using this lawsuit to force the owners to return the fraudulently received funds. The OAG also wants to enforce a stop on admissions and appoint a healthcare monitor to improve care.

Contact the Wieand Law Firm, LLC Today

Nursing home negligence lawyers have litigated many cases in which nursing homes purposefully understaff their facilities and falsify records to increase their profits. The Philadelphia personal injury attorneys at the Wieand Law Firm believe that litigating these cases is critical to holding nursing home owners and operators liable for resident injury and neglect from understaffing. If your loved one suffered an injury from nursing home understaffing, call 215-666-7777 today to speak directly to an attorney for a free consultation.

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