Attorney General James Sues Long Island Nursing Home for Repeated Financial Fraud and Resident Neglect

Owners of Fulton Commons Allegedly Took More Than $16 Million in Government Funds for Personal Enrichment, Causing Insufficient Staffing Levels and Widespread Neglect and Abuse

Lawsuit Is AG James’ Second Action Against a Nursing Home for Failure to Provide Appropriate Care to Residents Due to Repeated Fraud and Illegality

NEW YORK – New York Attorney General Letitia James today filed a lawsuit against Fulton Commons Care Center, Inc. (Fulton Commons), a nursing home in East Meadow, Nassau County, its owners, its related parties, their owners, and its former administrator (owners and operators) for engaging in a fraudulent scheme that led to insufficient staffing levels, significant resident neglect, mistreatment, and abuse. Following an extensive investigation conducted by the Office of the Attorney General (OAG), the suit alleges Fulton Commons’ owners repeatedly disregarded laws designed to protect nursing home residents and exploited New York’s Medicaid program to enrich themselves rather than use those funds for the intended purposes of providing care and staffing necessary to deliver it.

This is Attorney General James’ second legal proceeding against Fulton Commons. Last month, she announced the indictment of a former Licensed Practical Nurse (LPN) at the facility for sexually abusing a resident, and of a former Director of Nursing (DON) and the facility itself for failing to report the alleged abuse. The former LPN was reported to have sexually abused a resident at the facility in the fall of 2020, and the former DON was charged with multiple counts of falsifying business records for covering up and failing to report sexual abuse. Fulton Commons was also indicted based on actions made on the facility’s behalf. The charges filed in that proceeding are merely accusations, and the defendants are presumed innocent unless and until proven guilty in a court of law.

“Fulton Commons failed its residents and denied them the basic right of receiving comfortable, competent, and respectful care at the facility entrusted to serve them,” said Attorney General James. “Rather than honor their legal duty to ensure the highest possible quality of life for the residents in their care, the Fulton Commons owners allegedly maintained insufficient staffing so they could take more money for their own personal gain. These actions led to a devastating pattern of resident abuse, neglect, and mistreatment. My office continues to monitor nursing homes throughout New York to protect the safety of our vulnerable loved ones. Anyone who has witnessed degrading conditions, neglect, or abuse at a nursing home or residential care facility is strongly encouraged to report it.”

Under New York law, owners of nursing homes have a “special obligation” to ensure the highest possible quality of life for residents, and to staff the facility at a level sufficient to provide adequate care to all residents. The lawsuit alleges that the owners and operators of Fulton Commons disregarded numerous laws designed to protect nursing home residents, resulting in preventable neglect and harm of vulnerable New Yorkers. Further, the owners and operators maintained insufficient and inadequate staffing levels at the nursing home and engaged in several fraudulent schemes to divert more than $16 million from Fulton Commons in order to enrich themselves.

The companies named in the suit are The New Fulton Commons Company LLC (New Fulton), which provides administrative services to Fulton Commons; Fulton Commons Realty Co. LP (Fulton Realty A), which owns the real property on which Fulton Commons sits; Fulton Commons Realty Co. Inc. (Fulton Realty B), which is an owner of Fulton Realty A; and New Bridge View Company LLC (New Bridge View), which claims to provide bookkeeping services to Fulton Commons. Also named is the principal owner of Fulton Commons; the facility’s other owners, including the principal owner’s wife, his brother-in-law and sister-in-law, and his eight adult children; the principal owner’s nephew, who worked as the facility’s comptroller and was employed by New Bridge View; and the nursing home’s former administrator.

Financial Fraud

Between January 1, 2018, and December 31, 2021, Fulton Commons received $105.8 million in funding from Medicare and Medicaid for resident care. Of that amount, OAG’s investigation revealed that less than half — only $47.3 million — went to its intended purpose of direct resident care. The lawsuit alleges that $34.4 million was used to pay inflated “rent” to Fulton Realty A, an amount that far exceeded Fulton Realty A’s actual property expenses. In total, the owners of Fulton Commons paid themselves $14.9 million through this scheme of fraudulent rent payments while evading disclosure and approval by the Department of Health (DOH).

In addition, the principal owner had Fulton Commons pay fraudulent “salaries” to his eight adult children, who were each 1 percent owners of Fulton Commons, for no-show jobs at the nursing home. During the same time period from 2018 through 2021, Fulton Commons paid more than $1 million to the principal owner’s adult children, bringing the total amount of money wrongfully taken from the facility — from Medicaid and Medicare payments funded by hardworking, taxpaying New Yorkers — to more than $16 million.

In 2020, the principal owner’s adult children fraudulently received $410,875.96 in “salaries.” If the owners had instead used those funds to provide care to residents as intended, Fulton Commons could have provided nearly 10,000 additional hours of direct care. The owners’ persistent and systemic prioritization of their personal profit over the people in their care stripped residents of their dignity and caused physical and emotional harm, as alleged in detail in the lawsuit.

Resident Abuse and Neglect

The lawsuit filed today alleges a heinous record of resident abuse, neglect, and mistreatment. Fulton Commons failed to properly supervise and provide required care to residents, resulting in unanswered call bells and cries for help, unexplained bruising, lacerations, and other injuries, missed medical treatments and dosages of medication, soiled, unchanged briefs or humiliating missed trips to the bathroom, and sexual abuse. As there were not enough staff on duty to provide required care for all residents in the 280-bed facility, Fulton Commons illegally restrained residents, both physically by tying them to their wheelchair and chemically by drugging them with psychotropic medications. Residents and their families cited numerous other deficiencies in care, such as Fulton Commons’ failure to provide basic bodily and dental hygiene or nutritional management. Some families resorted to bribing staff to try to get care for their family members, and one woman reported that she hired a private aide to sit with her father in his room at Fulton Commons overnight.

Additional allegations of abuse, mistreatment, and neglect as detailed in the lawsuit include:

  • A woman was admitted to Fulton Commons for rehabilitation and care after having her foot amputated due to diabetes. When she rang her call bell it would often go unanswered, and as a result, she would miss doses of her medication or sit in her soiled briefs for prolonged periods of time. In January 2020, her remaining foot developed an infection which progressed until her entire foot turned black from necrosis. On the day she died in November 2020, her healthcare proxy arrived at Fulton Commons and attempted to see her but was told her condition was not severe enough to merit an in-person visit. She died less than two hours later.
  • After a woman suffering from dementia was admitted to Fulton Commons in 2018, her son observed the facility was insufficiently staffed, often with just one or two staff members on hand to supervise 30 residents at a time. In 2019, the resident’s son found his mother with a large bruise on her forehead that none of the staff could explain. In January 2020, he arrived for another visit and found his mother in the lunchroom, out of her wheelchair, and crawling around on the filthy floor while staff looked on and did not intervene. On another occasion, he witnessed his mother tied to her wheelchair with what appeared to be a piece of clothing. His mother died at Fulton Commons in April 2020.
  • A 53-year-old man was admitted to Fulton Commons in September 2021 after a series of strokes. He had difficulty walking, and so required assistance using the bathroom. Staff regularly failed to respond to his call bell, and eventually he defecated on himself. When staff finally came to his room, they berated him for soiling himself. The resident grew so afraid of the consequences of having another accident that he attempted to reach the bathroom without assistance after his call bell went unanswered. This resulted in a number of falls, including one where he remained on the floor for five hours until a staff member finally came to his room. As his condition worsened, his wife insisted he be transferred to a hospital, where he was diagnosed with a Urinary Tract Infection — a condition that should have been identified and treated at Fulton Commons.

COVID-19 Pandemic

The disturbing neglect and abuse residents suffered at Fulton Commons was only exacerbated by the COVID-19 pandemic, as the owners continued to run the facility without sufficient staff to provide an acceptable level of care. The lawsuit alleges the facility’s former administrator regularly prioritized the owners’ financial interests over the needs of residents, resulting in a toxic culture of deceit and coverup at Fulton Commons. During the first wave of the pandemic in early 2020, the administrator issued a false directive stating there was no COVID-19 in Fulton Commons and ordered staff not to discuss COVID-19 infections. The administrator also issued misleading robocalls to residents’ family members claiming the facility was free from COVID-19. This allowed Fulton Commons to avoid public scrutiny of its poor performance and high pandemic death count.

During the first wave of the COVID-19 pandemic, Fulton Commons knowingly underreported its COVID-19 deaths to DOH by as much as 45 percent. The facility’s submissions to DOH represent that only 40 residents died at Fulton Commons of either presumed or confirmed COVID-19. In reality, Fulton Commons’ own records indicate that 74 residents died from the virus. Even at the height of the pandemic, when one-third of the residents on a single unit died over a 72-hour period, only one was reported to DOH as a COVID-19 death — and that was only because the resident had tested positive at a hospital after their family demanded they be transferred.

In fact, Fulton Commons did not test any of its residents for COVID-19 until June 2020, when DOH sent representatives directly to the facility to conduct the tests. The former administrator, who has no background in medicine, pushed back on the required testing and stated that it was not helpful and would not have saved lives. When the administrator thought DOH would be conducting an in-person inspection of the facility, she ordered a mass room swap the evening before to hide the fact that Fulton Commons had not been implementing quarantine and infection control measures. As a result, Fulton Commons moved residents into rooms that had not been properly cleaned, exposing them to COVID-19 and other infections.

Remedies

The owners of Fulton Commons, their families, and their employees engaged in repeated and persistent fraud and illegality in operating Fulton Commons, including but not limited to violating several laws designed to protect nursing home residents and maintaining insufficient staffing in order to further enrich the owners and their families. In her lawsuit filed today, Attorney General James seeks to:

  • Order Fulton Commons to remove the facility’s current medical director and replace him with a qualified physician;
  • Prohibit Fulton Commons from admitting any new residents unless and until staffing levels meet appropriate standards;
  • Require Fulton Commons to engage and pay for a financial monitor to oversee the facility’s financial operations;
  • Require Fulton Commons to engage and pay for a healthcare monitor to oversee the facility’s healthcare operations and ensure residents’ outcomes improve;
  • Direct all respondents to fully disgorge any and all funds wrongfully received as part of the scheme; and
  • Direct all respondents, corporate and individual, with the exception of Fulton Commons, to reimburse the state for the cost of the investigation.

Respondents

The individual respondents named in the petition are Moshe Kalter, principal owner of Fulton Commons; Kalter’s wife Frady Kalter; Kalter’s brother-in-law Aaron Fogel, and his wife Esther Fogel; Kalter’s eight adult children, Mindy Steger, Sheindy Saffer, Chana Kanarek, Dovid Kalter, Yitzchok Kalter, Aryeh Kalter, Sheva Treff, and Chaya “Sara” Lieberman; Kalter’s nephew Steven Weiss, Fulton Commons’ Comptroller; and Cathie Doyle, Fulton Commons’ administrator until November 16, 2022.

Also named, as stated above, are the companies used to siphon funds from Fulton Commons: New Fulton, which provides administrative services to Fulton Commons; Fulton Realty A, which owns the real property on which Fulton Commons sits; Fulton Realty B, which is an owner of Fulton Realty A; and New Bridge View, which provides bookkeeping services to Fulton Commons and New Fulton. In addition to Fulton Commons, Kalter is the principal owner of New Fulton, Fulton Realty A, and New Bridge View, and is President of Fulton Realty B. Fogel is part-owner of Fulton Commons and Fulton Realty A.

Attorney General James has been investigating nursing homes throughout New York based on concerns of patient neglect and other conduct that may have jeopardized the health and safety of residents and employees, both before and during the COVID-19 pandemic. In January 2021, Attorney General James released a report revealing that many nursing homes were ill-equipped and ill-prepared to deal with the pandemic crisis because of poor staffing levels and a lack of compliance with infection control protocols. Last month, Attorney General James filed a lawsuit against The Villages of Orleans Health and Rehabilitation Center, a nursing home in Albion, New York, for years of financial fraud that resulted in significant resident neglect and harm. These lawsuits are a direct result of OAG’s nursing home investigations, some of which are still ongoing.

Attorney General James encourages anyone with information or concerns about alarming nursing home conditions, resident abuse, or neglect to file confidential complaints online or call the MFCU hotline at (833) 249-8499.

The investigation was conducted by a multi-disciplinary team from the Medicaid Fraud Control Unit, including Special Assistant Attorneys General Prabhjot Sekhon, Jill D. Brenner and Ferron A. Lien; Deputy Chief of Civil Enforcement Diana Elkind; Medical Analyst Mary Conway, RN; Detective Supervisor Ronald Lynch and Detectives John Tarpey, Thomas Fisch and Patrick Lubin, supervised by Deputy Chiefs William Falk and Kenneth Morgan; Auditor-Investigators Tashi Hamilton and Khristian Diaz, Sr. Auditor-Inv. Kristen Ronan, Principal Auditor-Inv. Mary Gail Kowtna, and Regional Chief Auditor Gretchen Hugh with Confidential Systems Analysts Doreen Lankowicz and Anil Varghese and Lead Data Scientist Si Lok Chao; Legal Support Analyst Allison Gionta; the investigative teams were supervised by Hauppauge Regional Director Veronica Bindrim-MacDevitt, Chief of Civil Enforcement Alee N. Scott and Chief of Criminal Investigations Thomas O’Hanlon. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. MFCU is a part of the Division for Criminal Justice, which is led by Chief Deputy Attorney General José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.

Attorney General James thanks the New York State Department of Health and Commissioner Mary T. Bassett, M.D.; and the United States Department of Health and Human Services, Office of the Inspector General, Assistant Special Agent-in-Charge Elysia Doherty.

MFCU’s total funding for federal fiscal year (FY) 2023 is $65,717,936. Of that total, 75 percent, or $49,288,452, is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent, totaling $16,429,484 for FY 2023, is funded by New York state. Through MFCU’s recoveries in law enforcement actions, it regularly returns more to the state than it receives in state funding.

A memorandum of law was filed in this matter.

To access the affidavits and exhibits:
Part 1
Part 2
Part 3
Part 4

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