Owners, operators and landlords of Centers Health Care in New York are facing a lawsuit filed by the state Attorney General Letitia James on Wednesday, which alleges the four SNFs illegally misused more than $83 million in taxpayer money.

Diverted funds went toward, among other things, funding the purchase of Israeli airline El Al, according to articles published in One Mile at a Time and The Times of Israel. Kenneth Rozenberg, co-owner of Centers Health Care, allegedly used $103 million of Medicare and Medicaid funds to purchase the airline, initially in his son’s name.

The purchase allowed Rozenberg to effectively become a controlling shareholder of the airline, reports said. Daryl Hagler, co-owner of the properties with Rozenberg, was also named as an individual in the lawsuit, as well as several family members and business partners.

Collusive real estate arrangements, unnecessary and exorbitant loans with inflated interest rates, phony fees paid to companies they and their family members own, and paying themselves inflated salaries for work that was not performed were also listed as misuse of funds, the attorney general’s office alleged.

While these purchases were being made, significant resident neglect, harm and humiliation was befalling residents, the NY AG’s office said in a statement.

“Nursing homes are meant to be safe spaces where the most vulnerable members of our community receive the care and dignity they deserve,” James said in a statement. “Instead, the owners of Centers Health Care allegedly used these four nursing homes — and the vulnerable New Yorkers who lived there — to extract millions of dollars for their personal use, leading to elderly residents and those with disabilities suffering unconscionable pain, neglect, degradation, and even death.”

James went on to say Centers Leadership took every opportunity to put personal profit over resident care.

Jeff Jacomowitz, spokesperson for Centers Health Care, said the SNF operator denies the New York Attorney General’s allegations “wholeheartedly,” and had attempted to resolve the matter out of court.

“We will fight these spurious claims with the facts on our side. Beyond that, Centers Health Care will not comment on ongoing litigation,” Jacomowitz said in an emailed statement.

Facilities named in the lawsuit include: 448-bed Beth Abraham Center for Rehabilitation and Nursing in the Bronx, 200-bed Buffalo Center for Rehabilitation and Nursing in Erie County, 314-bed Holliswood Center for Rehabilitation and Healthcare in Queens County, and 200-bed Maritime Center for Rehabilitation and Nursing in Westchester County.

Centers Health Care owns and operates nearly 40 facilities across New York, New Jersey and other states.

Resident neglect, harm and humiliation began well before the pandemic, the attorney general’s office alleged, with Rozenberg and Hagler repeatedly operating the facilities with insufficient staffing in order to increase their own profits.

But, Covid exposed and exacerbated deficient resident care and poor working conditions, the attorney general’s office said, resulting in more than 400 residents dying across all four facilities in 2020. The Holliswood facility lost nearly a quarter of its population – 70 residents – two months into the pandemic.

Staff members were often unable to assist residents with basic activities of daily living, call bells were routinely ignored or unanswered, leaving residents in unsanitary conditions.

James seeks a preliminary injunction, requiring the nursing homes to pay for a financial monitor and health care monitor to oversee operations, along with a permanent court order to prohibit the nursing homes from admitting any more patients until staffing standards and sufficient care are met.

The court order would also require owners, operators and landlords return more than $83 million in wrongfully received government funding, and pay statutory costs and reimburse the state for the cost of the investigation.

This is the fourth lawsuit James has filed against nursing home owners and operators in the state. The office secured more than $7.1 million from Saratoga Center for Rehabilitation and Skilled Nursing Care in February; a lawsuit against Cold Spring Hills Center for Nursing and Rehabilitation and Fulton Commons Care Center was filed in December 2022; and the Villages of Orleans Health and Rehabilitation Center was sued for financial fraud resulting in resident neglect and harm in November 2022.