Van Duyn owners will pay millions to settle patient neglect, financial fraud claims

The owners of Van Duyn will pay $12 million to settle claims that they pocketed millions from taxpayers over more than a decade while leaving Central New Yorkers to suffer in one of the state’s largest nursing homes, New York Attorney General Letitia James said today.

As part of the settlement, Van Duyn Center for Rehabilitation and Nursing agreed to be overseen by two independent monitors approved by the state to supervise the home’s patient care and financial operations.

The owners will pay $2 million to the state’s Medicaid fund as restitution to taxpayers and $10 million to a Van Duyn fund for improvements recommended by the independent monitors, James said.

The settlement ends an eight-year battle between New York state and the owners of the 513-bed nursing home on Onondaga Hill, Efraim Steif and Uri Koenig.

See also: ‘We felt alone, helpless’: Van Duyn settlement promises more oversight of troubled nursing home

Over the years, syracuse.com | The Post-Standard reported about suspicious deaths, inadequate staffing and numerous complaints of neglect and abuse at the nursing home at 5075 West Seneca Turnpike.

A syracuse.com investigation found the nursing home’s staffers ignored, mistreated and forced out some of its frail population. Residents faced malnourishment for refusing to eat inedible food. Showers had only cold water for weeks.

At least five residents died, and 40 others were injured, because of neglect at Van Duyn, state officials said in court papers.

James said she agreed to the settlement with the nursing home owners because she did not believe their actions amounted to criminal behavior.

In legal documents detailing the settlement, Van Duyn’s owners did not admit to or deny the attorney general’s findings. Their lawyer did not respond to a request for comment.

Van Duyn has bounced on and off the list of the nation’s worst nursing homes three times in recent years. It last became a “special focus facility” candidate in February 2023 and has remained there.

The documented cases of neglect include a resident whose fall and subsequent death wasn’t discovered for hours, a woman who accidentally hanged herself after her nightgown got caught on a bathroom door handle, and two dementia residents who died after suffering dehydration and malnutrition.

The state Attorney General’s Office, through its Medicaid fraud unit, began investigating the nursing home in 2017.

The investigation found persistent neglect of patients that resulted in harm and death, insufficient staffing at the nursing home, and a diversion of millions of dollars of Medicaid and Medicaid money intended for resident care, according to court papers.

In 2023, the state said Van Duyn’s owners diverted $37.6 million from the nursing home instead of spending it to improve resident care.

“For years, residents at Van Duyn endured unacceptable neglect that caused traumatic injuries and tragic deaths,” James said. “We are holding Van Duyn’s owners accountable for these conditions, and ensuring the facility will make all the necessary changes so that its residents get the care they deserve.”

James announced the settlement in Syracuse this afternoon with local and state elected officials. Onondaga County owned and operated the nursing home for decades before selling it to Steif and Koenig in 2013.

The Attorney General’s Office said its investigation found Van Duyn’s residents lived in unsafe conditions – leading to injuries, hospitalizations and deaths – in a nursing home that was understaffed for years, before and after the Covid pandemic.

The state’s investigation found that after Steif and Koenig bought Van Duyn, the owners withdrew tens of millions of dollars by taking out a mortgage on the nursing home and charging it inflated rental payments.

Those rental payments were made using taxpayer money from Medicare and Medicaid from 2015 to 2022, the Attorney General’s office said, diverting money needed to adequately staff and maintain the nursing home

The state investigation found that Steif and Koenig transferred more than $2 million to themselves over the same period as salaries, even though some of it was for work they never performed.

Koenig and Steif had asked through their attorney in 2023 for immunity from criminal prosecution, but the Attorney General’s Office refused the request, according to the papers filed in Onondaga County Supreme Court.

Van Duyn is the largest of a group of 17 nursing homes that Steif and Koenig operate out of offices in a strip mall in Hillcrest, Rockland County.

Under terms of the Van Duyn settlement, David Hoffman & Associates, a health care consulting firm based in Philadelphia, will serve as the independent health care monitor to oversee improvements at the nursing home.

The state brought in the firm last year to oversee four other troubled nursing homes in New York operated by Centers Healthcare.

The accounting firm Bishop Muriel & Weirauch of East Islip will serve as the financial monitor at Van Duyn.

Hoffman & Associates will make recommendations that Van Duyn will be required to follow, including raises in staff pay and to make sure the nursing home is adequately staffed, according to the settlement.

Van Duyn’s owners will be subject to penalties of $5,000 per day if they fail to act on the recommendations in a timely manner.

Contact reporter Mark Weiner at 571-970-3751.