A Superior Court judge appointed an independent receiver on June 17 to manage the Deptford Center for Rehabilitation and Healthcare and Hammonton Center for Rehabilitation and Healthcare. This decision follows the Office of the State Comptroller’s (OSC) move to suspend the owners and facilities from New Jersey Medicaid.
The appointment grants the receiver full control over the finances and operations of both South Jersey nursing homes. The OSC's Medicaid Fraud Division had previously notified owners Kenneth Rozenberg, Beth Rozenberg, Daryl Hagler, and their entities of their suspension effective June 17, 2024, unless they completely dissociated from the facilities. This action was based on poor conditions at these facilities and evidence of significant Medicaid fraud in their New York operations.
Due to the receivership, OSC temporarily lifted the suspension pending the outcome of both the New York fraud case and OSC’s investigation or until a determination is made by the receiver regarding potential closure of the facilities. The Department of Health sought this court order as both centers rely heavily on Medicaid funding and would face severe financial difficulties if suspended.
The owners have indicated in court filings that they have identified a potential buyer for the facilities and consented to appointing a receiver. Until approval of this sale by the Department of Health, the receiver is authorized to take any necessary actions to conserve property and ensure residents' health, safety, and welfare. The court order also prevents owners from interfering with these responsibilities or liquidating assets.
Additionally, Hagler and the Rozenbergs agreed to voluntarily suspend their lab service companies from New Jersey Medicaid. In its January 25, 2024 suspension letter, OSC highlighted that Hammonton Center and Deptford Center had been repeatedly cited for serious health and safety violations affecting resident care. Both centers received low ratings from federal Centers for Medicare & Medicaid Services.
Hagler and the Rozenbergs were also accused of diverting $83 million from nursing homes funded by New York Medicaid and Medicare for personal enrichment. In July 2023, a New York State Supreme Court judge found credible evidence of "repeated and persistent fraud," leading to appointing financial and health monitors for their New York nursing homes.
“When there is evidence of fraud of this magnitude, and when there is a record of siphoning public funds and self-dealing, we have a duty to act," Acting State Comptroller Kevin Walsh stated. "To protect New Jersey Medicaid and its beneficiaries, we will stop disbursing funds to those involved in fraud."
