Attorney General James Secures $8.6 Million and Significant Reforms to Long Island Nursing Home after Repeated Financial Fraud and Resident Mistreatment

NEW YORK – New York Attorney General Letitia James today announced that her office has secured a major settlement with Fulton Commons Care Center, Inc. (Fulton Commons), a nursing home in East Meadow, Nassau County that will require its owners and operator to pay up to $8.6 million and install monitors to reform the nursing home’s healthcare and financial operations after years of financial fraud and resident mistreatment. The Office of the Attorney General (OAG) launched an investigation into Fulton Commons in 2018 that exposed longstanding resident neglect, abuse, mistreatment, and financial fraud. Fulton Commons will now be controlled in part by an independent healthcare monitor, who will mandate reforms to improve resident care, such as hiring more staff. The OAG is also installing an independent financial monitor to audit Fulton Commons’ spending and prevent the fraudulent financial transactions its owners engaged in. The owners and operator of Fulton Commons will pay up to $7 million into a fund to implement the required reforms to ensure the safety of its residents, and pay an additional $1.6 million in restitution to Medicaid and Medicare for the funds they illegally diverted.

Attorney General James also secured the guilty plea and sentencing of the Fulton Commons corporation for criminal acts relating to covering up reports of sexual assaults against residents in 2020 and 2022. Fulton Commons was sentenced to a fine of $5,000 and ordered to fully comply with conditions imposed by OAG.

“For years, residents at Fulton Commons endured despicable mistreatment that left them with traumatic injuries and humiliating living conditions while the owners and operator of the facility pocketed millions of dollars of taxpayer funds instead of investing in critical care,” said Attorney General James. “The most vulnerable New Yorkers and their families trusted Fulton Commons to care for them, but instead of dignified treatment, they were neglected and abused. Today, we are ensuring that the owners and operator of Fulton Commons are held responsible for their negligence, and that the facility makes all the necessary changes to guarantee its residents get the care they deserve. My office will always fight for the dignity and rights of vulnerable New Yorkers, and we will continue to hold nursing homes accountable for neglecting those they are supposed to care for.” 

In December 2022, Attorney General James sued Fulton Commons and its owners, operator, former controller, former administrator, and various related corporate entities for financial fraud and resident neglect and mistreatment that violated New York and federal laws. The lawsuit detailed a number of horrific resident experiences and the financial schemes Fulton Commons’ owners used to illegally profit. 

Resident Abuse and Neglect

As a result of its owners’ profiteering, residents suffered and lived in despicable conditions. Insufficient staffing meant vulnerable residents were neglected and often had no assistance with basic daily tasks. Vulnerable residents suffered sexual abuse and unexplained bruising, lacerations, and other injuries, missed medical treatments and dosages of medication, were left to sit in soiled, unchanged briefs for hours, and were denied assistance with visiting the bathroom. 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. Under Fulton Commons’ former administrator, Cathie Doyle, the facility implemented a dangerous and unlawful policy that failed to report allegations of sexual abuse to law enforcement, thus putting all of the facility’s residents at risk.

Residents suffered humiliating and dangerous conditions:

• 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 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.

Financial Fraud

Between January 2018 and January 2022, the owners of Fulton Commons orchestrated two different financial schemes to steer funding intended for patient care to themselves. In one scheme, the current owners paid themselves $14.9 million in fraudulent inflated rental payments using Medicare and Medicaid funds. In another scheme, the principal owner and operator of Fulton Commons, Moshe Kalter, paid fraudulent salaries to his eight adult children, who were each one percent owners of Fulton Commons, for no-show jobs at the nursing home. In total, more than $16 million in taxpayer funds went into Fulton Commons’ owners’ pockets instead of being used to care for its residents.

Required Reforms and Penalties

Fulton Commons and its owners and operator will be mandated to undergo reforms to ensure the facility complies with all New York laws and improves patient care. Fulton Commons can be excluded from the Medicaid program if they violate the terms imposed by OAG, and the terms will still apply even if Fulton Commons is sold to new owners.

Independent Healthcare Monitor

Fulton Commons’ owners must pay for and appoint an Independent Healthcare Monitor (IHM) to oversee all healthcare operations at the facility and ensure the nursing home improves resident care. The IHM will ensure Fulton Commons consistently operates with sufficient staff levels to provide all required care to the nursing home’s existing and future residents and will maintain or increase staff pay to ensure the facility’s staff-to-resident ratios are adequate. The IHM must also be consulted before Fulton Commons hires any administrator or medical director. The IHM’s recommendations will be binding. Fulton Commons will be penalized $5,000 per day if it fails to implement a recommendation from the IHM in a timely manner.

Independent Financial Monitor

Fulton Commons’ owners must also pay for and appoint an Independent Financial Monitor (IFM) to oversee Fulton Commons’ finances. The IFM will have the power to approve or reject all transactions related to the implementation of the IHM’s recommendations or any other part of the settlement terms. The IFM will also have the authority to reject the kinds of fraudulent financial transactions the owners of Fulton Commons engaged in, including payments to related parties, as well as payments to management or consulting companies. This oversight will help ensure Fulton Commons appropriately spends the Medicaid and Medicare funds it receives, maintains sufficient resources to fund the necessary reforms, and fully complies with the terms of the agreement with the Office of the Attorney General. Under this agreement, Fulton Commons’ ownership is barred from taking any withdrawals or distributions until such payments are approved by the IFM at the end of the calendar year.

The payments for the IHM and IFM cannot come from the nursing home’s operating account or the fund established for resident care.

Chief Compliance Officer

Fulton Commons will appoint a Chief Compliance Officer responsible for ensuring the IHM’s recommendations are fully implemented, and that Fulton Commons complies with all applicable federal and state laws.

Financial Penalties

The respondents will be responsible for up to $8.6 million in financial penalties, including:

• $1.5 million in restitution of Medicaid and Medicare funds
• A minimum of $6 million, and as much as $7 million, to establish a Resident Care Fund to cover the costs of all improvements recommended by the IHM
• $100,000 to OAG to reimburse the costs of the investigation

Criminal Investigation

In November 2022, Attorney General James announced the indictment of Fulton Commons and two former staff members in connection with allegations that a licensed practical nurse (LPN) sexually assaulted several female residents at Fulton Commons. A Nassau County Grand Jury indicted the nurse for crimes related to his sexual assault of an 82-year-old resident at the facility in the fall of 2020. While the prosecution was pending, the nurse died of natural causes. The Grand Jury also indicted Fulton Commons’ former Director of Nursing with multiple counts related to her efforts to cover up the allegations of sexual assault and failing to report them to law enforcement and the New York State Department of Health, as she was required to do under New York state and federal law. In March 2023, the Director of Nursing pleaded guilty to Endangering the Welfare of an Incompetent or Physically Disabled Person in the First Degree and Willful Violation of Public Health Laws and has been cooperating with the OAG investigation. 

On February 28, 2024, in Nassau County Court, Fulton Commons entered guilty pleas to two counts of Attempted Falsifying Business Records in the First Degree, class A Misdemeanors, in satisfaction of the 2022 indictment. The corporation admitted that, in October and November 2020, Fulton Commons attempted to falsify business records relating to a report that a Fulton Commons employee had sexually abused a resident, and further admitted that, on January 6, 2022, Fulton Commons attempted to falsify business records to the Department of Health by providing false information to a Department of Health inspector during an investigation of allegations of sexual abuse of two other residents. The Court sentenced Fulton Commons to a fine of $5,000 and a conditional discharge requiring full compliance with the civil settlement. 

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, during, and after 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.

In June 2023, Attorney General James sued the owners and operators of four nursing homes owned and operated by Centers for Care LLC for financial fraud and resident neglect. In April 2023, Attorney General James co-led a coalition of attorneys general in calling for increased transparency of nursing home ownership. In February 2023, Attorney General James and United States Attorney for the Northern District of New York Carla Freedman secured more than $7.1 million from the Saratoga Center for Rehabilitation and Skilled Nursing Care, a former nursing home in Ballston Spa, and its owners, unlicensed operator, and landlord for years of fraud and resident neglect. In December 2022, Attorney General James sued Cold Spring Hills Center for Nursing and Rehabilitation for diverting millions in government funding from resident care, causing widespread resident neglect and abuse. In November 2022, 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.

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

The proceedings were handled by the Attorney General’s Medicaid Fraud Control Unit (MFCU). The investigations were conducted by Detective Supervisor Dominick DiGennaro, Detectives John Tarpey, Anthony Caban, Thomas Fisch, Patrick Lubin, Stanislav Tabakov, and Medical Analysts Stephanie Keyser, R.N. and Mary Conway, R.N., assisted by Detective Allison Smith and Senior Detective Larry Williams. The detective teams were supervised by Deputy Chief William Falk, MFCU Commanding Officer and Deputy Chief Ronald Lynch, MFCU Executive Officer. Financial and data analysis was conducted by Sr. Auditor-Invs. Kristen Ronan and Khristian Diaz, Auditor-Investigator Tashi Hamilton, Principal Auditor-Invs. Mary Gail Kowtna, and Olga Sunitsky. Regional Chief Auditor Gretchen Hugh with Confidential Systems Analysts Doreen Lankowicz and Anil Varghese, Lead Data Scientist Si Lok Chao, Legal Support Analyst Anne Liptak, and Supervising Legal Assistant Alexandra Schmit. 

The state was represented in the civil proceedings by Special Assistant Attorneys General Prabhjot Sekhon-Treanor, Jill D. Brenner, and Ferron A. Lien, and Deputy Chief of Civil Enforcement Diana Elkind, all supervised by Hauppauge Regional Director Veronica Bindrim-MacDevitt and Chief of Civil Enforcement Alee N. Scott.

The criminal matter was prosecuted by Special Assistant Attorneys General Brandon L. Phillips, Michael Orvets, and Regional Deputy David Arias, under the supervision of New York City Regional Director Twan Bounds and MFCU Chief of Criminal Investigations Thomas O’Hanlon, with valuable support from Crime Victims Assistance Coordinator Priscilla Tavares. 

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 Dr. James V. McDonald, M.D., M.P.H.; the New York State Office of the Medicaid Inspector General, Frank T. Walsh, Acting Inspector General; the United States Department of Health and Human Services, Office of the Inspector General, Naomi Gruchacz, Special Agent in Charge, New York Region; the New Jersey Attorney General’s Office’s Medicaid Fraud Control Unit, the Nassau County Police Department, and the Office of the United States Attorney for the Eastern District of New York.

New York MFCU’s total funding for federal fiscal year (FY) 2024 is $68,997,928. Of that total, 75 percent, or $51,748,448, is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent, totaling $17,249,480 for FY 2024, is funded by New York state.