One would think that Shlomo Rechnitz could afford to stock enough towels and wash cloths for the residents of his San Rafael nursing home.
Not only is Rechnitz a self-declared billionaire, but property records show that he appears to be siphoning money from the facility — and many others — by paying an inflated rent to a company that he also owns.
Yet, Rechnitz, whose firm Brius Healthcare is the largest nursing home operator in California, keeps cutting corners in San Rafael. Last year, he was cited for stocking his cupboards with expired food including “thickened apple juice.”
And, earlier this month, the federal Centers for Medicare & Medicaid Services cited the facility for failing “to provide enough supplies of clean towels and wash cloths.”
One staffer told an inspector that that sometimes “they use paper towels and tissues” to dry residents. Another staffer stated that when they run out of towels and wash cloths, “they have to use whatever they have … like bedsheets, gowns and pillowcases.”
While Rechnitz’s staffers were drying residents with paper towels and bedsheets, he appeared to be maximizing his profit through a rental arrangement he uses all over California.
Instead of renting the San Rafael facility directly from the property owner, Rechnitz in 2012 set up a separate company to rent it. Then he had that company sublease it to the nursing home for a much higher price.
Before Rechnitz bought the facility, the operator reported having paid the property owner an annual rent of $153,952.
But after Rechnitz bought it, he had his firm “Eretz San Rafael” initially pay the property owner an annual rent of $259,200. Then he turned around and had that company sublease the property to his nursing home for $388,800.
As you can see, Rechnitz signed for both companies.
What happened to the $129,600 in profit that Rechnitz’s firm “Eretz” pocketed in the exchange — and the money it keeps pocketing year-after-year?
We’d like to hear Rechnitz explain how it doesn’t end up in his pocket – and why he can’t find the money to pay for enough towels and wash cloths.