Nursing dwelling operators Daryl Hagler and Kenneth Rozenberg are going through extra stress from a New Jersey state company for misusing Medicaid funds
The New Jersey Workplace of the State Comptroller sued Hagler and Rozenberg together with their associates for “exploiting the operation” of two nursing houses, the Deptford Heart for Rehabilitation and Healthcare and Hammonton Heart, in accordance with NJ.com.
The watchdog company mentioned it discovered pervasive, systemic and longstanding violations of regulation and a “troubling sample” of profiteering by Hagler, Rozenberg and their associates.
The comptroller filed the lawsuit on Monday in Superior Court docket in Mercer County, in accordance with the report.
The lawsuit comes a month after the comptroller issued a report making a number of troubling allegations in regards to the nursing houses operators.
Within the report, the comptroller claimed that Rozenberg and Hagler used associated events to inflate hire funds from nursing houses to their property firms. The comptroller additionally claimed they diverted tens of tens of millions of {dollars} in Medicaid funding supposed for weak residents to themselves, in accordance with NJ.com.
To cover their alleged scheme, they reportedly hid these actions by way of falsified state and federal filings.
Hagler and Rozenberg are each well-known in NYC actual property circles. Hagler has been a backer of Brooklyn dealmaker Isaac Hager. He additionally has acquired an Astoria business property often called the Cigar Factory. Rozenberg’s son owns the Israeli nationwide airline El Al.
Each the lawsuit and comptroller’s report highlighted the poor situations on the New Jersey nursing houses regardless of the circulate of Medicaid funds. The Hammonton and Deptford police reportedly acquired greater than 3,400 emergency calls in regards to the amenities from 2019 to 2024.
Hagler and Rozenberg allegedly moved cash off the nursing dwelling books and into their financial institution accounts by way of a community of associated firms, together with Bronx-based Facilities for Care, per the comptroller’s report.
The company mentioned essentially the most profitable rip-off run by Hagler and Rozenberg was by way of mortgages and hire funds. This was allegedly executed by legally separating the nursing dwelling operations and the nursing dwelling properties (also called Opco vs. Propco).
Hagler and Rozenberg have been allegedly in a position to mix these two elements of the enterprise to acquire $63.2 million in mortgages, which was greater than the precise buy value, in accordance with the comptroller’s report.
“This scheme allowed Hagler and Rozenberg to buy and personal the nursing houses for practically nothing, a mere 1.5 p.c deposit,” the New Jersey Workplace of the State Comptroller mentioned in its report.
Rozenberg and Hagler didn’t instantly return a request for remark.
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