AG Letitia James: $656,000 from Unlicensed Ballston Spa Nursing Home Operator for Years of Fraud and Neglect; Settlement Follows Four Prior Settlements Against Nursing Home’s Operators For $7.1 Million

SARATOGA COUNTY —New York Attorney General Letitia James and the United States Attorney for the Northern District of New York Carla Freedman announced in late December they had secured $656,000 in a settlement with Chaim “Mutty” Scheinbaum, an unlicensed operator of the Saratoga Center for Rehabilitation and Skilled Nursing Care (Saratoga Center) for years of fraud and resident neglect. 

From 2017 to 2021, Scheinbaum operated the nursing home in Ballston Spa without a license from the state, in violation of New York law. 

Under his control, conditions at Saratoga Center rapidly declined. The facility lacked hot water and clean linens, and residents suffered falls, pressure sores, and other significant lapses in care, according to a statement released by the N.Y. attorney general’s office. 

The facility – formerly known as Maplewood Manor when it was owned and operated by Saratoga County – was sold by the county in 2015. 

The settlement follows four prior settlements as part of a resolution in February 2023 with Saratoga Center’s owners, a second unlicensed operator, and the facility’s landlord, for over $7.1 million. 

“Every resident of New York’s nursing homes deserves high-quality care and proper staffing to meet their needs,” James said in a statement. “Rather than ensure vulnerable residents got the care they deserved, this individual mismanaged Saratoga Center’s finances and failed to adequately staff the facility, causing residents to suffer the consequences of neglect and unsanitary conditions. 

Saratoga Center operated as a 257-bed nursing home from 2015 until it closed in 2021. In 2017, the landlord pressured the owners to relinquish control of Saratoga Center to unlicensed operators, including Scheinbaum, but did not report the change to the Department of Health (DOH).

The conditions at Saratoga Center declined under the control of the new, unlicensed operators, leading to a breakdown in the quality of care provided to residents. From when they took over in 2017 to when Saratoga Center closed in 2021, Scheinbaum and the other unlicensed operator mismanaged the nursing home’s finances and failed to adequately staff the facility, causing residents to suffer the consequences.

Scheinbaum and the other operators billed New York’s Medicaid program for services provided to the residents. The investigation revealed these were claims for worthless services and amounted to hundreds of thousands of dollars of fraudulent claims, James said.  

In 2018, both DOH and the Centers for Medicare & Medicaid Services (CMS) fined Saratoga Center for serious deficiencies and violations, and in 2019, CMS designated Saratoga Center a “Special Focus Facility,” signifying it was among the poorest performing nursing homes in the country. 

The parties to the settlement announced are Chaim Scheinbaum, Alliance NJ Care LLC, and Alliance HC II LLC, the entities through which Scheinbaum conducted business.