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A New York judge has denied a motion to dismiss a lawsuit accusing four nursing homes, including the Beth Abraham Center for Rehabilitation and Nursing, of defrauding Medicare and Medicaid and neglecting residents. The case, brought by New York Attorney General Letitia James, alleges the misappropriation of over $83 million in funds and claims the nursing homes subjected residents to severe neglect.

Abraham Center $83M Fraud Suit : Judge Rejects Dismissal Effort

On Friday, Justice Melissa A. Crane rejected arguments from the Beth Abraham Center, along with the Buffalo Center for Rehabilitation and Nursing, the Holliswood Center for Rehabilitation and Healthcare, and the Martine Center for Rehabilitation and Nursing, which contended that the court lacked jurisdiction over some defendants and that the attorney general's office had no standing to pursue the claims. The defendants argued that the state's allegations of wrongdoing before November 2016 were time-barred, but the judge sided with the state, citing the "continuing wrong" doctrine, which extends the statute of limitations in cases involving persistent illegal activity.

Abraham Center $83M Fraud Suit : Allegations of Fraud and Neglect

The lawsuit, filed in June 2023, claims that the nursing homes, controlled by Centers for Care LLC, funneled millions intended for patient care into other areas, neglecting the health and well-being of residents. Attorney General James' office alleges that Kenneth Rozenberg and Darryl Hagler, both 50% owners of Centers for Care, orchestrated these schemes, which included forcing inflated rental payments through excessive lease agreements.

The state also contends that the nursing homes violated New York Executive Law Section 63(12), allowing the attorney general to seek court orders to stop fraudulent practices. Additionally, claims were made under the Tweed Law, aimed at recovering misappropriated funds, and allegations include false Medicaid certifications and fraudulent fees paid to service providers.

Continuing Neglect of Residents

The lawsuit paints a dire picture of life inside the nursing homes, detailing instances where residents were left without adequate care due to insufficient staffing. The suit claims residents were often left in soiled clothing for extended periods, lacked assistance with basic hygiene, and experienced the theft of personal belongings.

The court also found that the attorney general’s unjust enrichment claim was not duplicative, allowing it to proceed as an alternative basis for recovery.

Looking Ahead

While the court has allowed the case to move forward, it marks a significant step in holding the nursing home operators accountable for the alleged neglect and financial misconduct. The nursing homes and their operators are represented by attorneys from Quinn Emanuel Urquhart & Sullivan LLP, Centricity Law PLLC, and Ganfer Shore Leeds & Zauderer LLP. The state is represented by a team from the New York Attorney General’s Office.