COVID Funds Fraud

Investigating COVID relief fraud is a critical mission at the Department of Justice. The Iowa Dispatch reported another facility diverting funds and defrauding creditors. Where is the accountability?

Indian Hills Health Care is the Iowa company that owns Touchstone Healthcare Community. They accuse the management company of stealing $1.8 million in COVID-19 stimulus payments away from the facility.

Last March, Health Dimensions Consulting, or HDC, sued Indian Hills for management fees.  The lawsuit alleges that in early 2019, HDC was to manage the nursing home in return for either $33,000 per month or 5.5% of the gross revenues, whichever was greater.  Touchstone was the target of a barrage of lawsuits filed by vendors claiming the nursing home wasn’t paying its bills and owed more than half a million dollars to creditors.

Touchstone’s owners filed a counterclaim against HDC. They accuse them of taking $1.8 million in COVID-19 stimulus payments that had been awarded to the care facility.

Health Services Group, or HSG, sued Indian Hills, claiming the owners of Touchstone had racked up more than $860,000 in debt while falsely telling creditors it had sold the business to a New York company called Queens Sweet Jane that was responsible for paying the bills.

HSG claimed that in reality, Indian Hills remained Touchstone’s actual owner and continued adding to the nursing home’s debt load. HSG alleged it was owed $483,000 by the care facility’s owners.

Court records indicate Indian Hills Health Care was organized and incorporated by Sioux City developer James C. Johnson in 2019.

According to Medicare records, the limited liability company is in turn owned by a revocable trust formed by Fred Davenport Jr.

Davenport is now dead, and a Sioux City man, Larry L. Book, is the company’s sole trustee for members of Fred Davenport Jr.’s family.