Slumlord Manifesto

Last spring, disgraced New York Gov. Andrew Cuomo signed into law a simple but sweeping reform that would have required nursing homes to spend a majority of their revenue on patient care. Specifically, the law required nursing home operators to spend 70 percent of their (near-exclusively government-supplied) revenues on qualified patient care–related expenses, more than half of which needed to be patient-facing staffers like nurses, nursing assistants, and nutritionists. Additionally, the law permits state health authorities to claw back any profits in excess of a 5 percent margin to finance a state fund for adding staff at financially struggling facilities—a seemingly modest requirement, given that the nursing home lobby claims the average skilled nursing facility barely breaks even.

In practice, this law, broadly dubbed the “safe staffing law,” was bound to run afoul of New York’s incomprehensibly powerful nursing home mafia. In theory, however, it was a refreshingly bullshit-free blueprint for fixing one of the most pointlessly horrifying features of 21st-century American health care: Virtually every institution in the business of caring for the sick is chronically, deliberately, and murderously understaffed, a state of affairs that has arguably killed more Americans than the virus itself since the pandemic began.

But while health care workers are acutely aware of the extent to which that understaffing is a man-made phenomenon promulgated by the greed of the bosses, politicians continue to speak of it as some sort of act of God, with governors from New York to Nebraska declaring their care worker shortages states of emergency, deploying the National Guard to serve as nursing assistants at gruesome death-trap facilities whose owners have been sued for wage theft, and subsidizing travel nurses for politically connected hospitals.

Late on New Year’s Eve, Cuomo’s successor Kathy Hochul made the most significant intervention, abruptly postponing enforcement of New York’s safe staffing law, reasoning somewhat paradoxically that the state’s health care staffing shortage was simply too severe to start enforcing the law to clamp down on health care staffing shortages. Instead, Hochul a few days later unveiled a $10 billion plan apparently designed to achieve the same outcome by spending $4 billion in state funds subsidizing care worker salaries to “bolster our bone-tired health care workforce.”

WHAT HOCHUL NEGLECTED TO MENTION was the extraordinary 133-page lawsuit that 334 of New York’s nursing homes had just filed in federal court against the state’s health commissioner, demanding the safe staffing law be struck down on constitutional grounds. The nursing homes allege that the law constitutes an “unconstitutional taking of Plaintiffs’ private property for a public purpose.” If this rationale strikes you as preposterous, given that Medicare and Medicaid supply 82 percent of the nursing home industry’s alleged “private property,” it gets even crazier over the following pages. The nursing homes’ lawyers inexplicably lay out in specific detail the size and scope of the profits that would be “confiscated”—variations on which the complaint invokes 110 times!—under the new law.

Taken together, the homes claim that if the new law had been in effect in 2019, the government would have clawed back $824 million in “constitutionally protected” profits from the nursing homes, one-third of which would have been coughed up by the top 40 most profitable homes alone. “I think what that number indicates is the amount of money they’re supposed to be spending on care that they’re instead extracting in profits,” said Ron Kim, the Queens assemblyman who introduced the safe staffing law.

Indeed, if the complaint’s figures are accurate, the state would have more than a billion dollars per year with which to recruit, train, and deploy extra nursing staffers to struggling facilities if it actually enforced the law. Just the $510 million in profits detailed by the plaintiffs’ 239 most profitable properties could fund the salary and benefits of 5,600 additional registered nurses, says Richard Mollot of the Long Term Care Community Coalition, which plugged the lawsuit’s figures into an eye-popping database.

The suit represents a wild departure from the nursing home industry’s historical party line that it is egregiously underfunded and barely able to break even. Since the passage of Medicare and Medicaid gave birth to the modern American nursing home industry, owners have argued year after year that the government simply does not provide them with sufficient funds to employ enough staffers to adequately care for their residents, while critics have responded that the funds would be plenty sufficient if owners did not insist on siphoning away such a lavish portion of said funds for themselves. The quantifiable truth of the matter has been obscured by the cocoons of esoteric accounting bullshit that generally swaddle most for-profit nursing homes.

Now in the New York complaint, ownership is unabashedly arguing that abusing workers and patients to extract windfall profits from public programs is its constitutionally protected right. This is particularly significant because the most profitable of the plaintiff homes are largely owned by an interconnected gang of prolific health care slumlords that has aggressively expanded its reach in recent years, undeterred by the series of FBI raids, mass casualty events, criminal prosecutions, and media clusterfucks that has engulfed their empire.

Two of the organization’s up-and-coming underbosses bought the nation’s largest nursing home chain last spring; alpha boss Benjamin Landa acquired a stake in Florida’s biggest nursing home chain Consulate Health Care at some point before the corrupt bankruptcy filing of some of its corporate cousins; another underboss bought a 61-home chain based in Nashville over the summer; still another bought the Israeli airline El Al and moved to Israel, where many of the mom-and-pop investors who bankroll the nursing home mafia’s expansion reside; and a New Jersey investment fund with extensive ties to the plaintiffs has swallowed up over 100 more homes since the pandemic began.

Most of the whales of the emerging nursing home mafia started in New York, where a brief tour of the top ten most profitable nursing home plaintiffs offers a revealing glimpse into how the mafia is organized. Ownership is unabashedly arguing that abusing workers and patients to extract windfall profits from public programs is its constitutionally protected right.

THE SINGLE MOST PROFITABLE PLAINTIFF in the complaint, appropriately enough, is the 302-bed Pavilion at Queens, which happens to be 40 percent owned by Deena Landa Hersh and Esther Landa Farkovits, the “retired homemaker” and yoga instructor-cum-teacher daughters of the aforementioned Benjamin Landa, whose documented crimes range from human trafficking to flagrant Medicare and Medicaid fraud to staffing his homes so minimally that patients regularly die from literally rotting in their own filth—or in the case of one more ambulatory resident, attempting to escape his misery by climbing out of a third-story window.

Landa’s sordid story alone could easily fill a book, but his critics tend to regret crossing him. In 2006, he and his longtime attorney Howard Fensterman worked their formidable political connections (including Chuck Schumer) to get criminal reckless endangerment charges filed against a group of Landa-recruited Filipino nurses who walked off the job at a desperately understaffed nursing home after getting their pay and hours illegally cut. In 2016, Landa sued ProPublica for libel over an investigation into his gruesome nursing home chain, compiled near-entirely on the basis of public records; in 2020, he filed a libel suit against an Erie County commissioner who called him a “deadbeat” on Twitter.

In a single year, a single nursing home owned by Landa’s family took in some $13.1 million in revenues that would have been “confiscated” under the safe staffing law, and there are hundreds more homes in the broader Landa empire where that came from. Esther has stakes in 22, and her husband Josh co-owns 65. Eight of the 40 most lucrative homes listed in the New York lawsuit are co-owned by a Landa family member, and of the remaining 32 at least 25 are owned by Landa business partners or their closest associates. At the same time, of the 18 New York nursing homes the Centers for Medicare & Medicaid Services designates “Special Focus Facilities” or SFF candidates on its annual compendium of the nation’s most dangerous nursing homes, ten are owned by members or associates of the Landa nursing home gang. The most lucrative homes are not exactly the same as the most gruesome ones: The most profitable nursing homes must fill most of their beds with short-term Medicare patients recovering from surgeries, and those patients tend to try hard to steer clear of the most notorious death traps. But as the most unabashed slumlords expand their reach in senior care, the distance between a one-star home and a five-star home has shrunk considerably.

The lawsuit’s second-most lucrative home, the 449-bed Upper East Side Rehabilitation and Nursing Center, is run by a man named Leopold Friedman, who also co-owns 18 other nursing homes in Florida and New York, including five properties co-owned by Landa daughters and one on the SFF candidate list. More recently, Friedman launched a new company called Aurora Health Ventures that last year acquired the underlying real estate of some 118 nursing homes formerly owned by publicly traded real estate investment trusts. Just that single uptown nursing home—whose underlying real estate Friedman also co-owns—generated $12.9 million in 2019, revenues that would have been clawed back under the safe staffing rule. Upper East Side also ranked a close number two on another dubious list, taking advantage of a disastrous Cuomo directive during the initial COVID outbreak and admitting 110 hospital patients and 44 former residents who had been transferred to hospitals for COVID treatment during the early weeks of the pandemic. Upper East Side ultimately lost an astounding 85 residents to COVID or presumed COVID.

Landa and Friedman are both, incidentally, estranged former business partners of Joseph Schwartz, who acquired more than 150 nursing homes through his company Skyline Healthcare between 2015 and 2017, almost immediately stopped paying his bills in a corporate meltdown that became a massive headache for health commissioners in nine states, and was for some reason only hit with his first criminal charges last month after what Arkansas prosecutors claimed had been a 44-month investigation. (The indictment was followed shortly by two more in Nebraska, where prosecutors say Schwartz defrauded the state Medicaid program of $59.6 million, and New Jersey, where he was finally arrested for having allegedly skipped out on $29.7 million in taxes, though the indictment remains sealed.) The Skyline saga left dozens of homes under the control of Landa associates; Leo Friedman got the five Florida homes, and another two Friedmans, probably unrelated to Leo but definitely connected to the Landas, took Skyline’s Tennessee homes under the banner of CareRite LLC.

Third on the most-profitable list is Bensonhurst Center for Rehabilitation, whose controlling owner Charles-Edouard Gros’s Center Management Group owns at least 20 nursing homes in New York, New Jersey, Pennsylvania, and Connecticut, most of which he acquired during the past decade from various subsidiaries of the Catholic Church. Gros is connected to Landa through their mutual longtime business partner Bernie Fuchs, who was also until recently CEO of the “Ponzi-like” collapsed hedge fund Platinum Partners, and who owns a minority stake in Bensonhurst and a 120-bed home upstate that last year received the biggest fine in the history of New York nursing homes over a COVID outbreak that killed at least 23 residents.

In 2018, Gros made headlines for having turned a struggling suburban nursing home he’d purchased from the Philadelphia Archdiocese into the second-most profitable home in Pennsylvania by firing half of its registered nurses while simultaneously jacking up the number of high-acuity Medicare patients it admitted. The home was cited for jeopardizing the lives of patients so many times that prosecutors charged one of Gros’s minions with criminal reckless endangerment and the state temporarily assumed control of its management. (Bizarrely, authorities also discovered that someone at the home had mysteriously registered 34 dementia patients to “vote” via absentee ballot in a close local election.) Gros has worked similar financial miracles at Bensonhurst, buying the 200-bed home for a mere $6.26 million from the bankrupt St. Jerome’s Health Services Corporation in 2012 and turning it into a profit-making machine so quickly that by 2019 it was generating an annual $12.1 million in excess of what the new law would have permitted, and was eligible for a $46.6 million mortgage.

Rounding out the Top 10 list of plaintiffs are Fairview Nursing Care Center in Forest Hills, Queens; Oxford Nursing Home, Inc.; Riverside Premier Rehabilitation and Healing Center; Seagate Rehabilitation; Atrium Center for Rehabilitation and Nursing; Boro Park Center for Rehabilitation and Nursing; and Spring Creek Rehabilitation and Nursing, the penultimate of which had an astonishing 73 residents die of COVID in 2020. Each of these homes made somewhere between $7.95 million and $12 million in 2019 surplus understaffing revenues, and each is connected to the Landa elder abuse keiretsu.

Gros used to run Fairview, and its owner co-owns a home with one of Friedman’s business partners. Oxford is owned by Barry Braunstein, whose Braunstein Bears 2016 Trust co-owns 14 homes with Landa’s son-in-law Josh Farkovits. Riverside’s co-owners Devorah Friedman and Sharon Einhorn also own a home with Landa’s original political fixer and former health care staffing firm CEO Joseph Goldberger, and their families own the nursing home chain CareRite LLC, whose merciless cost-cutting at two former Skyline homes in Tennessee was chronicled in a Bloomberg story about how ownership austerity exacerbated the pandemic. Seagate is co-owned by the Landa daughters; Spring Creek has been 49 percent owned by Ben Landa and 32 percent owned by Deborah Philipson since 2001, though that may have changed since Landa accused Philipson’s husband of embezzling $53 million from their SentosaCare chain in 2019. Atrium is controlled by a partner in Landa’s 37-home Kentucky health care portfolio named Joel Leifer. And Boro Park is owned by Kenny Rozenberg, whose original business partner (Jeremy B. Strauss) co-owns numerous homes with the Fuchs family and who shares many similarities with Gros; both got their start a decade ago buying Catholic homes out of the same bankruptcy auction, upon which Rozenberg laid off 55 of the nursing home’s 60 registered nurses on staff the week he assumed ownership.

Rozenberg, who owns three nursing homes on the SFF list, recently emigrated to Israel after acquiring a controlling stake in the Israeli national air carrier El Al. “I thought that what I know how to do is to mend broken companies,” Rozenberg told an Israeli newspaper last fall of the purchase, which captivated the local press in part because the airline’s “official” owner is Rozenberg’s 27-year-old son Eli—a Yeshiva student whose dual citizenship enabled him to legally own the company when his dad could not—and in part due to rumors that powerful rabbis had recruited Rozenberg for the job out of fear that a more aviation-savvy investor would have forced the airline to begin flying on the Sabbath.

IT’S PROBABLY WORTH ADDRESSING that virtually all of the individuals affiliated with the Landa et al. nursing home cartel are Orthodox Jewish, though a smattering of gentile names with deep roots in the nursing home business show up in some partnership documents. For reasons surely dominated by the same sort of anthropological patterns that tie most immigrant groups to certain sectors of small business, Orthodox Jews have for nearly a century been vastly overrepresented in East Coast nursing home empires; my own grandmother spent her final years in a small and well-maintained home in Northern Virginia that my mother recently related to me had been operated by an Orthodox Jewish woman.

But the defining trait of the Landa enterprise and its ruthless post-pandemic expansionism is neither ethnic nor religious; it is the raw opportunism of a sophisticated mafia confident its political connections will safeguard its tradition of impunity. The group milked Cuomo deftly, reaping windfalls from the influx of lucrative COVID patients to their homes and an unprecedented liability shield that removed virtually all the financial risk. Cuomo subsequently took the blame for the bloodbath that ensued, with owners promoting the fanciful notion that he had “forced” reluctant homes to accept patients.

As Cuomo outlived his usefulness, the gang focused on cultivating Hochul, whose campaign committee took more than 60 checks of $1,000 or more apiece from nursing home LLCs over the course of two single days in October and December, as well as Eric Adams, whose closest confidant and newly named chief of staff Frank Carone has represented Landa underboss Joel Landau’s Allure Group and is a law partner of Landa’s longtime attorney and serial business partner Howard Fensterman, himself a co-owner of 16 nursing homes.

While the nauseating disparity between public scrutiny of Cuomo’s mundane sexual creepiness and his enablement of more than 20,000 preventable deaths became something of a cliché last year, no one in New York ever even attempted to expose or punish any of the real villains behind the state’s nursing home bloodbath. In fact, the closest anyone came was probably the Burlington alt-weekly Seven Days Vermont, whose investigation of a Landa cell’s bid to buy five nursing homes in that state led health officials to conduct an awkward two-hour remote grilling session with two sub-bosses who ultimately abandoned the deal in the last week of December.

But there are plenty more fish in the sea for Landa and company to feast upon, and little sign anyone with power or influence over how your tax dollars are spent intends to stop them. As legislator Ron Kim notes wearily: “Hochul is literally subsidizing the growth of these mega-scale exploitative nursing home chains.”