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Owner of Wilkinsburg nursing home involved in fraud scandal

| Monday, Dec. 13, 2010

The owner of a Wilkinsburg nursing home recently agreed to pay $1.1 million to his former employer to settle a lawsuit that claimed he approved dozens of fraudulent billings, including nearly $500,000 to pay for his Maryland home.

The settlement states Scott Colver agreed to repay $700,000 "in expenditures that were stolen" from Mid-Atlantic Health Care. He paid another $400,000 to settle claims that he had improperly diverted Mid-Atlantic business to his company.

As part of the deal, prosecutors in Worcester County, Md., dropped criminal larceny and embezzlement charges against Colver.

Colver owns Colonial Senior Living of Western Pennsylvania, which began operating the Village of Pennwood in Wilkinsburg about a year ago.

Bruce Baron, Colver's attorney, declined to answer questions about the settlement of the lawsuit filed in late 2008. Colver did not respond to a message seeking comment.

The settlement and the criminal charges were news to the Pennsylvania Department of Public Welfare, which issued an operating license to Colonial.

"We were not aware of it," department spokesman Michael Race said.

Race said the agency would immediately investigate the Maryland court proceedings. Pennsylvania law and regulations do not require licensed facility operators to notify the state unless there is a conviction for serious criminal charges, he noted.

Holli Senior, spokeswoman for the state Health Department, said the agency was not aware of the Maryland case.

Applicants for a nursing home license are asked to disclose whether a facility in which they were involved is the subject of an ongoing fraud investigation, Senior said. Colver's firm was granted its Pennsylvania nursing home license on Aug. 21, 2009, court records show.

Records of the Maryland civil suit show that Colver invoked the Fifth Amendment 88 times when he was deposed by an attorney for Mid-Atlantic on July 1.

Under questioning by Mid-Atlantic attorney Ellen B. Flynn, Colver refused to respond to questions about $460,745 in payments made by the Berlin Nursing and Rehabilitation Center to a company controlled by the man who sold Colver a house for $490,000 in 2005.

Colver invoked his right against self-incrimination when asked about another $227,366 in payments made to a company owned by the former property owner's girlfriend.

In the lawsuit, Mid-Atlantic charged Colver engaged in "elaborate and extensive fraud ... in order to covertly obtain hundreds of thousands of dollars in payment from his employer."

The suit charged that he even had the nursing home billed for landscaping services and the purchase of a washer and dryer for his personal residence.

In addition, Mid-Atlantic charged that Colver had "covertly" set up his company and was pirating business to his consulting business.

The settlement agreement, dated Aug. 6, was signed by Colver; his wife, Kathryn; and Scott Rifkin, the head of Mid-Atlantic.

Officials of the Maryland Board of Examiners of Nursing Home Administrators said they were aware of both the civil suit and the criminal charges, and that the matter was under investigation.

Records show Colver's license as a nursing home administrator was suspended in Virginia after he was charged with being abusive to a patient and then improperly discharging him. The license was restored in 1999. He does not have a nursing home administrator's license in Pennsylvania.

Colver's firm took over operation of the Village at Pennwood in 2009. Former owners of the facility filed for bankruptcy in 1999, and the property was sold to Westwood Operators.

The facility has 126 licensed nursing home beds and 22 personal care boarding home beds. Colonial, according to Colver's testimony, rents the facility from Westwood Acquisition Group.

Court records show several pending suits against current and former owners of Pennwood, filed by businesses including health service providers, food suppliers and a utility firm that claim they are owed thousands of dollars in unpaid bills.

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