Former Bronx County Nursing Home Owner Pleads Guilty To Defrauding Medicaid Of Millions Of Dollars
April 12, 2007 - Attorney General Andrew M. Cuomo announced the guilty plea of the former owner of two Bronx County nursing homes who defrauded the Medicaid program of millions of dollars by overcharging for services at two facilities over a six-year period.
Abe Zelmanowicz, 53, of Scarsdale, New York, the owner, and Eastchester Health Care Center, LLC and Split Rock Multi-Care Center, LLC, the entities which ran the nursing homes, appeared before Albany County Court Judge Thomas Breslin on April 11 and entered guilty pleas to Grand Larceny in the Second Degree (a class C felony). Zelmanowicz agreed to pay $6 million in restitution. Judge Breslin stated he intended to sentence Zelmanowicz to a term of two-to-six years in prison and required him to pay at least $2.5 million of the restitution by the date of sentencing, July 11.
From 1997 to 2003, Zelmanowicz, through his nursing homes, submitted bills to Medicaid fraudulently claiming that the facilities were entitled to payments for reserving or "holding" residents' rooms during periods when the residents were temporarily hospitalized, commonly referred to as "bed holds." Under New York State law, nursing homes are allowed to temporarily bill Medicaid for "bed holds" only when:
- The nursing home is at 95% occupancy.
- The resident lived in the nursing home for at least 30 days before his/her hospitalization.
Zelmanowicz admitted that his homes did not meet the requirements for "bed hold" reimbursement, but he still submitted billing for millions of dollars over the course of more than six years. He also admitted that he stole nearly $3 million on behalf of the nursing homes. Further, in order to settle all claims pending against him for his fraud, including those seeking additional monetary damages in a civil lawsuit filed by the Attorney General's office, Zelmanowicz agreed to pay a total of $6 million in restitution to New York State.
The plea satisfies a May 2006 Albany County grand jury indictment charging Zelmanowicz and his entities with one count of Grand Larceny in the First Degree and multiple counts of Offering a False Instrument for Filing in the First Degree for the "bed hold" fraud and for fraudulently submitting claims which falsely represented that Medicaid patients at his facilities were receiving ventilator treatment when in fact they were not.
Zelmanowicz and his partner, Rebecca Rich, of Purchase, sold the nursing homes in September 2002. The current owners of the nursing homes cooperated with the Attorney General's investigation and were not accused of any misconduct.
"Laws regarding Medicaid reimbursement are in place to prevent abuse of the program and to protect New York's taxpayers," said Attorney General Cuomo. "This individual broke the law by fraudulently billing Medicaid and my office's Medicaid Fraud Control Unit sought - and achieved - justice."
Special Assistant Attorneys General Gilbert Epstein and Thom O'Hanlon of the Attorney General's Medicaid Fraud Control Unit's Pearl River Regional Office prosecuted the case. Special Investigators Tim Connolly and Jeffrey Pitts, Supervising Auditor Investigator Jean Moss and Associate Auditor Investigator David Lee conducted the investigation. Special Assistant Attorney General James Cudden handled the civil litigation.