AG seeks preliminary injunction for monitors to help run The Village of Orleans, claiming substandard care persists

Reps for owners of nursing home in Albion tell judge facility is well-run, no longer on ‘focus list’

File photo by Tom Rivers: The owners of The Villages of Orleans Health and Rehabilitation Center in Albion are accused by the state’s attorney general of inhumane conditions for some residents at the 120-bed facility on Route 31. In 2020 in the first year of the pandemic, 30 of the residents at The Villages died from Covid.

ALBION – The State Attorney General is seeking a preliminary injunction from a State Supreme Court judge to allow healthcare and financial monitors at The Village of Orleans Health and Rehabilitation Center, a 120-bed nursing home in Albion.

Maura O’Donnell and Jared Goldman, assistant attorneys general, presented their arguments in court today in Albion before Judge Frank Caruso. They told the judge that nursing home residents continue to receive substandard care that jeopardizes their health.

“These are human beings,” O’Donnell told Judge Caruso. “They deserve safe and dignified care.”

She said recent testimonials from residents and their families, as well as an investigator’s report, indicate some of the residents still are not receiving basic care, or proper dietary needs, medical care and bedsore treatment. Families often aren’t communicated with in a timely manner, O’Donnell said.

It was nearly a year ago on Nov. 29, 2022 when Attorney General Letitia James announced she was suing the owners of the Villages of Orleans for financial fraud that led to significant resident neglect and harm.

It was the first of several lawsuits from the AG against nursing home operators, alleging a scheme where owners created real estate companies to siphon off the profits from the nursing homes at the expense of resident care.

While the case against The Villages moves through the court, the AG’s Office is asking for health and financial monitors to make sure staffing levels and care are up to standard, and funds aren’t diverted improperly.

Glenn Jones, an attorney for Comprehensive Healthcare Management Services, said there is no need for monitors. He said the only money going to the real estate owner of the property, Telegraph Realty, is being used to pay the mortgage. To default on those payments could put the facility in foreclosure and out of business, he said.

Jones, a partner at the Harris Beach law firm, said recent surveys from residents and staff show the facility has made improvements since the Covid pandemic. He noted The Villages also is no longer on a list of Special Focus Facilities from the Centers for Medicare & Medicaid Services (CMS). Facilities on that list have a record of poor survey results and inspections.

“We oppose this application because the conditions have improved since the start of litigation,” Jones said in court today. “The surveys are better. We have graduated from the Special Focus and are well within the averages of nursing homes in New York State.”

Many of the recent complaints detailed in an investigator’s report filed last week are based on double and triple hearsay, from anonymous sources and with claims that are incorrect, Jones said.

Dennis Vacco, another lawyer for Comprehensive (and a former state attorney general), faulted the AG’s request for a preliminary injunction, saying there is no new current evidence of neglect. The new request in court “didn’t have a factual underpinning,” Vacco said.

Letitia James, in her lawsuit filed nearly a year ago, claimed the nursing home owners fraudulently diverted $18 million in Medicaid and Medicare payments, money that went in the owners’ pockets instead of towards resident care.

But Jones disputed that saying the payments were reimbursements for care given – thousands of claims since 2014. He said owners forming a real estate entity that owns the nursing home property is not out of the norm.

O’Donnell from the AG’s Office said there isn’t a clear owner in charge at The Villages. The monitors are needed to insure resident care is a priority and there isn’t fraud financially.

Jared Goldman, another assistant attorney general, said the owners have deceived the Department of Health with official filings. The DOH inspections and regulatory authority aren’t enough to ensure compliance at The Villages, he said.

“There has been persistent and repeated illegality,” he told the judge. “This is a 1-star facility which is the worst rating available. This is still a 1-star facility.”

Judge Caruso didn’t make a ruling in court today. He said he would review the submissions and decide soon about the preliminary injunction and whether there will be monitors. He presided over a 2 ½ hour hearing today in the main courtroom at the Orleans County Courthouse.

The named respondents in the initial AG lawsuit from Nov. 29, 2022 are Bernard Fuchs, supposed sole official owner of The Villages; his son and daughter-in-law Gerald and Tova Fuchs, and his sons-in-law Joel Edelstein and Israel Freund; David Gast; Sam Halper; Ephram Lahasky; Benjamin Landa and his son-in-law Joshua Farkovits; and Teresa Lichtschein and her daughter-in-law Debbie Korngut.

The lawsuit also named Telegraph Realty LLC, which owns the real property where The Villages sits on Route 31; CHMS Group LLC, which provides administrative services to The Villages; and ML Kids Holdings LLC, which received over $1.5 million in cash transfers from Telegraph and is controlled by Ephram Lahasky, according to the AG suit.

There were about 10 attorneys in court today for the different owners and several asked that their clients be removed from the lawsuit because they have a very small minority stake in the ownership, or are part of the real estate company and have no decision-making role with the operation of the nursing home.

Alyssa Friedman, an attorney for Landa, said Letitia James is an “activist attorney general” and is the only AG in the country suing nursing homes.

James in her lawsuit claimed $18 million in fraud, which Friedman said is a “hyper-inflated” number.

Friedman urged the judge to keep the status quo at The Villages and not require monitors. She said a prospective owner is looking to buy the facility once there is resolution with the AG lawsuit.

“It is operating well and seemingly smooth,” she said in court. “There is no burning need to take any immediate action.”

John Martin, an attorney representing two of the named owners, said nursing homes are heavily regulated in New York. The AG’s request for monitors oversteps the role of the Department of Health which could pull a nursing home operator’s license if it felt there was danger to residents, Martin said.

He called the AG’s request for a preliminary injunction for monitors “inappropriate and unprecedented.”

Herb Greenman, an attorney for Telegraph Realty, said the real estate entity shouldn’t be in the lawsuit. He said the timing of the AG’s request for an injunction, 11 months after the initial filing, is puzzling because the facility is improved.

“We believe we are moving forward and not backward,” he told the judge. “The bottom line is we’re doing the best that we can. The facility is well-run. The residents are safe and being cared for.”