N.Y. Attorney General Letitia James files lawsuit accusing upstate nursing home of misusing $18 million in state funds

ALBANY — The owners of an upstate nursing home jeopardized the safety of seniors while lining their own pockets with more than $18 million meant to improve care at the struggling facility, according to a lawsuit filed Tuesday by Attorney General Letitia James.

The suit alleges that the owners of The Villages of Orleans Health and Rehabilitation Center in Albion, Orleans County, crafted an elaborate scheme that included paying themselves rent and taking advantage of the state’s Medicaid program.

“Every individual deserves to live out their golden years in comfort and with dignity,” James said. “Yet the abject failure of The Villages and its owners to uphold their duty under the law caused residents to suffer inhumane treatment, neglect and harm.”

The facility’s owners put patients’ lives at risk by repeatedly submitting misleading information to the state Department of Health and funneling funds to separate companies the group ran but never disclosed, according to the suit.

Residents at the elder care site were forced to sit in their own urine and feces for hours, suffered malnourishment and dehydration and suffered infections from gaping bedsores and inadequate wound care, the lawsuit details.

One woman, admitted in early 2021, suffered increasingly severe bedsores and was given psychotropic medications for severe anxiety, though there was no such diagnosis in her medical records.

That woman’s friend told the attorney general’s office that she received more than 1,000 texts asking for help with basic necessities like using the restroom or getting food and water. One text reported she had been “lying in a dirty diaper for hours,” and another lamented, “I just need a glass of water.”

The woman was eventually found unresponsive and sent to a hospital, where she died.

James’ lawsuit seeks to compel the owners to return all funds fraudulently received, to appoint a receiver and financial monitor to stop the self-dealing and a health care monitor to improve care, and to require The Villages to stop admitting new patients until further notice.

Under state law, nursing home owners have a “special obligation” to provide a high level of care and quality of life for residents, and to ensure the facility is sufficiently staffed so as to provide that care.

The suit alleges the group behind the scam at The Villages flouted that law by slashing staffing and diverting millions in taxpayer dollars from Medicare and Medicaid to their own accounts.

“Instead of investing in staffing and resources, the owners allegedly disregarded laws designed to protect residents,” James said. “I will continue to monitor nursing homes and residential care facilities statewide to ensure the safety of our most vulnerable communities.”

The lawsuit stems from James’ probe into nursing homes in the wake of the worst of the COVID-19 pandemic. In January 2021, James’ office issued a bombshell report accusing the administration of former Gov. Andrew Cuomo of undercounting coronavirus nursing home deaths by as much as 50%.