Tag Archives: Shlomo Rechnitz

Brius Healthcare’s Shlomo Rechnitz globetrotting on private jet

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Less than a year before California Attorney General Kamala Harris labeled him a “serial violator” of nursing home laws, Shlomo Rechnitz made a purchase that further called into question his commitment to provide proper skilled nursing care.

Rechnitz, whose firm Brius Healthcare is California’s largest nursing home operator, spent approximately $3.6 million on a luxury jet in 2013, which he operates through a subsidiary that receives direct payments from his nursing homes. Over the following three years, that plane circled the globe more than 20 times, while Rechnitz racked up nearly 400 patient care violations and threatened to evict nearly 200 elderly patients claiming his homes were losing money.

Revelations about Rechnitz’s Gulfstream G-IV – including its flights to international destinations like Brazil, Portugal, and Israel – are contained in a report issued this week by the National Union of Healthcare Workers (NUHW). The details come from previously unpublished records obtained from the Federal Aviation Administration and other government agencies.

Altogether, Rechnitz has spent an estimated $8 million to purchase and operate the jet.

Rechnitz’s spending habits should concern all Californians because he controls one out of every 14 nursing home beds in the state. And there is ample evidence that he is not spending enough to properly care for residents.

A Sacramento Bee investigation found that in 2014 Rechnitz’s homes were “tagged with nearly triple as many serious deficiencies per 1,000 beds as the statewide average.” One of his Los Angeles homes has been cited in connection with three separate resident deaths since 2009.

In July 2016, the California Department of Public Health blocked Brius from obtaining licenses to operate five nursing homes due to the company’s widespread violations of California’s patient-care laws. Harris labeled Rechnitz “a serial violator” in an emergency motion seeking to block it from buying 19 nursing homes three years ago. And the federal government barred three Brius nursing homes from treating Medicare patients due to severe violations of federal standards.

The report on Rechnitz’ private jet comes on the heels of recent articles raising questions as to whether he is siphoning money out of his nursing homes. The North Coast Journal reported that Rechnitz’ nursing homes in Humboldt County appear to pay inflated rent to  companies that he controls and that over the course of two years they paid $117,000 more to Rechnitz’s medical supply firm for “routine supplies” even though their admissions dropped 30 percent.

NUHW’s report – entitled “Misplaced Priorities at 40,000 Feet” – includes recommendations for policymakers and the public, as well as links to more than 100 pages of source documents obtained from government agencies.

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California Legislation Targets Brius

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Last year, Humboldt County residents learned that when a single company monopolizes an entire county’s nursing home beds, patients are at its mercy. Now, the county’s representative to the California Assembly, Jim Wood, is championing legislation that would limit the power of nursing home conglomerates to move patients far from their loved ones.

Last week, Wood introduced Assembly Bill 275 in response to Brius Healthcare’s bid last year to close three of its five nursing homes in Humboldt County. Brius, the largest nursing home operator in the state and the only one in Humboldt, threatened to force nearly 200 elderly and frail patients out of the county in what critics said was a ploy to boost the company’s Medicaid reimbursement rates.

After a four-month stand-off with local officials and patient allies, including the California Association for Nursing Home Reform and the National Union of Healthcare Workers, Brius CEO Shlomo Rechnitz backed down and agreed to close only one facility without forcing any residents of the county and away from their loved ones.

The episode was “a roller coaster ride of anxiety” for patients and their families, Wood, the Assembly Health Committee chairman, said upon introducing the legislation last week. “It became obvious to me that new protections would have to be put in place to prevent this trauma from happening to other residents in the future.”

Wood’s bill would strengthen patient safeguards and empower state regulators to protect patients and prevent operators from simultaneously closing multiple homes in one community.

Rather than merely being able to accept or reject an operator’s closure of a nursing home, Wood’s bill gives the California Department of Public Health the authority to require operators to adopt specific measures to “help prevent possible resident transfer trauma.”

If an operator is proposing to close two or more nearby facilities simultaneously, the department would be authorized to deny approval and “require the facilities to resubmit their closure plans with different timelines.”

The bill also:

  • Increases from 30 days to 90 days the advance notice that operators must give to residents prior to closing a facility.
  • Requires that patients being forced to relocate are assessed by a doctor and a mental health clinician.
  • Mandates that operators closing two or more facilities within a six-mile radius conduct a “Community Impact Report.” The report would include the number of affected residents; the number of nearby nursing homes; the reason for the closures; the number of residents who could potentially experience transfer trauma; and the number of residents who are taking psychotropic medications, diagnosed with dementia or under conservatorship.

California inspectors flunk Brius kitchen in San Rafael

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Brius’ San Rafael Wellness & Healthcare Center is located in one of the state’s wealthiest counties, but like many nursing homes operated by Brius CEO Shlomo Rechnitz, it can’t pass a basic health and safety inspection.

The latest issue surrounds it serving expired food to residents. Last year, the California Department of Public Health issued a 45-page report citing the nursing home for stocking its kitchen with expired food including six boxes of “thickened apple juice” that had been expired for nearly four months.

Inspectors also found bagels that had had been expired for more than a week and five bags of dry beans and three bags of chicken flavor stuffing that been expired for 18 months.

Not only were the food temperature logs and kitchen cleaning logs incomplete, but inspectors found that they were covered with a “thick black sticky substance.”

The facility was also cited for its failure to “employ a qualified dietitian” to manage its dietary services.

Today, as the state is reportedly preparing to cite the nursing home for more violations discovered during a subsequent inspection, issues with the kitchen have still not been fully resolved, according to caregivers.

This is hardly the first time that state regulators have cited the San Rafael facility, where Brius has refused to adopt caregivers’ proposals for improved staffing levels and other reforms designed to improve residents’ care and daily lives. In 2014, the facility was cited for being understaffed and under-resourced. Among the items in short supply were gloves and underwear.

Another 2014 report found that the linoleum floor had missing sections and the wooden handrail next to the bathroom was splintering. One resident described the facility as a “slum.”

The next year, inspectors cited the facility for continuing to admit patients during a norovirus outbreak. According to state records, the new patients soon were showing signs of being infected with the virus, which causes fever, vomiting and diarrhea.

When questioned by inspectors about admitting the patients, facility managers responded: “We have already taken the hit financially,” according to state records. Those mangers initially told inspectors that the new patients were admitted to a separate ward, but when pressed for floor plans, they admitted no such ward existed.

Report: California low-balling nursing home penalties

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How can Shlomo Rechnitz and Brius Healthcare assemble a stable of 81 California nursing homes while racking up 386 health and safety violations over a recent three-year period?

The answer may be found in a report issued last week by Disability Rights California. The nonprofit concluded that the state often issues strikingly different penalties for seemingly identical violations and often declines to seek the maximum penalty for nursing homes found to have violated safety rules.

Issuing lower-level penalties helps unsafe facilities stay open and deprives the state of lost fine revenue, the report found. And it keeps patients and their families in the dark about the safety risks posed by certain facilities.

The Sacramento Bee highlighted one of Rechnitz’s nursing homes to illustrate this practice in its article detailing the report.

In 2010, Armando Reagan was rushed from Rechnitz’s Vedugo Valley Skilled Nursing & Wellness Centre in suburban Los Angeles to a hospital bleeding from bedsores in his groin. Within an hour, he was dead.

Instead of issuing Verdugo Valley the harshest punishment – A Type AA citation and a $100,000 fine, the California Department of Public Health issued a milder Type A citation and a $20,000 fine.

That decision had consequences, the Bee noted, because Verdugo Valley had already received a AA citation in 2009. Had Reagan’s death in 2010 also resulted in an AA citation, the state would have had to revoke or suspend the facility’s license.

Instead, the facility remained open and was later hit with another AA citation in connection with the 2014 death of James Populus.

In fact, Disability Rights California found that state regulators classified more deaths as Class A Citations than Class AA citations between 2000 and 2014.

Insurer sues Shlomo Rechnitz in connection with Los Angeles nursing home death

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Shlomo Rechnitz’s nursing home just outside Glendale, Calif. has been fined, charged with involuntary manslaughter and indicted by a Los Angeles Grand Jury stemming from two patient deaths.

Now the company that insured the home is suing Rechnitz, the state’s largest nursing home operator, accusing him of omitting those facts when he applied for an insurance policy.

The lawsuit filed in federal court late last year by the Michagan-based firm ProAssurance could prove costly to Rechnitz, a billionaire, who recently found himself knee-deep in a Ponzi scheme.

ProAssurance is asking a federal judge to rescind its policy for Verdugo Valley Skilled Nursing & Wellness Center, LLC – a subsidiary of Rechnitz’s Brius Healthcare Inc., which controls one out of every 14 nursing home beds in California. ProAssurance is also asking the judge to declare that it has no duty to pay up if Rechnitz and Verdugo Valley lose an ongoing wrongful death lawsuit.

That could leave Rechnitz on the hook for any damages a jury awards to Carl Populus, whose 58-year-old brother James Populus died after receiving “grossly negligent” care at Verdugo Valley three years ago, according to a 2015 investigation by state Attorney General Kamala Harris.

The investigation found that the facility’s failure to provide proper medical care  led Populus to suffer “severe weight loss, sepsis and pneumonia.”

When a nurse reported that Populus had become verbally unresponsive and had a weak pulse, facility managers waited over an hour to call for an ambulance, according to court papers. Populus died at a nearby hospital six days later of “multiple system failure due to sepsis” with infections throughout his body, state investigators determined.

Prosecutors also filed felony abuse charges against two nurses at the facility.

Yet, according to court papers, Rechnitz’s facility answered “No” on its insurance application when asked by ProAssurance if it had ever been “the subject or investigatory or disciplinary proceedings or reprimanded by an administrative or governmental agency or professional association.”

The facility also made no mention on the application that the California Department of Public Health had issued it a Class AA Citation and a $100,000 fine in 2009 in connection to the suicide of 34-year-old Charles Morrill.

The CDPH later reduced the fine to $45,000, but a grand jury in Los Angeles County indicted the facility alleging that it had permitted Morrill to suffer “unjustifiable physical pain and mental suffering.” It further held that the home was complicit in Morrill ending his life by discharging a fire extinguisher down his throat.

Rechnitz still owns Verdugo Valley, but last year state regulators rejected his bid to buy five more nursing homes. They cited records showing that  his homes had racked up 386 serious violations over the previous three years — none more serious than the death of  Populus.

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Shlomo Rechnitz: Humboldt County’s #1 bad apple of 2016

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The North Coast Journal showed some alt-weekly moxie this week when it released its “Top 10 Dick Moves” of 2016.

To the surprise of no one who’s been following the news in Humboldt, the winner was Shlomo Rechnitz, the billionaire nursing home magnate, who owns all five nursing homes in the county.

Rechnitz’s firm, Brius Healthcare, threatened to close three of those homes, forcing patients to be transferred out of the region and away from their families.

Rechnitz claimed he was losing money, albeit not as much as he appears to have lost in a ponzi scheme. 

Still, the Journal did some digging that showed Rechnitz appearing to overcharge his nursing homes for supplies and rent. Of course, he owned the supply company and the buildings.

Ultimately, Rechnitz said he would only close one nursing home, and politicians pondered how to keep monopoly operators like Rechnitz from exploiting patients. Here’s what State Sen. Mike McGuire told the Journal earlier this month.

“Our early thoughts are that there should be a separate standard and additional oversight if there is a monopoly in one market. What we discovered is that the way the law is written now, all the power is in the hands of the operator.”

And here’s what the Journal had to say about that operator:

1. Shlomo Rechnitz

We have a winner. The game of chicken this out-of-area billionaire played with skilled nursing facilities — threatening closure in a bid for more state cash — was a greed-driven dick move that jeopardized some of the most vulnerable members of our community: the elderly he is charged with caring for. F**k that guy.

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Report: Shlomo Rechnitz invested millions in Madoff-like ponzi scheme

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It looks like  Shlomo Rechnitz might have gotten a taste of his own medicine.

For years, Rechnitz has collected millions in taxpayer money to operate the biggest stable of nursing homes in California while racking up so many health and safety violations that federal regulators decertified three of his facilities and state regulators this year rejected his attempt to buy five more.

Last week, however, 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.

The firm in question, Platinum Partners, was a hedge fund that had more than $1 billion under management, the paper reported.

According to the Journal, a person familiar with the scheme said that Rechnitz, who the paper described as a “billionaire nursing home magnate”  —  “had tens of millions of dollars tied up in Platinum and related deals.”

Prosecutors had already charged Murray Huberfeld, an associate with the hedge fund, with two counts of fraud, the New York Times reported in June. Those charges were in connection with allegations that he offered kickbacks to the head of New York City’s prison guard union in return for investing union funds in the hedge fund.

And guess who delivered the $60,000 in cash to the union president in a Salvatore Ferragamo bag, according to The Times? Rechnitz’s cousin, Jona Rechnitz.

So it looks like Shlomo Rechnitz might have gotten himself knee-deep in a ponzi scheme orchestrated by a hedge fund for which his cousin was soliciting business. Joan Rechnitz has already pleaded guilty in connection with the case and is cooperating with authorities, the Times reported.

As for Shlomo, The Journal reported that he’s had to cut down on some charitable giving in Israel, but the paper was silent on what this could mean to the mostly poor, elderly Californians who stay in his nursing homes.