Owners used fraudulent funds to buy Israel's national airline - New York A-G

New York State Attorney General Letitia James accused Jewish owners of four nursing homes in New York of misusing $83 million in government funds and diverting them towards the purchase of Israel’s national airline, El Al. 

In a lawsuit filed this week, James alleges that instead of employing the funds to care for residents and hire adequate staff, Kenneth Rozenberg and Daryl Hagler, the owners of Centers Health Care, have been using the money for their own personal benefit. In 2020, Rozenberg purchased a controlling stake in the Israeli airline El Al for $107 million. Hagler became a director of El Al in 2021, and per the suit spent $132 million in 2022 to purchase three properties in Brooklyn and Queens.

“Rozenberg’s investment in El Al, which ultimately allowed him to become the controlling shareholder of the airline, was made possible by his and Hagler’s longstanding pattern of fraud and illegality,” the suit says.

Failing to properly care for residents

James is seeking to block Centers Health Care from admitting new residents until they are properly staffed to care for current residents as well as hire financial and healthcare monitors to ensure compliance. Rozenberg and Hagler are also being asked to return the allegedly stolen funds.

The facilities in question are Beth Abraham Center for Rehabilitation and Nursing in the Bronx, Buffalo Center for Rehabilitation and Nursing in Buffalo, Holliswood Center for Rehabilitation and Healthcare in Queens and Martine Center for Rehabilitation and Nursing in White Plains. 

Centers Health Care denied the allegations. “Centers Health Care prides itself on its commitment to patient care,” Jeff Jacomowitz, a spokesman for Centers Health Care, said in a statement. “Centers denies the New York attorney general’s allegations wholeheartedly and attempted to resolve this matter out of court. We will fight these spurious claims with the facts on our side.” 

Per the suit, Centers Health Care has been engaging in fraud since as early as 2013. The suit alleges that the nursing homes often left residents sitting in their own feces and urine for hours, failed to respond to calls for help when residents fell and kept residents malnourished and starving.

“Nursing homes are meant to be safe spaces where the most vulnerable members of our community receive the care and dignity they deserve. 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 said in a press release.

“Rather than honor their legal duty to residents to provide the highest possible quality of life, Centers leadership and their associates seized every opportunity to put personal profit over resident care,” she added.

Four hundred residents at Centers Health Care facilities died in the first year of the COVID-19 pandemic. The suit alleges that they died as a result of the nursing home’s failure to provide adequate staff and follow COVID safety protocols.

In the first year of the pandemic, more than 15,000  nursing home residents statewide died due to the coronavirus and its complications, according to a state audit.

Rozenberg was reported to have used his son, Eli Rozenberg, an Israeli citizen, as the frontman for his bid to purchase El Al, due to a law preventing non-Israelis from owning the airline. 

The suit alleges that in 2020, “Hagler used a bank account that received, among other sums, profits obtained fraudulently and illegally from the Nursing Homes to loan Rozenberg $103 million — at no interest and with no repayment terms or loan documentation — to facilitate Rozenberg’s purchase of the Israeli national airline, El Al. In the fall of 2020, Rozenberg lent $109 million to a company controlled by his son to purchase a controlling stake in the airline for a total of $107 million.” 

The senior Rozenberg made Aliyah in 2021 and took control of the company in May 2021.

This is the fourth lawsuit James has filed against nursing home owners this year. In a press conference, she encouraged anyone with concerns or information about nursing home conditions to file a confidential complaint.