The US Nursing Home Travesty of Justice, Financial Fraud, Patient Abuse, Government Neglect and Liability and the Profiteers who Profit From it all

The Rosewood Care Center in Inverness, Ill., was backed by a program run by the Department of Housing and Urban Development that insures loans to more than 2,300 nursing homes across the country. CreditCreditDanielle Scruggs for The New York Times

$146 Million Default by Nursing Home Chain Leaves U.S. on the Hook

The cracks in the foundation of a Chicago nursing-home business began to appear almost immediately.

The owners stopped making mortgage payments on their crown jewel, the Rosewood Care Centers, barely a year after buying it in 2013. Paperwork about the chain’s finances was never filed with the government. Some money meant for the 13 nursing homes and assisted-living facilities went to prop up another investment.

In the end, the business defaulted last year on $146 million in government-backed mortgages — the biggest collapse in the history of a little-known loan-guarantee program run by the Department of Housing and Urban Development.

The Rosewood debacle demonstrates the problems plaguing the HUD program, which helps nursing homes obtain affordable loans and has become a linchpin of the American elder-care system.

By the government’s own admission, the federal agency’s stewardship of the program has been haphazard. Its oversight of nursing homes has been weak. When HUD officials have spotted problems, they often have been slow to respond. Sometimes it has taken years to intervene, allowing the finances at certain facilities to unravel to such an extent that the quality of care was undermined.

HUD officials described Rosewood as an outlier, saying that only 1 percent of the guaranteed loans end up defaulting. “Mortgage defaults in this program are exceedingly rare, yet reaching an acceptable resolution requires an owner’s willingness and ability to work on behalf of their residents,” the department said in a statement.

But the program — run by a department better known for fostering affordable housing — is a vulnerability for the federal agency. The nursing home industry is increasingly being run by for-profit operators facing dwindling margins. Some homes — especially those in rural areas — are struggling to stay open, with operators blaming low occupancy and insufficient payments from Medicaid and Medicare.

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Black Elk and the Bond Proceeds – Another Platinum Bait-and-Switch

Law360, New York (May 30, 2019, 9:59 PM EDT) — Jurors in the securities fraud trial of former top Platinum Partners executives on Thursday heard of how co-founder Mark Nordlicht floated plans to wield control over bonds of the hedge fund’s portfolio company Black Elk Offshore Operations LLC using Platinum affiliates, which prosecutors say was part of a scheme to defraud the oil and gas driller’s bondholders.

Prosecutors say Nordlicht, former Platinum co-chief investment officer David Levy and others used their secret sway over the majority of $150 million in Black Elk bonds to funnel the bulk of proceeds from a sale of the company’s assets back to Platinum, ahead of bondholders who had priority to the funds.

During the testimony of Black Elk’s former outside counsel at BakerHostetler, W. Robert Shearer, the jury heard of how a group of independent bondholders in late 2013 were threatening to push the bonds into default after Black Elk violated the indenture’s terms by exceeding its limits on capital expenditures.

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A Platinum Response – Fear Would Prevent Reporting, The Nordlicht Hedge

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Law360, New York (May 28, 2019, 8:15 PM EDT) — A former chief financial officer for Platinum Partners on Tuesday told a New York federal jury that Platinum co-founder Mark Nordlicht told him that “mutually assured destruction” would keep aggrieved investors from ratting the hedge fund manager out to regulators, despite Platinum’s inability to make timely repayments.

Daniel Mandelbaum, who was Platinum’s CFO for about 9 1/2 months in 2014 and 2015, said he spoke to Nordlicht amid a liquidity crisis that year at Platinum’s signature fund, Platinum Partners Value Arbitrage Fund.

Mandelbaum testified that he was protesting Platinum’s practice of preferentially repaying certain investors — including insiders and those with large stakes in PPVA — ahead of other investors who had outstanding redemption requests.

Nordlicht, however, told Mandelbaum at a meeting in Nordlicht’s office that investors wouldn’t complain to the Securities and Exchange Commission, since if the regulator got involved, PPVA would be shut down and its assets sold at fire sale prices, Mandelbaum testified.

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How to Stop Scammers – from the Eyes of the Orthodox – The Yeshiva World Analysis, Interesting Read

“Sadly, immoral individuals have often applied the following 5 step method to ripping off substantial funds from members of our community for years.
  1. Give a large donation to an institution with a wealthy donor base. Do so magnanimously and genuinely try to help out that institution – showing that it is dear to your heart.
  2. Come up with a false, but effective sounding business plan or investment strategy, and casually talk about it to wealthy individuals.
  3. Name drop big company names and or people that have signed on and show false paper work that “proves” the whole scam.
  4. Take investment money from others and, at the outset, pay a hefty return on profits. Do so from other moneys that you are receiving.
  5. Give a significant donation to the cause where a well-liked Rabbinic leader stands behind the institution and develop a relationship with him. You will need to use this relationship in order to attempt to influence him or others around him into helping defend you against those people who realize that you have stolen their money.  Articles in the Jewish media can be squashed.  This will also help you gain more people in which to obtain more money from.
The above, is not a cynical view of the world.  It is, unfortunately, a scenario that has been repeated numerous times.  It is more prevalent than it should be, in this author’s view, because people are almost entirely unaware of a Torah obligation that is incumbent upon all of us.”

PREVENTING PONZI SCHEMERS

Yes, there is a Torah obligation upon all of us to prevent the proliferation of Ponzi schemers and rip-offs within our community.  It is called the obligation to be “chas al mammon yisroel” – a fulfillment of the Torah Mitzvah of “v’ahavata larayacha kamocha.”

The Gemorah in Moed Katan 27b tells us that when Jews were burying their dead in the finest clothing, Rabban Gamliel HaZakain arose and declared that enough was enough. The rising pressures, the “keeping up with the Joneses” in how to dress the deceased was causing enormous economic pressure on the living. “It must stop,” declared the rabbi, and the tachrichim, burial shrouds, we now use became the norm.

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Deed theft, Brooklyn, NY, 80-Year Old Woman and a Myriad of Fraudulent Companies

$1M Bed-Stuy brownstone stolen from 80-year-old woman, DA says

May 22, 2019 Ned Berke

260 Clifton Place has been empty since a 2010 fire. Photo via Google Maps

Two alleged fraudsters swindled an 80-year-old woman out of her Bedford-Stuyvesant brownstone valued at more than $1 million in the borough’s latest case of deed fraud, according to the district attorney.

Craig Hecht, of Long Island, and another unnamed suspect set up a convoluted scheme involving dummy corporations and falsified documents in order to steal the brownstone at 260 Clifton Place. Though the victim lived in the neighborhood for more than three decades, the property has been vacant since a 2010 fire.

“This defendant allegedly thought he could take advantage of an elderly homeowner’s absence to steal her house and sell it before she or anyone else noticed,” Brooklyn District Attorney Eric Gonzalez said in a statement.

Hecht and the other defendant allegedly created two companies reflecting the victim’s name in 2015then filed documents with the city indicating a transfer of the home to a third company, TDA Development, which they also controlled.

Hecht allegedly began shopping the property around to would-be buyers, and in November 2015 sold it from TDA to a buyer for $850,000. According to the district attorney, the defendants distributed the money through multiple accounts, with some sent offshore to Greece and more than $250,000 landing in an account owned by Hecht’s wife.

When the new owners of the home began construction on the property, a neighbor informed the real owner, who notified the district attorney’s office.

Hecht was charged with two counts of second-degree grand larceny and two counts of second-degree money laundering, and faces up to 15 years if convicted. The co-defendant has not been apprehended.

In March, lawmakers and housing advocates warned at a hearing organized by Brooklyn Borough President Eric Adams that Brooklyn is facing an emerging crisis in housing theft cases, including deed fraud.

 

 

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A Platinum Settlement with Obex – from Law360

Law360, London (May 20, 2019, 2:42 PM BST) — ED&F Man Capital Markets has settled its case accusing a New York investment firm of knowingly setting the global brokerage up with failing hedge fund Platinum Partners, which lost ED&F approximately $3 million.

ED&F has reached a confidential settlement with U.S.-based Obex Securities LLC, Deputy Master Hansen said in an order published Wednesday. The capital markets unit had alleged that Obex knew that investment company Platinum Partners was insolvent when introducing it to ED&F as a customer in 2015, but pursued the deal for the introduction fee anyway.

“All further proceedings in this action be stayed upon the terms set out in the … settlement agreement between the parties,” the judge said in the consent order, adding that the parties had reached a settlement on April 23.

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