Nursing Home Management Sued for Financial Fraud

Lawsuit alleges financial fraud caused resident neglect and harm.

By HFT Staff

Nassau County nursing home, Cold Spring Hills Center for Nursing and Rehabilitation (Cold Spring Hills), and its related businesses, owners and senior managers are being sued by New York Attorney General Letitia James for years of alleged financial fraud and self-dealing that caused severe understaffing and resident neglect and harm. 

An investigation by the Office of the Attorney General found that Cold Spring Hills’ owners allegedly diverted over $22.6 million in Medicaid and Medicare funds from resident care through a fraudulent network of companies to conceal up-front profit taking. 

From 2017 through 2021, Cold Spring Hills received over $157 million from New York’s Medicaid program and over $88 million from Medicare to provide critical care to its elderly and disabled residents. Cold Spring Hills’ operators used three primary fraudulent schemes to siphon over $22.6 million in Medicaid and Medicare funds from Cold Spring Hills, according to a press release.  

Residents were neglected and endangered by the result of the fraud. Family members of residents allegedly reported unclean facilities and broken critical care equipment, according to the lawsuit. Prior to the COVID-19 pandemic, the owners repeatedly cut staffing at the 588-bed facility, which created poor working conditions. 

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 Cold Spring Hills engaged in fraudulent financial schemes that violated numerous laws designed to protect nursing home residents, resulting in preventable neglect and harm of vulnerable New Yorkers. 

“Cold Spring Hills owners put profits over patient care and left vulnerable New Yorkers to live in heartbreaking and inhumane conditions,” says Attorney General James. “From Buffalo to Long Island, every nursing home in New York must abide by laws that require the best care for New Yorkers. As Attorney General, I am determined to use the full force of my office to hold nursing homes to that standard, and ensure New Yorkers are protected. I encourage anyone who has witnessed alarming conditions, resident neglect, or abuse at a nursing home to contact my office.” 

Through the lawsuit, James seeks to prevent new residents from entering the facility, install monitors to oversee the facility’s operations and finances and ban existing and hidden owners from their roles.  

December 21, 2022

Topic Area: Safety

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