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A.G. Schneiderman Announces Settlement With Allure Group To Revitalize Harlem Nursing Home, Fill Healthcare Gaps In Brooklyn And Lower East Side

Settlement Requires Allure to Make Major Improvements to Greater Harlem Nursing Home, Open New Healthcare Facilities in Brooklyn and Lower East Side, Pay Additional $1.25 Million for Lower East Side Non-Profits

Also Puts in Place Measures to Ensure Processes that Led to Closure of Rivington House and CABS Will Not Happen Again

Allure Will Also Pay $750,000 in Penalties and Costs to the State; Rivington House Board Members Barred from New Charities Boards for Five Years

Attorney General Eric T. Schneiderman recently announced a comprehensive settlement with the Allure Group to revitalize the Greater Harlem Nursing Home and replace healthcare gaps in Brooklyn and the Lower East Side. The agreement results from the Attorney General’s investigations into the closings of two nursing homes, Rivington House - The Nicholas A. Rango Health Care Facility on the Lower East Side, and the CABS Nursing Home in Brooklyn. As part of the settlement, the Attorney General required new measures to fully reform the processes that led to the closure of Rivington House and CABS Nursing Home. Allure will also pay $750,000 in penalties and costs to the State, in addition to $1.25 million to Lower East Side healthcare non-profits.

“The processes that led to the closure of Rivington House and CABS never should have happened – this settlement ensures they won’t happen again, while addressing critical healthcare gaps in the impacted communities,” said Attorney General Schneiderman. “We’re requiring Allure to open new healthcare facilities in Brooklyn and the Lower East Side, and make major improvements to its Harlem facility, while also providing $1.25 million to non-profits serving vulnerable New Yorkers.”

The settlement resolves an investigation by the Attorney General’s office into the closure of two facilities that had been sold by non-profit nursing home operators to the Allure Group and its principals, who own and manage a group of nursing homes in New York City. In each case, the facilities were closed shortly thereafter with minimal notice to the affected communities. While such closures were taking place, the Allure Group was managing the Greater Harlem Nursing Home as a Receiver; the non-profit owner of the Greater Harlem Nursing Home is now petitioning the Court to sell its facility to Allure-related companies.

The settlement ensures that the Greater Harlem Nursing Home, a 200-bed critical facility on West 130th Street in Manhattan, will receive substantial improvements through investments by its Receiver, the Allure Group, and imposes a restriction on the future sale or closure of the facility as a skilled nursing facility for at least nine years.

The Allure Group will also create a Lower East Side healthcare facility at a new location to fill healthcare gaps caused by the closure of Rivington House. Allure is required to fully fund a new skilled nursing facility or other healthcare facility primarily providing long-term care to the elderly or disabled; there will be a restriction on the future sale or closure of that facility for at least eight years from commencement of services. Pursuant to the agreement, Allure will also pay $1.25 million to Lower East Side non-profit organizations that provide healthcare services to vulnerable members of the community.

This settlement also requires Allure to open a new Central Brooklyn healthcare facility to offset lost healthcare services resulting from the closing of the CABS Nursing Home. The Central Brooklyn facility will also be subject to a restriction on the future sale or closure for at least eight years from commencement of services.

In a related settlement, three directors of the Rivington House charitable board – which the Attorney General found to have not met its duties under State law – will be barred from new charities boards for at least five years and Allure will pay $400,000 in penalties under the Not-for-Profit Corporation Law. Allure will also pay $350,000 to cover investigative costs.

The Attorney General required additional mechanisms to ensure that the processes that led to the closure of Rivington House and CABS will not happen again. A new independent compliance consultant will report to the New York State Department of Health, and Allure will be required to inform the Department of Health about circumstances that might lead to the closure of any Allure Group facility.

Click here to read the settlement documents.

The Attorney General thanks the New York State Department of Health and the New York City Department of Investigation for their assistance in the investigation.

The settlements were handled by Assistant Deputy Attorney General Paul J. Mahoney and Assistant Attorney General Sean Courtney. Assistant Attorneys General Linda Heinberg and Emily Stern represented the State in New York charities law proceedings. Assistant Attorneys General Thomas O’Hanlon, Konrad Payne, Steven Shiffman, and Brian Weinberg directed an investigation by Senior Investigator Thomas Dowd, Supervising Investigator Dominick DiGennaro, Principal Auditor-Investigator Milan Shah, Senior Auditor-Investigator Shoma Howard, and Deputy Regional Chief Auditor Jonathan Romano of the Medicaid Fraud Control Unit (MFCU) and Charities Bureau Chief Accountant Judith Welsh-Liebross. James G. Sheehan is Chief of the Charities Bureau in the Division of Social Justice, led by Chief Deputy Attorney General Alvin Bragg. Amy Held is Director of MFCU in the Division of Criminal Justice, led by Executive Deputy Attorney General Margaret Garnett.