AG Sues Another LI Nursing Home, Alleging Widespread Fraud, Neglect

WOODBURY, NY — The New York attorney general's office filed another lawsuit against a Nassau County nursing home this week, alleging widespread fraud and resident neglect at the facility.

Attorney General Letitia James filed the lawsuit against Cold Spring Hills Center for Nursing and Rehabilitation, located at 378 Syosset-Woodbury Road in Woodbury. James said that the facility and its owners diverted millions in Medicare and Medicaid funds from resident care to themselves, leading to low staffing and conditions that endangered residents.

The lawsuit seeks to stop new residents from moving into the facility, install monitors to oversee the facility’s operations and finances, and ban existing and hidden owners from their roles.

“Cold Spring Hills’ owners put profits over patient care and left vulnerable New Yorkers to live in heartbreaking and inhumane conditions,” said 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.”

It is the second lawsuit James' office has filed this week against a Nassau County nursing home alleging fraud and neglect. On Dec. 13, James' office sued Fulton Commons Care Center in East Meadow for similar charges.

Calls to Cold Spring Hills went unanswered.

According to James, the owners of Cold Spring Hills used 13 companies to make it seem like they were paying for services for the nursing home, but were actually diverting Medicare and Medicaid funds to themselves. This network of companies was also used to hide the real owners of the nursing home and to orchestrate multiple schemes to enrich themselves, James said.

From 2017 through 2021, Cold Spring Hills received more than $157 million from New York’s Medicaid program and over $88 million from Medicare to provide care to its elderly and disabled residents. James said that Cold Spring Hills’ operators siphoned over $22.6 million in funds from the facility.

According to James, the owners paid more than $15.3 million in fraudulent “rent” to Cold Spring Realty, which is owned by the same people who operate the nursing home, and paid more than $5.2 million to several businesses for “consulting.” In addition, James said that the owners engaged in a $2 million fraudulent promissory note scheme when they purchased the facility. They also funneled another $10.6 million in concealed self-dealing transactions through what were ostensibly insurance companies, and another $8.1 million through an entity that purportedly provided services and supplies to Cold Spring Hills, James said. In total, the owners transferred over $42.4 million to themselves and related parties from 2016 to 2021.

In addition to the fraud, James said that testimony from numerous staff and family members of residents describe bleak conditions at the facility. Family members of residents often observed that the facility was unclean and that critical care equipment — such as wheelchairs, beds, shower chairs and air conditioners — were broken. Residents were routinely left sitting in soiled briefs and were not bathed for long periods of time, James said. Cold Spring Hills repeatedly failed to provide proper wound care and prevention for residents, causing wounds to develop and existing wounds to deteriorate, leading to infections, according to James.

In one instance, a man was admitted to Cold Spring Hills to regain mobility after a car crash left him badly injured. During his time at the facility, James said he received such poor care that he lost at least 30 pounds and his injury worsened. He had a preexisting pressure sore, and Cold Spring Hills’ medical records reflect that his pressure injury increased in size and advanced from a stage 3 to the most severe stage 4 while he was at the facility, James said.

In August 2021, he was admitted to the hospital for severe malnutrition, dehydration, a stage 4 sacral pressure injury, and an infection in the bone of his right foot. James said he told his wife, “They tried to kill me at Cold Spring Hills.”

James said the abuse and neglect continued through the COVID-19 pandemic. In February 2020, James said the principal owner, Bent Philipson, planned to cut $1.6 million in expenses by reducing staff. He made these budget cuts despite the Department of Health notifying Cold Spring Hills on Feb. 6, 2020 that all nursing homes must prepare for the coming pandemic, James said.

The facility was dangerously understaffed before the pandemic and during the height of the pandemic, according to James. Cold Spring Hills’ staff confirmed that insufficient staffing was a problem at the facility before the pandemic, and that it continued into 2022.

From March 1, 2020 to June 4, 2020, 166 residents of Cold Spring Hills died, 98 from COVID and 68 from other causes. Cold Spring Hills fraudulently failed to report 51 of COVID deaths to the DOH, James said, underreporting by 52 percent.

Philipson also runs Philosophy Care, a consulting firm for other nursing facilities throughout New York and New Jersey.

Also named in the lawsuit, in addition to Philipson and a bevy of companies, are Benjamin Landa, whose James said concealed his ownership; Joel Leifer; David Zahler, his wife Chaya Zahler, their adult children Rochel David, Leah Friedman, Chaim Zahler, and Jacob Zahler, Avi Philipson (Bent Philipson’s adult son), Esther Farkovits (Benjamin Landa’s adult daughter); Rochel David and Leah Friedman (the Zahlers’ daughters) were straw owners of the nursing home, put in place to conceal their fathers’ control. Also named in the suit is Cheskel Berkowitz, Joel Zupnick, and the estate of Deborah Philipson.

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