Related-Party Scheme

The $45 million settlement between the New York Attorney General’s Office and Centers for Care LLC is another example of troubling patterns of financial exploitation in the nursing home industry being exposed.

Centers for Care, which operates over 30 facilities across New York, and even more facilities across the Northeast United States, misappropriated an estimated over $80 million in taxpayer funds intended for resident care. Through related-party transactions, these funds were funneled to owners and affiliates, leaving four facilities, Beth Abraham Center, Holliswood Center, Martine Center, and Spring Creek Rehabilitation Center, chronically understaffed and under-resourced. Residents in these facilities suffered neglect and inadequate care as a direct result of this mismanagement.

While the $45 million settlement is significant, it represents just over half of the estimated stolen funds. This partial recovery highlights an inevitable frustration in such cases: the financial penalties rarely match the scale of harm inflicted. Moreover, the investigation focused on only four facilities, and only ones in New York, so this definitely raises questions about similar practices across the company’s other facilities, such as those in New Jersey. Given the systemic nature of these issues, it’s hard to believe the misconduct was confined to these facilities alone.

This case reflects broader issues that plague the nursing home industry. Related-party transactions, like those used in this scheme, allow operators to divert funds from care into affiliated entities for personal profit, often leaving facilities understaffed and residents neglected. The affected facilities were already struggling with poor ratings and inadequate resources, all with ratings of 2 stars or lower,  yet Centers for Care decided to divert even more money away, prioritizing profit over resident care. Meanwhile, the company seems to maintain a few high-performing facilities to bolster its reputation, masking systemic failures that harm residents elsewhere.