An investigation by the Office of the State Comptroller (OSC) has revealed that South Jersey Extended Care (SJEC), a for-profit nursing home in Bridgeton, New Jersey, improperly diverted millions of Medicaid dollars. The funds were funneled into personal businesses and charities by those controlling the facility, according to OSC's report.
The nursing home is officially owned by Mordechay “Mark” Weisz but was actually under the control of his cousin Michael Konig and Konig’s brother-in-law Steven Krausman. From April 2018 to March 2023, they managed SJEC’s finances and operations. Acting State Comptroller Kevin Walsh stated, “This was a massive scam, perpetrated for years.”
The OSC report details how SJEC received $35.6 million in Medicaid funds while paying $38.9 million to businesses owned by Konig and Krausman. This arrangement allowed them to charge inflated prices without scrutiny due to Weisz being listed as the owner.
Attorney General Matthew J. Platkin announced suspensions from New Jersey Medicaid for those involved, including related entities and partners. He emphasized the need for action to protect residents and address these issues.
The investigation reviewed numerous documents and interviews with Weisz, Konig, and Krausman. It found that conditions at SJEC were substandard, with frequent health and safety violations documented in inspection reports.
Konig’s past included bans from owning nursing homes in Massachusetts and Connecticut due to severe deficiencies at facilities he controlled there. This history adds context to the current findings in New Jersey.
Financial mismanagement led SJEC from $1.5 million in assets in 2018 to just $171,913 by 2022 while liabilities increased significantly during this period.
During the review period, ten nursing homes were managed or serviced by businesses controlled by Krausman and Konig, yielding profits of $45.5 million from these facilities despite low ratings like SJEC's one-star status.
Medical records at SJEC were disorganized, lacking crucial documentation on residents' care needs.
Nine other New Jersey nursing homes also engaged with companies controlled by Krausman and Konig at inflated costs, further illustrating financial irregularities across multiple facilities.
OSC continues its investigation and may pursue recovery actions or penalties against those involved while coordinating with relevant state departments to ensure resident care remains a priority.
“Our report lays bare in great detail how unscrupulous nursing home operators are able to exploit weaknesses in the system,” said Walsh about ensuring future protections against such exploitation.
