How a Nursing Home Owner Bleeds the Facility of Money Through Understaffing and Related Companies

Related Entities Hide Nursing Home Facility Profits

By using a web of related companies, a nursing home owner can steal money intended for resident care and line his own pockets. Unfortunately, in this common scenario, the patient loses because they usually endure poor care and a lack of staff in the facility.

When a nursing home owner puts profits before people and understaffs the facility, preventable injury occurs.

James Square Nursing and Rehabilitation Centre: A Troubled Nursing Home Facing Serious Allegations

James Square nursing home in Syracuse, New York may be a prime example of how a nursing home owner can divert money from the facility and take those dollars as ill-gotten profits. Our Syracuse nursing home abuse attorneys explain the allegations against James Square’s former owners.

In a pending class action case against the James Square nursing home, the Plaintiff attorneys claim that the owners of the James Square facility “decided to make as much money as they could by running James Square nursing home into the ground.” The lawyers allege that the owners schemed and conspired to divert money intended for resident care into related companies, in which they had a financial interest.

How a Nursing Home Can Profit Significantly through Understaffing the Facility

We have previously posted about the significance of staffing levels in a nursing home. Less staff = more accidents like bedsores, falls and nursing errors. That being said, it is critical that a nursing home owner take incoming Medicare money and hire enough nurses and aides to care for the residents. That is precisely why the federal taxpayer dollars are paid to the facility.

In the class action against James Square, it is alleged that the Syracuse nursing home ownership did just the opposite. The lawsuit alleges that owners Abraham Gutnicki, Judy Kushner and Eliezer Friedman purchased the facility in 2015. They then allegedly arranged to siphon money from the facility into their own pockets.

By and large, hiring staff is the most expensive endeavor for a nursing home. Medical equipment, food, electric… these all pale in comparison to what it costs to have human beings work 40 hours per week to care and supervise residents. For this reason, when we analyze a nursing home’s budget and expenditures, we often find that the facility is understaffed. It is the easiest way to make more profits. Usually, it is the night shift that is the most understaffed. This is because most family visits occur during the daytime hours.

A Constellation of Related Companies

Kaiser Health performed a deep dive into the money flows in and out of nursing homes. It appears that payments from one related company to another are increasing in regularity:

In what has become an increasingly common business arrangement, owners of nursing homes outsource a wide variety of goods and services to companies in which they have a financial interest or that they control. Nearly three-quarters of nursing homes in the United States — more than 11,000 — have such business dealings, known as related party transactions. Kaiser Health News

By transferring dollars between related companies, it is harder for regulatory agencies and plaintiff attorneys to follow the money. This means facilities can overpay related companies for services and goods, thereby diverting facility money into other, ‘separate’ corporations that are really owned by the same facility owners.

The Raid on James Square Nursing Home in Syracuse

In 2017, the Attorney General’s office and New York investigators raided James Square nursing home, seizing documents. At least 30 investigators stormed onto the facility property unannounced. The Attorney General’s office only released a brief comment, stating that the raid was based on an investigation related to patient care.

This may have arose out of a 2016 arrest of an James Square aide. Thirty Six year old Syracuse resident, Samantha Grover, was an aide at James Square. She was arrested for hitting an 87 year old resident in the face, as well as pushing him.

What Became of the James Square Nursing Home in Syracuse?

The facility was sold in 2018 for a whopping $45 million. The name of the facility was changed from James Square to Bishop Rehabilitation and Nursing Center. The three owners deny all the above allegations.

Speak with a Lawyer Familiar with Nursing Home Understaffing, Corporate Wrongdoing and Resident Neglect

Our law firm sues nursing homes in multiple states. This is our sole focus, and we like to think we are good at it. If you know or a overbilling or fraud scheme that has taken place in a nursing home, you may have a whistleblower case. If your loved one was the victim of an injury like a bed sore, fall, fracture or wrongful death inside a skilled nursing facility, call us. Our lawyers can help right the wrongs perpetrated by a neglectful facility.

Call us today for a free case evaluation, toll-free, at 1-844-253-8919.

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