Tag Archives: Shlomo Rechnitz

Shlomo Rechnitz

Brius owner duped again?

For the second time in 15 months, Brius owner Shlomo Rechnitz is reported to have been the victim of an investment scam.

In December, 2016, the Wall Street Journal reported that Rechnitz appeared to be on the losing end of what federal investigators say is one of the biggest investment frauds since Bernard Madoff’s ponzi scheme.

Now Rechnitz is suing Mobil Media, a firm he claims tricked him into investing $4.75 million by overstating an investment made by Leonardo DiCaprio, according to the Hollywood Reporter.

“Defendants’ scheme created the false appearance that Mobil was a well-capitalized business with investor support from renown investors and celebrities,” his attorney Patricia Glaser wrote in a complaint posted by the paper.

Rechnitz’s legal team cited o a 2011 news release claiming that the actor was part of a group that invested $3 million in the company, but Bloomberg later reported that DiCaprio invested less than $10 for almost a million shares.

Among other claims, Rechnitz is suing for negligent misrepresentation and unjust enrichment – two subjects with which he is well acquainted.

Last year his insurance company sued him, charging that Rechnitz and Brius officials had misrepresented its own track record. In his insurance application for one of his nursing homes, Rechnitz failed to disclose that an investigation launched by State Attorney General Kamala Harris found that the home had provided “grossly negligent” care to James Populus, which contributed to his death.

The National Union of Healthcare Workers filed a complaint last year after finding that Brius also failed to disclose “adverse actions” on its applications to take over at 22 nursing homes dating back to 2014.

Moreover, In a separate lawsuit called “Foreman vs. Rechnitz,” current and former residents at 55 Brius homes are suing Rechnitz accusing his nursing home company of deceiving them about its patient-care track-record when they sought care at the Brius facilities.

The case, “Foreman vs. Rechnitz” alleges that during residents’ admissions process, Brius and Rechnitz concealed the fact that Brius “has a long history of being serial violators of skilled nursing industry laws.” It also alleges that Rechnitz “actively and intentionally concealed from [residents]… the material facts relating to the chronic understaffing” and that “this concealment… was intended to deceive… [residents] into believing that [Brius] facilities were properly staffed to induce… class members into becoming residents of [Brius] facilities.”

News of the Rechnitz’s lawsuit against Mobil came just days after caregivers and nursing home residents testified that Brius homes in Marin County are chronically understaffed and under-resourced.

Given that Rechnitz, who is worth about $2.5 billion according to the Hollywood Reporter article, was willing to invest millions in a media company because it claimed to have the backing of a Hollywood star, one must ask: What will it take Rechnitz to invest in his own nursing homes?

Brius accused of understaffing nursing homes at public hearing

California’s largest nursing home company could be facing a campaign to wrest control of its two Marin County homes after workers, residents and the families of residents testified that both homes are chronically understaffed and under-resourced.

“Given what we’ve heard, we feel they’re bad actors,” said Matt Myres, who chaired a Workers’ Rights Board hearing March 4 to look into the homes operated by Brius Healthcare.

The six-member board, convened by North Bay Jobs with Justice, issued several preliminary recommendations, including:

  • Increasing staffing
  • Raising caregiver wages to at least $15 an hour
  • Ensuring that caregivers have reliable schedules to reduce worker turnover

Final recommendations, expected to be released within a few weeks, will also consider how to go about bringing in a new operator for the nursing homes.

“We know that the community here needs the facilities for folks to receive good quality patient care,” Myres said. “But we also would like to see Brius’ license rescinded.”

WRB 2/4/18
Stanton Richardson talks about finding his father dangling from his bed at the understaffed Novato Healthcare Center.

Brius, which controls 1 in 14 nursing home beds across California, and 1 in 5 beds in Marin County, already finds itself squarely in the crosshairs of state officials.

The California State Auditor is reviewing the company’s dealings with dozens of other companies controlled by its owner, Shlomo Rechnitz. The California Department of Public Health has blocked Brius from taking over six nursing homes since 2014, citing its dismal patient care record. And former Attorney General Kamala Harris moved to block the company from taking over 19 additional homes, writing that Rechnitz was “a serial violator” of nursing home rules.

The situation is already dire in Marin County where Brius controls Novato Healthcare Center and San Rafael Healthcare and Wellness Center, whose employees are represented by the National Union of Healthcare Workers.

Both homes have been cited by state regulators for understaffing over the past year. During the hearing, residents and their loved ones said that both homes often rely on temporary caregivers who don’t have the same dedication as full-time staff.WRB 2/4/18


Ian Minto, the resident council president at the 181-bed Novato home, said he recently fell in the bathroom and needed more than an hour to pull himself up after no one responded to his cries for help.

When he later explained what had happened to a temporary nurse on duty, “She never looked up from her phone,” he said.

The actual employees do care about the patients,” Minto added. “They have a sense of humor. You can tell they are trying to do their best even though they are overworked and understaffed.”

He added, “I think things in Novato are only going to get better if management comes in touch with what employees need, which are better pay and benefits.”

Stanton Richardson testified that when he came to visit his father one afternoon, he found him tangled in his bed unable to help himself, while temporary staffers had neglected to check on him.

Richardson said the Novato facility, where annual staff turnover has topped 30 percent in recent years, was desperately in need of more caregivers earning enough money to keep them in their jobs.

“You may have two staff members caring for 15 to 20 people and they are overwhelmed,” he said. “I see it in their faces. They are very tired.”

Maria Martinez, a former nursing assistant at Brius’ home in San Rafael, said understaffing prevented her and other caregivers from giving patients the help they needed.

“A lot of times I had patients who were depressed and they were asking for their family, but I couldn’t sit down or hold their hands and talk to them because there was no time,” she said.

Martinez added that with 15 residents to care for, things inevitably fell through the cracks. “A lot of times we didn’t have time to brush their teeth … or wash their faces,” she said.

WRB 2/4/18

Bernice Dominguez, a housekeeper in Novato, testified that she sometimes was asked to check on patients even though she wasn’t credentialed to do that work. “It’s really very hard to listen to the cries of patients who need help,” said Dominguez, who makes $11.58 an hour after working at the facility for 15 years.

Rather than taking steps to keep long-term workers, Brius appears to be trying to oust them. The company recently changed workers’ schedules, preventing them from having the same days off every week. The constantly changing “floating” schedule makes it hard for people who have second jobs and families, said Benjamin Maldanado, a housekeeper in San Rafael.

“They not only broke their word to us,” Maldando said of Brius, “they are making us break our commitments to our families.”

The workers were supported by State Sen Mike McGuire, a Democrat from Healdsburg, who issued a statement saying that “Brius uses its patients as pawns” and that “quality is not part of its business model.”

Brius failed to present testimony at the hearing despite the panel’s invitation.

In speaking for the board, Myres said it was clear Brius needed to restore consistent schedules for its caregivers and boost their wages.

“Raising wages serves the interest of both care facilities since it would reduce employee turnover, prevent understaffing, save money by not having to retrain as many employees, and save on recruitment of new employees,” Myres said. “Most importantly it would improve patient care.”


Trump Administration moves to limit nursing home fines

Brius owner Shlomo Rechnitz made headlines in October for implying that Donald Trump’s election was divine providence.

It turns out that Rechnitz and other skilled nursing tycoons stand to benefit handsomely from the Trump presidency. At the request of lobbyists for the nursing home industry, the Trump administration last month issued new guidelines discouraging regulators from levying fines in some situations, even when they have resulted in a resident’s death.

The guidelines will also probably result in lower fines for many facilities, according to a report in Kaiser Health News.

The article reported that since 2013, nearly 6,500 nursing homes — 4 of every 10 — have been cited at least once for a serious violation. Medicare has fined two-thirds of those homes. Common citations include failing to protect residents from avoidable accidents, neglect, mistreatment and bedsores.

While the nursing home industry argued that the enforcement was forcing them to spend more money on red tape, patient care advocates warned that Trump’s Centers for Medicare and Medicaid Services was making it easier for nursing homes to get away with insufficient care.

“They’ve pretty much emasculated enforcement, which was already weak,” said Toby Edelman, a senior attorney at the Center for Medicare Advocacy told Kaiser Health News.

Brius, the largest nursing home operator in California, is no stranger to enforcement actions by the federal Centers for Medicare & Medicaid Services. Brius operates one of every eight nursing homes across the state, but, as of last year, it accounted for half of all homes shuttered by the regulatory agency since 2010 due to patient-care and other violations.

Rechnitz, who recently testified that he owns several hundred million dollars in real estate, appears to be an unabashed Trump supporter. In an October interview, he marveled at how the former reality television won the White House while alienating so many people.

“Do you really believe that all of his voters were voting for him on their own, from their own free will?,” he asked. “Or maybe we have to say once again that someone is managing things from above, and He decided to make [Trump] president.”
Now Trump is making nursing home magnates at little bit richer – at the expense of patient care.


Brius sued over resident death in Humboldt County

The family of an 84-year-old woman who died in a Brius nursing home is suing the company, claiming that it intentionally understaffed the facility to cut costs.

The Eureka Times-Standard reported last week that 84-year-old Ida Branch died five days after being admitted to the Pacific Rehabilitation and Wellness Center in Eureka following a surgical procedure on her leg.

Branch’s relatives arrived at the facility to find her “barely alive … with significant changes in her mental status and breathing,” according to the lawsuit. “By then, the facility had still not provided (her) the breathing tube requested by her family every day since admission.”

Branch died later that night, according to the lawsuit, which also lists Brius owner Shlomo Rechnitz and Brius’ management company, Rockport Healthcare Services, as defendants.

Brius closed Pacific Rehabilitation and Wellness Center earlier this year, amid reports that the facility suffered from significant structural problems that would have required expensive upgrades.

The lawsuit comes on the heels of several wrongful death claims against Brius in Humboldt, including one case in which Brius settled a claim that that one of its homes was accused of dumping a blind man suffering from dementia in a local hotel with nothing to eat except a half-gallon of milk, instant noodles and Velveeta cheese.

Branch is being represented by the law firm of Garcia, Artigliere & Medby, which filed a lawsuit earlier this year against another Brius home in Eureka. alleging that the Eureka Rehabilitation and Wellness Center failed to prevent falls by a patient who suffered severe injuries from her falls.

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Brius debated by top California governor candidates

On Oct. 22, 2017, the National Union of Healthcare Workers sponsored a forum with the leading candidates to become the next governor of California. During the forum in Anaheim, the candidates were asked about Brius and the challenge of disciplining nursing home companies with poor patient care records.

Lt. Gov. Gavin Newsom said as governor he would take a proactive posture in making sure troubled operators are disciplined and that the discipline sticks. “If there’s a bad actor, you’ve got to call that out,” he said. “It’s a question of enforcing the laws on the books and making sure the folks appointed to the positions of oversight are doing their jobs.”

All of the candidates expressed openness to new laws tightening control over nursing homes. Former Los Angeles Mayor Antonio Villaraigosa said, “I’ll work with the legislature to make sure we have laws with teeth … to make sure they don’t get away with murder.”

State Treasurer John Chiang said he would make sure the state “identifies those bad actors so they can’t create subsequent companies,” a tactic Brius CEO Shlomo Rechnitz has employed in building his nursing home empire. Chiang added that bad actors can’t be allowed to “evade their past misbehavior. They have to fix the problem before going forward.”

And former State Secretary of Public Instruction Delaine Eastin said: “We need to make sure that those agencies that do the oversight over your hospitals and your nursing homes have people on fire to do the right things for all of you but especially for all those patients who are   not getting the kind of care they deserve in California.”



Brius administrator faces jail time in elder abuse prosecution

The embattled administrator of a Brius nursing home is standing trial this week in connection with criminal charges that he wrongfully discharged residents who were not capable of caring for themselves.

Brius owner Shlomo Rechnitz has so far refused to fire Rush Melliti, the administrator of the 160-bed Rehabilitation Center of Bakersfield, who faces up to 30 months in county jail if he is convicted of all three counts of elder abuse and two counts of wrongful discharge of a nursing home resident.

State prosecutors say that in one instance, Melliti erroneously told a female nursing home resident that she owed the home money. Then, prosecutors say, he sent her to an independent living apartment even though she was unable to work or go to the bathroom without assistance. According to prosecutors, the woman was unable to get out of the transport van, and was “sent to the hospital in an ambulance where she slept in the hallway for two nights.”

Prosecutors also say that Melliti, “without legal notice or justification, discharged one man, who ended up in the hospital, where his psychological issues required that he be physically restrained.”

In another instance, prosecutors say Melliti discharged a man without notice or instructions on how to take his medications. The man was unable to care for himself and had to be taken to a different nursing home to receive treatment for a wound on his non-amputated leg, according to court papers.

State records show that Melliti makes about $150,000 per year as the administrator of the Bakersfield home. Prosecutors are asking a judge to set a bail condition prohibiting him from working at facilities where he would oversee the care of elderly and disabled individuals.

This is not the first instance in which high-ranking Brius administrators have been criminally charged in connection with the care and treatment of residents. Two years ago, state prosecutors charged the director of nursing and the nurse supervisor of Verdugo Valley Skilled Nursing and Wellness Centre for failing to provide immediate care to a resident who later died at a nearby hospital.

In 2011, state prosecutors indicted Verdugo Valley’s administrator on charges of felony abuse and neglect in connection with the death of a different patient.

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Florida nursing home tragedy should be “a call to action” in California

Despite their nursing home being immediately across the street from a hospital with a fully functioning air conditioning system, eight residents of Hollywood, Fla. died earlier this month from stifling heat after Hurricane Irma knocked out the facility’s power supply. Could a similar situation happen at one of California’s 1,200 skilled nursing facilities?

“Authorities are still investigating what happened in the Hollywood nursing home tragedy, but this appears to be more about neglect and poor judgment than natural disaster,” National Union of Healthcare Workers President Sal Rosselli said. “California has stronger nursing home regulations on the books than Florida, but the state often struggles to enforce the rules and like Florida we have nursing home operators more focused on profits than patient care.”

California’s largest nursing home operator, Brius Healthcare, for example, has repeatedly ignored state regulations. Former California Attorney General Kamala Harris labeled Brius owner Shlomo Rechnitz “a serial violator” of nursing home rules in a 2014 emergency motion she filed seeking to prevent Brius from taking over 19 nursing homes in Southern California. That same year, Brius, which operates about 80 nursing homes in California, was tagged with three times as many serious deficiencies per 1,000 beds as the statewide average, according to a Sacramento Bee investigation.

Last year, the California Department of Public Health rejected Brius’ bid to permanently operate five nursing homes, citing records that the company had been cited for 386 serious patient care violations over the previous three years. Nevertheless, the state has not stopped Brius from continuing to operate those five homes as well as the 19 homes in Southern California under provisional licenses.

A report earlier this year, first posted to Brius Watch, documented how in 2015 Brius nursing homes paid $67 million to 65 firms controlled by Rechnitz and his relatives in exchange for various services, including a design and construction firm operated by Rechnitz’s son-in-law. Another one of the firms operates a private jet used by Rechnitz and his family members.

“The tragic deaths of frail seniors in Florida should be a call to action for all of us here in California to make sure that nursing home operators are running safe facilities and that regulators punish them swiftly and strongly when they put lives in danger,” Rosselli said.

Brius faces state audit

Brius will be the subject of a California state audit looking into the company’s business dealings with other firms owned by Brius CEO Shlomo Rechnitz and his family members.

By a vote of 12-0, the state’s Joint Legislative Audit Committee approved the audit Wednesday at the request of State Sen. Mike McGuire and Assemblymember Jim Wood.

Both legislators represent Humboldt County, where Brius controls every nursing home. Last year, the lawmakers successfully fought Brius from closing three of its five homes in the county without giving into the firm’s demand for higher reimbursements for Medi-Cal patients.

“Through that process we learned a lot about Brius, its ownership structure and business operating procedures,” Wood said in a prepared statement. “(That) compelled us to better understand the impact and appropriateness of what are called related-party transactions.”

State Sen. Mike McGuire and Assemblymember Jim Wood

Brius, which controls one of every 14 nursing homes beds in California, received over $507 million in Medicare and Medi-Cal funds in 2015 – more than 80 percent of its total annual revenue. An analysis of state data by the National Union of Healthcare Workers found that during the same year, Brius paid over $67 million to 65 companies controlled by Rechnitz or his relatives.

Meanwhile, over the past year, the California Department of Public Health has blocked Brius from taking over five nursing homes citing its poor patient care track record and fined one Brius home in Humboldt County $160,000 for violations stemming from failing to properly staff the facility.

“We commend State Sen. McGuire and Assemblymember Wood for requesting this audit,” NUHW President Sal Rosselli said. “With thousands of the California’s frailest seniors living in Brius homes, the state has an obligation to determine whether the company is spending taxpayer money as it was intended – to care for its residents.”

The California state auditor will examine data Brius reported to the Department of Public Health, Department of Health Care Services and Office of Statewide Health Planning and Development. The audit will also review current protocols for capturing transactions between companies with the same owner as well as the appropriateness of the transactions in order to ensure that services provided are fairly priced.

Several reports have already questioned whether Brius homes may be overpaying for rent and other services from Rechnitz-owned firms. For example, the North Coast Journal reported the following in 2016:

The disclosures include a section dubbed “related party transactions,” which describes financial interactions between parent companies and subsidiaries. Think of it as a kind of conflict of interest statement. In 2015, Eureka Rehabilitation and Wellness Center paid $42,000 to Boardwalk Financial Services, LLC for “administrative services.” The company employs Rechnitz as a consultant. It also paid $864,894 to lease the property. Who owns the property? Rechnitz. Eureka Rehabilitation and Wellness Center also paid $110,204 for medical supplies to TwinMed Medical Supplies and Services, owned by Shlomo Rechnitz and his twin brother, Steve. And it paid $47,663 to SR Capital, LLC, which lists Rechnitz as its managing member. Altogether, in the 2014-2015 fiscal year, as Rockport/Brius was playing a financial game of chicken with Partnership Healthcare and refusing to take in vulnerable seniors and people with disabilities, it managed to shunt more than $4.6 million back into companies affiliated with Shlomo Rechnitz.

While, on paper, the company may have lost money, Rechnitz still managed to profit. The amount he took in for lease payments alone in 2015 on the five properties — more than $3.5 million — was easily enough to cancel out Brius’ “unsustainable” combined loss of almost $1.5 million from the company’s Humboldt County holdings that year.

“As good stewards of state resources we must understand how Brius Healthcare and affiliated companies receive and invest Medi-Cal dollars,” McGuire said in a prepared statement.

Wood added, “This audit will investigate the inner workings and interrelated business relationships that exist in this industry and determine whether changes need to be made to protect the use of public funds for this vulnerable population.”

NUHW represents workers at two Brius homes in Marin County. Maria Martinez, who has worked as a nursing assistant for 27 years at the Brius-owned San Rafael Healthcare and Wellness Center, told Audit Committee members Wednesday in Sacramento that Brius “cut staffing levels, basic supplies and resources” when it took over the San Rafael home in 2012. “The quality of care for our residents has gone way down,” she said urging them to approve the audit. “We are understaffed almost every single day.”

Following this week’s approval of the audit request, the California State Auditor will now assign a team of auditors to carry out the investigation. The audit results will be published in 2018.

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Brius nursing home cited in resident death

State regulators have slapped a Brius nursing home with a severe patient care citation for leaving a 59-year-old obese, mentally ill resident in a prone position on her bed where she was later found dead.

Vernon Healthcare Center – one of the most troubled nursing homes run by Brius CEO Shlomo Rechnitz — received the Class A citation in March 2017, according to a California Department of Public Health citation obtained by Brius Watch. The agency has not yet announced financial penalties for the violation, which is the second most severe class of citations available to state regulators.

Investigators found that the nursing home repeatedly failed to follow protocol in caring for the patient, who experienced a “behavioral episode” the day before her death during which she began screaming and fell off her bed three times.

The facility failed to have a nurse assess her sudden deterioration or alert her doctor as required. Investigators also determined that staffers “did not receive appropriate training to manage a behavioral episode of a mentally ill, obese resident.”

Moreover, administrators at the home were unaware that the death merited an investigation and autopsy. The investigators wrote:

“When asked if the Director of Nursing knew that the resident was found not breathing and pulseless in a prone position, she answered, “Really?” Who told you that?”

The facility’s medical director told investigators he failed to investigate the death or request an autopsy because he was never informed that the resident was lying in a prone position when she was found unresponsive.

The Vernon facility is no stranger to major violations. Two years ago, the CDPH slapped it with a Class A citation and $20,000 fine for failing to provide adequate supervision and assistance to a nursing home resident that was at high-risk for falls.

That same year, the agency also fined it $60,000 for another Class A citation for failing to provide adequate supervision and assistance to a nursing home resident with a history of wandering behavior.

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California ruling threatens Brius expansion

Brius has mounted an 11th-hour challenge to a ruling by California regulators that denied the company licenses for five nursing homes and effectively has halted the company’s rapid expansion across the state.

Last July, the California Department of Public Health (CDPH) denied Brius licenses to operate the facilities citing the company’s 386 serious patient care violations over the previous three years. Brius lost its first appeal in December after it failed to provide to provide legal documents ahead of deadlines, triggering a “Default Decision” against it.

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On May 17, attorneys for Brius asked a judge with the Office of Administrative Hearings and Appeals to overturn the Default Decision and reinstate its appeal. A ruling is expected later this year.

The facilities in question are:
Anaheim Point Healthcare and Wellness Centre
Brookdale Healthcare and Wellness Centre
Chico Heights Rehabilitation and Wellness Centre
Chico Terrace Healthcare and Wellness Centre
River Valley Healthcare and Wellness Centre

Brius is currently operating all of them while it exhausts its appeals process. Should the ruling stand, it could have major ramifications for the company, which has emerged over the past decade as California’s largest nursing home operator, accounting for one-in-14 beds.

Brius’ expansion plans were challenged in 2014 when California Attorney General Kamala Harris filed an emergency motion in federal bankruptcy court seeking to block the company from taking over 19 nursing homes. In court papers, she called Brius CEO Shlomo Rechnitz  a “serial violator” of nursing home rules.

If the CDPH’s denial is upheld, Rechnitz may find himself unable to win approval for new nursing homes in California. In denying his applications last year, state regulators noted that 38 of Brius’ 386 patient care violations put patients in “imminent danger” of death or serious harm. Altogether, 265 of the 386 violations were at a scope and severity level of F or higher, indicating more serious and widespread violations.

There is no reason to think that the CDPH would soon become more amenable to the prospect of Rechnitz taking over additional facilities.

In fact, Rechnitz may have reached the same conclusion as he has already begun expanding into Nevada and Texas.