Nursing home operator Centers Health Care and its owners are facing a lawsuit filed in state court by New York State Attorney General Letitia James.

James filed the suit accusing Centers Health Care and its owners of stealing $83 million in government funding. Meanwhile, facilities remained understaffed, resulting in widespread neglect toward nursing home residents and in some instances severe illness and even death.

James is seeking to block four facilities in New York from admitting new residents until the facilities are properly staffed and include financial and healthcare monitors that will ensure the care centers are in compliance. James is also seeking to have the facility owners and operators pay back the $83 million stolen.

The four centers include Beth Abraham Center for Rehabilitation and Nursing in the Bronx; the Buffalo Center for Rehabilitation and Nursing; Holliswood Center for Rehabilitation and Healthcare in Queens and Martine Center for Rehabilitation and Nursing in Westchester.

The owners of the care centers, Kenneth Rozenberg and Daryl Hagler, are accused of orchestrating and engaging in the alleged fraud. The complaint explains that Rozenberg, Hagler, and others relied on sham contracts from a complex network of companies they either created or partnered with in order to funnel funds from Medicare, Medicaid, and other government entities offering funding designed for patient care. James alleges that the operation went on for at least a decade.

The lawsuit explains that the owners of the care centers funneled money through a variety of methods. Hagler is accused of charging the operating companies exorbitant rental fees for the realty which he owned. Meanwhile, Rozenberg is accused of contracting with a staffing company that was owned by his daughter and paying the company millions of dollars through center-affiliated entities despite never having a contract in the first place.

Additionally, both company owners and others are accused of transferring funds between different companies and other entities under their control through no-interest loans, many of which were never paid back.

This elaborate method in which the defendants were able to circulate and collect money helped to fuel their lavish lifestyle, but did so at the expense of the nursing home residents, accuses James.

“The owners of Centers Health Care allegedly used these four nursing homes — and the vulnerable New Yorkers who lived there — to extract millions of dollars for their personal use, leading to elderly residents and those with disabilities suffering unconscionable pain, neglect, degradation, and even death,” James shared in a statement

The lawsuit details several cases in which facility neglect led residents to suffer. One instance involved a man who developed sepsis and died after he was left with untreated bed sores that turned into ulcers. Another woman fell out of bed and was found unconscious on the floor by her visiting daughter. The woman was later evaluated and was found to have a brain bleed, resulting in brain damage. Another man who suffered from dementia wandered away from the facility after being left unsupervised.

The lawsuit continues that residents were routinely left in soiled diapers and that when residents called for help, their requests went unanswered. Graphic images of the residents show them disheveled, bruised, unkempt, and overall neglected.

When the COVID-19 pandemic ravaged the state, the nursing home facilities did not provide staff members with masks and other PPE and failed to implement or follow mitigation measures to stop the spread of the virus. The lawsuit explains that over 400 residents died at the start of the pandemic in 2020 in part because appropriate safety measures were not taken across the four nursing homes.

“Rather than honor their legal duty to residents to provide the highest possible quality of life, Center's leadership and their associates seized every opportunity to put personal profit over resident care,” James alleged.

A spokesperson with Centers Health Care, Jeff Jacomowitz, has vehemently denied the allegations and said the company is ready to fight the case in court. Jacomowitz maintained, “We will fight these spurious claims with the facts on our side.”

This lawsuit comes after the AG filed a similar lawsuit that accused the owners of the Village of Orleans Health and Rehabilitation Center in Albion of stealing $18 million while neglecting to care for residents.