CINCINNATI — Harold Sosna, a Blue Ash nursing residence operator who’s going through lawsuits from at the very least 4 totally different banks over losses associated to an alleged fraud scheme, obtained $10.Three million in Paycheck Safety Program loans and federal stimulus cash from the CARES Act for COVID-19 aid. The funds arrived lower than two months earlier than the primary fits have been filed.
The flurry of lawsuits started on June 1, accusing Premier Well being Care Administration, its CEO, Sosna, and eight Ohio nursing properties, together with seven within the Cincinnati space, of breach of contract and foreclosures; the plantiffs hoped to recoup tens of thousands and thousands of misplaced {dollars}. Different associated entities and stakeholders within the non-public family-owned firm are additionally named as defendants.
Common Electrical Credit score Union filed two of these lawsuits, each in search of foreclosures associated to a $16 million building loan to construct a brand new nursing residence within the village previously often called Amelia.
Two months earlier than GE Credit score Union filed these fits, it had accredited 10 PPP loans by way of the U.S. Small Enterprise Administration to assist the Premier household of nursing residence corporations, which had promised to save lots of 775 jobs.
“Premier had all its enterprise accounts at GE Credit score Union and went by way of them to get the PPP cash,” Sosna wrote in a press release to WCPO.
The Premier corporations obtained $6.Three million in PPP loans on April 18, in response to Sosna, who claims the credit score union later froze thousands and thousands of that cash to offset its personal monetary losses and took it away from nursing residence payroll.
“By way of May 22, Premier correctly used a complete of $2.65 million to fund the assorted payrolls and one other approximate $660,000 for hire and utility bills. Each penny was correctly accounted for,” he wrote. “In late May Common Electrical Credit score Union instantly froze all of the Premier accounts and grabbed the remaining $Three million in PPP cash and the HHS (Well being and Human Companies) stimulus cash and used it to offset Premier debt to GECU.”
Michael Galasso, legal professional for GE Credit score Union, declined to remark: “I don’t really feel it’s acceptable for my shopper to publicly deal with this matter at the moment.”
PPP loans might be forgiven if corporations present they spent at the very least 60% of loan proceeds on wages, commissions and different worker bills inside 24 weeks of receiving the loan.
Banks that approve PPP loans, like GE Credit score Union, acquire federal {dollars} as charges: 1% on loan quantities over $2 million, 3% on loans between $350,000 to $2 million, and 5% on loans under $350,000.
This graphic reveals the PPP loans accredited for the Premier household of corporations.
Sosna accused Common Electrical Credit score Union of freezing the PPP loan cash, which brought on paychecks to bounce, workers to give up and “patient care to be impacted.”
“This was clearly not the intended use of these funds when enacted by Congress,” Sosna wrote. “With all accounts frozen, Premier was unable to access any money, including the PPP money, in order to make payroll.”
Hamilton County Court docket of Frequent Pleas judges have appointed three separate receivers as custodians of the Premier nursing properties. Receivers are tasked with working each day operations and advertising the services on the market.
Sosna can be making critical accusations towards a type of receivers: SAK Administration Ohio, which Decide Jody Luebbers appointed on June Three to handle six services the place 375 residents stay. The services are Beechwood Terrace, Kenwood Terrace Well being Care Middle, Ivy Woods Care Middle, Madeira Well being Care Middle, Nice Ridge Care Middle and Southbrook Well being Care Middle in Springfield.
When SAK took over the properties, Sosna mentioned it refused to pay excellent payments owed to distributors, so “facilities were left scrambling to feed their patients, scrounging for medical supplies, while working extremely short because staffing agencies were refusing to send help.”
Suzanne Koenig, president and founding father of SAK, wrote in a press release to WCPO that, as court-appointed receiver, her agency is the one entity licensed to talk on behalf of Premier Well being Care, noting that the group severed ties with Sosna on June 2.
“SAK Management-Ohio categorically and emphatically denies allegations made by Mr. Harold Sosna,” Koenig wrote. “Residents … are nicely cared for by devoted workers who’ve a protracted historical past with these residents. All post-receivership bills are being paid well timed.
“We’ve got applied a powerful an infection prevention and high quality management program as we work to maintain our residents and workers protected against COVID-19,” Koenig continued. “Facilities have all necessary personal protective equipment, food, medicine, and other supplies to provide for the day-to-day needs of all individuals in our care. Our vibrant homes are running well with operational improvements underway.”
The decide appointed SAK after an legal professional for Huntington Bank, which can be suing the Premier corporations, raised considerations that the nursing properties have been in imminent hazard of collapse as a result of property have been frozen as a part of the courtroom battle.
However Sosna maintains that, seven weeks into its receivership, SAK continues to be having issues “performing basic tasks like paying bills.”
“Nursing facilities are required to maintain resident trust accounts for their patients so that they can access money for personal expenses not covered by Medicaid. Residents are not able to access those funds,” Sosna wrote. “Even seemingly simple tasks like replenishing petty cash and activity funds at the facilities has proven to be extraordinarily challenging for SAK.”
As a result of many key nursing residence workers have give up, Sosna claims that “patient care has to be impacted. Management is stretched dangerously thin.”
On the coronary heart of this courtroom battle over nursing residence property is an alleged fraud scheme.
“This case is about a multi-million-dollar fraudulent scheme … which has defrauded S&T Bank out of nearly $60 million” by way of bogus checks and manipulating bank accounts, attorneys for the Pennsylvania-based neighborhood bank wrote in a lawsuit filed June 1.
Attorneys for Huntington, First Monetary and S&T Bank, who’ve all filed lawsuits, both declined to remark or didn’t reply to requests for remark.
Two banks are additionally preventing over the remaining cash from some nursing residence accounts. S&T Bank added First Monetary as a defendant to its lawsuit on June 8, accusing the bank of wrongfully retaining the “absconded funds,” and asking a decide for an injunction freezing the cash.
“There may be merely no grounds for S&T to push the rest of its losses on to First Monetary Bank,” wrote Susan Argo, an legal professional for First Monetary. “First Financial Bank, like S&T, has lost an extraordinary amount of money as a result of the Premier defendants’ check kiting scheme.”
Test-kiting is the unlawful act of writing a test with out having funds in a bank account.
No legal fees have been filed on this case.
