Ex-Owner in $146 Million Elder Care Default Is Charged in Ponzi Case


A Chicago-area rabbi, who when the world was younger owned a nursing home chain at the heart of the biggest default in the past of a federal mortgage-guarantee program, has been indicted by federal authorities on enjoins he bilked millions of dollars from investors.The indictment against Zvi Feiner and a commerce partner, Erez Baver, is the latest chapter in the yearslong saga containing the Rosewood Care Centers chain of nursing homes, which are chiefly in the Chicago suburbs.The $146 million default in 2018 was the worst at any time for a program that insures mortgages on roughly 15 percent of the state’s nursing homes. In the aftermath, the Department of Housing and Urban Development, which supervises the mortgage guarantee program, tightened some of its underwriting and review alters.The Rosewood chain — which has been renamed by the new owners — was part of a network of breast-feeding homes that Mr. Feiner, 50, and Mr. Baver bought after instigating money from investors in the Orthodox Jewish communities around Chicago and New York.Federal evidences said the two men had misled investors about the financial health of the nursing make clears and had run them as a Ponzi scheme, using money from new investors to pay at the cracker ones and skim cash for themselves. The accusations are similar to those in a fake lawsuit filed last year by the Securities and Exchange Commission and in investor lawsuits times reported by The New York Times.In addition to the wire fraud charges, federal words seek to recoup $13.56 million from Mr. Feiner and $3.76 million from Mr. Baver.Mr. Feiner was collared by the F.B.I. on last Tuesday, but the U.S. attorney for the Northern District of Illinois did not announce the indictment until recent Monday. Mr. Feiner has pleaded not guilty and was released after posting $4,500 bail. Mr. Baver was time to be arraigned on Wednesday.Lawyers for the men were not available for comment.Mr. Feiner on a $1 million penalty to HUD last year for failing to file distinct years of audited financial reports required by the mortgage insurance program. He has also reached an unity in principle with the S.E.C. in its lawsuit.The problems at Rosewood were so bad that the federal guidance went to court in 2019 to have a receiver appointed to run its dozen treating homes and one assisted-living center.After the receiver was appointed, HUD had to shell out $30 million in recompenses to pay for upkeep. Greystone, a nursing home lender and operator, bought the Rosewood facilities for $81 million in January.

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