EL AL was struggling financially even before the pandemic, and of course the pandemic only exacerbated issues, especially with Israel’s strict border controls. In late 2020, it was announced that an American-Israeli businessman who owns nursing homes, would buy a controlling stake in EL AL for $107 million. Well, there’s now a rather troubling update about that…
In this post:
EL AL owner sued for neglecting nursing home patients, misusing funds
New York State Attorney General Letitia James has this week filed a lawsuit against Kenneth Rozenberg, who owns Centers Health Care, the owner of four nursing homes. Rozenberg is accused of neglecting residents and misusing more than $83 million of government funds, spending it on buying EL AL, rather than taking care of residents.
Specifically, the suit alleges that Centers Health Care owners used illegal and fraudulent schemes to misappropriate Medicare and Medicaid funds to enrich themselves and their associates, rather than taking care of residents. In 2020, $103 million of this money from Medicare and Medicaid was reportedly transfered to Rozenberg, to fund the purchase of EL AL.
James states the understaffing at the nursing homes contributed to neglect, like residents being malnourished, and sitting in their own urine and feces for hours. James is seeking a return of the money and a ban on new admissions until staffing is increased.
According to the lawsuit:
“Residents were left alone and on their own, often unaided and unsupervised, leading to dangerous falls and broken bones. Residents lived in squalor, surrounded by neglected food trays, vermin and the smell of human waste.”
“This $103 million loan came, at least in part, from Hagler’s fraudulently and illegally obtained profits from Medicaid-funded nursing homes.”
“Rozenberg’s investment in El-Al, which ultimately allowed him to become the controlling shareholder of the airline, was made possible by his and Hagler’s longstanding pattern of fraud and illegality.”
A spokesperson for Centers Health Care denies these allegations, stating the following:
“Centers Health Care prides itself on its commitment to patient care. Centers denies the New York Attorney General’s allegations wholeheartedly and attempted to resolve this matter out of court. We will fight these spurious claims with the facts on our side.”
This isn’t the first time that Centers Health Care is accused of fraud. In 2018, the company paid a $1.65 million settlement related to fraudulent billing practices. At the time, the company was painted as one that scooped up not-for-profit nursing homes, and turned them into for-profit nursing homes by laying off employees, cutting costs, changing the ratio of workers to residents, etc.
EL AL’s interesting ownership structure
Another interesting element to this story is exactly how the EL AL investment and takeover happened. One of the conditions of taking over EL AL was a requirement to be an Israeli citizen. Kenneth Rozenberg wasn’t an Israeli citizen when he wanted to buy the airline, so he instead purchased the controlling stake in the name of his 27-year-old son, Eli Rozenberg, who was studying at a religious seminary in Jerusalem.
The family had no experience in the airline industry, but the elder Rozenberg was reportedly instructed to purchase the airline by his rabbi.
During the takeover process, EL AL’s lawyers repeatedly asked if the 27-year-old would be running the airline, or if the airline was simply being purchased on behalf of someone else (and therefore not meeting the standard of actually being purchased by an Israeli citizen). He insisted he would be the one to run the airline, but that’s not what happened.
Months later, Kenneth Rozenberg took on Israeli citizenship, and took over the airline.
Bottom line
EL AL’s owner is accused of using funds fraudulently obtained from his nursing home business to buy a controlling stake in Israeli national carrier EL AL. He reportedly misused $83 million worth of Medicare and Medicaid funds, spending them on buying the airline while neglecting nursing home residents.
I’m curious to see how this lawsuit goes, as these are some pretty awful allegations.
What do you make of this lawsuit against the owner of EL AL?
'Government funded health system' (or 'free' healthcare as the left love to demand), easy money and the best
culture broth for corruption, just like many of the new oligarchs that emerged in Venezuela since the socialists kidnapped the country. The US is looking very similar to what happened in Venezuela in the early stages of its destruction.
Actually no, let's not conflate these. This is the story of a private firm running for-profit nursing homes (to horrible ends, by the sounds of it) that gained access to some public funding and then immediately mis-used it.
A truly public-run healthcare system wouldn't have these issues (although it has issues, to be sure), and are not subject to the same corruptive temptations because you don't have healthcare providers who are in it for...
Actually no, let's not conflate these. This is the story of a private firm running for-profit nursing homes (to horrible ends, by the sounds of it) that gained access to some public funding and then immediately mis-used it.
A truly public-run healthcare system wouldn't have these issues (although it has issues, to be sure), and are not subject to the same corruptive temptations because you don't have healthcare providers who are in it for the money and can surreptitiously funnel funds to other completely different lines of business.
This is the story of power hungry capitalism, not socialism - nice try though.
And here come the "excuse makers" for the eternal "VICTIMS". surprisingly no one ha played the "A.S." Card yet.
As an expert in long term care finance and regulations these stories are all too common.
Yellow journalism at its best!
"His rabbi reportedly told him to buy it"
REPORTED WHERE? NAME OF RABBI?
No one is pouring $100 million into a bad deal bec his rabbi told him
he knows more than you think, since he took charge el al profits soared
While I've seen this site go Tabloid quite often lately, this is like pulling a Gary.
Hardly travel related. This is like saying Randy got a parking ticket.
Anyhow, the nursing home system, and the health insurance system, is just like the tipping system, very broken.
Lawyers, also broken.
Accusing that Medicare was used to fund El Al is just like accusing every American who bought iPhones for purchasing weapons for the...
While I've seen this site go Tabloid quite often lately, this is like pulling a Gary.
Hardly travel related. This is like saying Randy got a parking ticket.
Anyhow, the nursing home system, and the health insurance system, is just like the tipping system, very broken.
Lawyers, also broken.
Accusing that Medicare was used to fund El Al is just like accusing every American who bought iPhones for purchasing weapons for the People's Liberation Army. (Even if that's how the money moves)
The neglect in Healthcare, specifically step down treatment centers, is mainly due to the difficulty in finding staffing. They are constantly short staffed since covid, even when offering pay increases. Most industries are struggling with this in today's economy, unfortunately when it comes to Healthcare, the effects of this are very sad. Defrauding gov funding is a crime that has to be proven in court, but it won't solve the Healthcare crisis, they need more...
The neglect in Healthcare, specifically step down treatment centers, is mainly due to the difficulty in finding staffing. They are constantly short staffed since covid, even when offering pay increases. Most industries are struggling with this in today's economy, unfortunately when it comes to Healthcare, the effects of this are very sad. Defrauding gov funding is a crime that has to be proven in court, but it won't solve the Healthcare crisis, they need more caring people to want to work in these facilities
Not saying that my following recollection has anything to do with this case, but one past visit I had to some nursing homes in Ohio reminded me of this...
So, visited a small group of nursing facilities in the Cincinnati area back around '17 or so. They were run by Israeli guys who seemed pretty well healed. When I toured these places, I was shocked at how horrible they were. Run down facilities, dirty, smelly,...
Not saying that my following recollection has anything to do with this case, but one past visit I had to some nursing homes in Ohio reminded me of this...
So, visited a small group of nursing facilities in the Cincinnati area back around '17 or so. They were run by Israeli guys who seemed pretty well healed. When I toured these places, I was shocked at how horrible they were. Run down facilities, dirty, smelly, the residents seemed to get lackluster care, etc. Clearly, they were getting a lot of government money to house impoverished people in need - and whatever they were spending on the 3 facilities I visited wasn't close to enough. I'm not squeamish, but these were such horrible places that I'll never forget it - and would rather go into the woods to die rather than to live as those poor souls were living.
I just wonder if the El Al guys were running the same kind of hellholes, because in reading the story it sure seemed familiar.
Special place in hell for neglecting the elderly and sick all while stealing government money for their care. And the straw deal to purchase EL AL was so obvious it makes you wonder how it went through. Ugh. Horrible people.
This is an absolute nonsense case where the AG is simply targeting a sector to gather publicity and make herself popular with her constituents. She has a disdain for anyone that has been able to showcase success in their career.
Doesn't matter . . . it's still interesting to see what that young man who's supposedly in charge of an airline and his father (who's just the creditor of $$$) have to say, how an elderly home is able to make such an amount of money for not doing what they're supposed to do, i guess if that elderly home is "run" that way, can you imagine how an int. airline is run then?
Makes sense, to get to the bottom of it all!
Showcase or not.
he has over 50 facilities and the biggest ambulance company in nyc so this is not where he got all his money
Calm down Jackstein shekelberg.
Absolutely,
If she was really that worried about nursing home neglect there are better places to start then investigating a volunteer paramedic of 30yrs