TRENTON, NJ – A shocking state investigation has uncovered what officials call an “egregious and deliberate” scheme in which the owners of two South Jersey nursing homes allegedly siphoned tens of millions of Medicaid dollars into their own pockets while leaving residents to suffer in dangerous and inhumane conditions.
According to a report released previously by the Office of the State Comptroller (OSC), Daryl Hagler and Kenneth Rozenberg, who own Hammonton Center for Rehabilitation and Healthcare and Deptford Center for Rehabilitation and Healthcare, used a web of shell companies, inflated rents, and fraudulent loans to divert more than $92 million from Medicaid between 2019 and mid-2024.
Hagler and Rozenberg were able to move money off the nursing homes’ books and into their bank accounts using a network of interrelated companies they owned and controlled, including:
· A Bronx, New York-based company called Centers for Care, LLC (Centers), owned by Hagler and Rozenberg;
· Two property companies that own the buildings and real estate for Hammonton and Deptford, owned by Rozenberg and M&J Klein Family Enterprises, LLC (KFE);
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· A business consulting company owned by Hagler; Rozenberg; Rozenberg’s wife, Beth Rozenberg; Rozenberg’s daughter, Shoshana Rozenberg Areman; and Rozenberg’s son, Eli Rozenberg;
· An information technology company owned by Hagler and his son, Jonathan Hagler;
· A staffing company owned by Hagler; Rozenberg; Rozenberg’s daughter, Shoshona Rozenberg Areman; Hagler’s son, Jonathan Hagler; Amir Abramchik, Centers’ Chief Operating Officer; and Abramchik’s wife, Deborah Abramchik;
· Another staffing company owned by Rozenberg’s daughter, and Elisabeth Farkas, Rozenberg’s daughter-in-law;
· A building maintenance and construction company owned in part by Hagler; and
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· Clinical laboratories owned by Rozenberg and his wife, Beth Rozenberg.
OSC investigators said the pair funneled about $27.8 million directly into Rozenberg and his company Klein Family Enterprises’ (KFE) bank accounts, while another $7.8 million in public funds was misused to finance their purchase of the homes themselves. All told, the report says Hagler, Rozenberg, and their affiliated businesses owe New Jersey nearly $124 million, including $87 million in penalties tied to “pervasive and egregious” violations of state staffing laws.
Horrific conditions inside Hammonton and Deptford homes
The Comptroller’s report details years of neglect that stemmed from chronic understaffing and severe cost-cutting. Both facilities failed to meet minimum staffing levels on all but two of the 146 days reviewed. Residents were found sitting in their own waste, calling out in pain for hours without help, and left malnourished or injured due to neglect.For the five-and-a-half-year period OSC reviewed, Hagler and Rozenberg moved $92 million through these companies, which is more than two-thirds of the $134.8 million they received in Medicaid funding from New Jersey. Because the risk of self-dealing is so great when related parties are involved, state and federal law limit how much related parties can be paid and requires disclosure of costs and profits. Hagler and Rozenberg were required by law to report how much they paid to companies they and their family members own. But they intentionally hid these transactions, reporting just $882,666 of the $92 million – less than 1 percent – to the state and federal governments. This was not a simple error; Hagler himself signed the false cost reports.
By hiding what they paid themselves through their related entities, Hagler and Rozenberg hid the outrageous deals they made with themselves from the government. The most lucrative scams stemmed from the mortgages and rent payments, and they were made possible by the legal separation of the nursing home operations from the nursing home properties.
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Hagler and Rozenberg bundled the purchase of both the operating companies and the properties into mortgages worth $63.2 million. The property companies then increased the rent charged to the operating companies to cover the mortgage payments. This scheme allowed Hagler and Rozenberg to purchase and own the nursing homes for nearly nothing, a mere 1.5 percent deposit. To avoid showing a profit, Hagler and Rozenberg on cost reports falsely labeled the mortgage payments as all rent, thus concealing the fact that $7.8 million paid toward the rent during the period OSC reviewed was for what should have been Hagler’s and Rozenberg’s private business loans.
They also used rent payments to move extraordinary amounts of money off the nursing homes’ books. Above and beyond the rent payments that paid for the mortgage principal, taxes, maintenance, and reserves, Hagler and Rozenberg paid Rozenberg’s property companies, in just five-and-a-half years, $27.8 million in duplicative and unnecessary “additional rent” payments. Those “additional rent” payments, according to the lease, were supposed to cover the property taxes, insurance, maintenance, and reserves—but those costs were already included in the base mortgage payments. So instead, $27.8 million in duplicative payments were distributed directly to Rozenberg and KFE, the other owner of the property companies.
Hagler and Rozenberg managed Hammonton and Deptford to reap grossly excessive profits for themselves while grievously harming the residents who lived in the facilities. They built a business that systematically redirected public funds intended for resident care to their own and their family members’ bank accounts.
Among the most disturbing incidents: two residents of Hammonton were sexually assaulted, and a Deptford resident—who was supposed to receive a pureed diet—was served solid food and died from choking. Another disabled resident was discharged to a motel that could not accommodate his wheelchair and later abandoned outside a social services office before it opened.
From 2019 to 2024, police logged more than 3,400 emergency calls to the two nursing homes. Federal health authorities repeatedly labeled both as “special focus facilities,” a designation reserved for the most troubled nursing homes in the nation.
Complex fraud hidden behind real estate and loan schemes
OSC investigators said Hagler and Rozenberg concealed their self-dealing through nine “related entities” they or their relatives owned. Many of these businesses had no contracts or invoices on file, and state auditors found large sums with no documentation at all.
The men also allegedly inflated property costs and passed them on as rent, doubling Hammonton’s annual rent to $2.2 million and Deptford’s to $2.3 million after a refinance—amounts OSC determined were wildly above market value. They used the same nursing home funds to pay interest on two unnecessary $15 million promissory notes, costing the facilities nearly half a million dollars a year each in interest.
State steps in with receivership and Medicaid suspension
Following the findings, OSC suspended Hagler, Rozenberg, KFE, and related entities from participating in New Jersey’s Medicaid program. The Department of Health has since appointed an independent receiver to oversee operations at both facilities to protect residents.
Acting State Comptroller Kevin Walsh condemned the conduct, saying, “Vulnerable people suffered unnecessarily because the owners decided to put the money in their pockets instead of paying for the staff to care for them.”
Key facts:
- OSC says owners diverted $92 million in Medicaid funds from two NJ nursing homes
- Conditions included severe neglect, two sexual assaults, and one death
- State seeking $123.9 million in repayments and penalties; facilities now under state control
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