TRENTON, NJ – The New Jersey Office of the State Comptroller (OSC) has filed a sweeping lawsuit against the owners of two South Jersey nursing homes, accusing them of diverting tens of millions in Medicaid funds, while also moving to cut off state funding for a third troubled facility in Bridgeton.
On January 19, OSC announced it had sued the operators and associates behind the Hammonton Center for Rehabilitation and Healthcare and the Deptford Center for Rehabilitation and Healthcare, seeking to recover $124 million in misspent Medicaid funds. The suit, filed in Mercer County Superior Court, names 33 defendants, including owners Daryl Hagler and Kenneth Rozenberg, their relatives, and multiple related business entities.
According to OSC’s Medicaid Fraud Division, Hagler and Rozenberg orchestrated a multi-year scheme using “complex and improper real estate deals, excessive loans, inflated rents, and undisclosed fees” to conceal profits while neglecting patient care. Investigators reported hazardous conditions, including two resident sexual assaults, one death, and thousands of 911 calls over several years.
“Medicaid funds must be used to care for residents, not to enrich owners and their families and associates,” said Acting State Comptroller Kevin Walsh. “OSC takes these enforcement actions to ensure accountability and protect the integrity of the Medicaid program.”
The lawsuit follows a December 2025 investigative report that detailed “extreme financial malfeasance” and systemic neglect at both Hammonton and Deptford facilities. Hagler and Rozenberg, who have ties to dozens of nursing homes across multiple states, allegedly concealed profits through nine related entities owned by themselves or family members.
In a separate action, OSC also issued a final notice to South Jersey Extended Care (SJEC) in Bridgeton, notifying its court-appointed receiver that the state will terminate Medicaid funding effective March 13, 2026. The agency said the facility’s owner, Mordechay Weisz, and operator, Shlomo Fogel, were unfit to continue in the Medicaid program due to “an unacceptably high risk of fraud, waste, and abuse.”
OSC previously denied a proposed ownership transfer to Bridgeton SNF, LLC, citing undisclosed financial ties to Weisz and a “pattern of concealment” through “layers of trusts and LLCs.”
“Continuing the status quo indefinitely is not tenable,” OSC wrote in its January 7 letter to the receiver. “Maintaining this status quo creates unacceptable risk, both financial and otherwise, to the Medicaid program.”
The combined actions mark one of the state’s most aggressive crackdowns on Medicaid abuse in long-term care facilities, reflecting mounting concerns over patient safety and financial accountability in New Jersey’s nursing home industry.
New Jersey’s State Comptroller has filed suit over alleged $124 million in Medicaid fraud at Hammonton and Deptford nursing homes and will end Medicaid funding for Bridgeton’s South Jersey Extended Care in March.