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State AG's office issues subpoenas to operators of Cold Spring Hills nursing home

Investigators assigned to the attorney general’s Medicaid Fraud Control Unit have questioned current and former Cold Spring Hills employees. Newsday's Faith Jessie brings us the story, with investigative reporter Sandra Peddie. Credit: Newsday / Reece T. Williams

The state attorney general’s office has issued subpoenas to the operators of Cold Spring Hills Center for Nursing and Rehabilitation following Newsday’s investigation last month detailing the impact of the COVID-19 pandemic on the residents, families and staff of the 588-bed facility.

Investigators assigned to the attorney general’s Medicaid Fraud Control Unit have also questioned current and former Cold Spring Hills employees, as well as family members of current or past residents.

A lawyer for Joel Leifer, who is listed in state records as one of the two "managing members" of Cold Spring Acquisition LLC, the licensed operator of the facility, confirmed that Leifer had received a civil subpoena seeking information about the facility’s operation.

"The attorney general’s office has a right to issue subpoenas, and they’ve done it," said attorney Jerome Levy. "It was probably generated as a result of an article in Newsday."

Menashe Shapiro, a spokesman for the nursing home’s second managing member, Avi Philipson, declined to comment.

Cold Spring Hills reported 35 coronavirus-related deaths to New York State. Fifteen were reported as confirmed COVID-19 fatalities, and 20 were reported as presumed COVID-19 fatalities.

Newsday’s investigation, published Aug. 14, found evidence that the total undercounts the death toll.

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As set by state policy, the figure of 35 does not include residents who died at the hospital after being transferred from the nursing home.

Additionally, death certificates filed with the Town of Oyster Bay clerk show that more than 35 residents of the facility died there during the peak of the pandemic. According to the clerk, 116 residents died at the facility from March 1 to May 31, a figure that also was greater than the 44 deaths recorded at the nursing home in the same time frame last year.

The attorney general’s Medicaid Fraud Control Unit is responsible for safeguarding "elderly and disabled New Yorkers from abuse and neglect in nursing homes and other health care facilities." Medicaid covers the cost of long-term care for the elderly and is partly funded by the state budget.

Five current and former Cold Spring Hills employees and two family members of current or past residents said they have been contacted in the past month by an investigator based in the attorney general’s regional office in Hauppauge.

The people contacted include three current and former employees who spoke to Newsday on condition of anonymity because they feared retaliation, and two others represented by attorney Tyrone Blackburn. Blackburn has filed a wage-discrimination lawsuit against the facility.

A spokeswoman for state Attorney General Letitia James declined to comment on the subpoenas.

Investigators questioned current and former employees about patient care, whether there was enough personal protective equipment and the general operation of the facility, people interviewed by Newsday said.

Among those contacted by the investigator from the attorney general’s office are two Cold Spring Hills employees quoted in Newsday’s story, according to Mindy Berman, spokeswoman for 1199 SEIU United Healthcare Workers East.

"We fully support the AG’s investigation and are willing to assist in any way possible," said Timothy Rogers, vice president of the nursing home division for 1199 SEIU. "Too many residents have passed away, and even workers from this pandemic, and there needs to be a full understanding of what went on."

Blackburn said two of his clients were asked about the treatment of patients, as well as the center’s administrator, Yossi Emanuel.

Emanuel, reached by phone on Aug. 31 and asked if he had received a subpoena, said, "I’m sorry. I cannot comment."

Newsday’s investigation revealed that longtime business partners Bent Philipson and Benjamin Landa and six of their family members had amassed interests in 163 nursing homes — including Cold Spring Hills — in 18 states, according to federal records.

In 2018, the last year totals were available, the facilities generated $2.3 billion in Medicare, Medicaid and private revenue, including $1.1 billion from 36 homes in New York. The records do not reveal how much Bent Philipson, Landa and their families profited from the facilities.

At Cold Spring Hills, members of the Philipson and Landa families have been investors both in a company that owns the 11-acre property in Woodbury where the facility is located and in the company that operates the nursing home.

State records show that in 2016 Landa and a Philipson family trust held interests in the firm that purchased the property. Landa’s lawyer, Howard Fensterman, said that, as the nursing home’s landlord, the company had no role in the facility’s operation.

The 2016 records also identified Philipson’s son, Avi Philipson, and Landa’s daughter, Esther Farkovits, as investors in the company responsible for running the facility.

Additionally, Philipson spokesman Shapiro told Newsday in July that Bent Philipson was a "member" of a consulting company that provides management advice to the nursing home.

Bent Philipson and Landa severed their business relationship last year after Landa accused Philipson in court papers of diverting $53 million into a Bermuda-based insurance entity. Philipson denies the accusation. The lawsuit was settled after the partners drew up a memorandum of understanding that outlined a split in their assets.

Fensterman said that Landa ended his involvement at Cold Spring Hills in 2019 and has received no rental income since then.

"Inasmuch as Mr. Landa is not and was never an owner of the nursing home he had no involvement in its operations," Fensterman said. "As a result, he was not subpoenaed."

The investigation comes at a turbulent time for employees at the facility. Some 1199 SEIU workers picketed in front of Cold Spring Hills Aug. 27 about planned layoffs.

Last month, Cold Spring Hills filed a notice that it planned to lay off about 40 employees, and reduce the hours of another 25, Rogers said.

"It’s one of the most deplorable things for an employer to do — thank workers who put their lives on the line by giving them a pink slip," Rogers said. "They didn’t give them hazard pay. But they’re giving them a pink slip."

He also noted that the nursing home received federal money as part of a COVID-19 relief package for nursing home providers. Federal records show that Cold Spring Acquisition received $3,411,620.

Shapiro, also spokesman for Cold Spring Hills, said the COVID-19 pandemic prompted layoff notices because of the number of patients has dropped and the adult day care program has been suspended.

The facility had 126 empty beds as of Aug. 19, the most recent publicly available data, up from 32 on March 11. "We hope to hire employees back when things return to normal," Shapiro said.

Cold Spring Hills representatives met with union officials Sept. 2 and agreed to postpone the layoffs until Sept. 23, "so we can continue to work with 1199 and save as many jobs as possible," Shapiro said.

The union workers’ picketing also came on the same day of an "unannounced visit" by state Health Department investigators, according to department spokesman Gary Holmes.

Berman, the union spokeswoman, said workers were asked if they walked off the job to picket. Berman said only employees who were on break or off were picketing.

Holmes added, "No deficiencies were observed and our review indicated residents were safe and adequate care was being provided."

With David Schwartz

Correction: An earlier verison of this story misidentified the name of the facility.

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As a public service, this article is available for all. Newsday readers support our strong local journalism by subscribing.  Please show you value this important work by becoming a subscriber now.

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