Jury begins deliberating in Western Pa. federal nursing home fraud case

Federal prosecutors said the criminal case against two nursing care facilities and five people who worked there is about lies and greed.

“It’s not complicated,” said Assistant U.S. Attorney Karen Gal-Or. “It’s very simple. The defendants lied. They lied about patients … just to squeeze as much money as possible out of every one of those residents.”

But defense attorneys said the prosecution’s witnesses lied in a case that never should have been brought.

“They’ve convinced themselves someone is guilty,” said J. Kirk Ogrosky, who represents the nursing homes’ owner and CEO, Sam Halper. “The evidence is just replete with lies that the government and FBI put before you.”

Halper faces charges, along with Brighton Rehabilitation and Wellness Center in Beaver County; Mt. Lebanon Rehabilitation and Wellness Center; Eva Hamilton of Beaver, who served as the director of nursing at Brighton; Michelle Romeo of Hillsville, Lawrence County, who was a regional manager with oversight over nurses at the two facilities; Director of Social Services Johnna Haller of Monaca; and former Mt. Lebanon Rehab administrator Susan Gilbert of Cecil.

The government alleged two criminal schemes in the case. One involved the falsification of documents to make it appear the nursing homes were meeting government-mandated staffing requirements. The other involved changing patient depression scores, therapy recommendations and discharge dates to increase reimbursement rates from Medicare and Medicaid.

Charges include conspiracy to defraud, falsifying health care records and falsification in a federal investigation. The trial began Nov. 16 before U.S. District Judge Robert J. Colville and included 29 government witnesses.

Following more than 10 hours of closing arguments Wednesday and Thursday by eight attorneys, the jury began deliberating Thursday afternoon.

Assistant U.S. Attorney Jacqueline C. Brown told the jury Wednesday that the defendants prioritized profits over patients.

“Halper never saw the patients as people,” she said. “He saw them as dollar signs.”

Halper knew the facilities didn’t have enough staff, but was constantly pushing to have more and more patients admitted, Brown said.

“‘Fill ‘er up,’” he’d tell his staff, according to Brown.

Brown said the licensed staff dropped 58% after Halper bought Brighton Rehab.

When nursing home administrators realized their Patient Per Day staffing rates would not meet Pennsylvania Department of Health standards, they wrote down the names of employees who did not work the shift attributed to them to avoid being cited by the state.

“These names are lies,” Brown said. “They are not mistakes. These defendants lied again and again.”

Brown recounted testimony that the staff at the facilities would delay patient discharge dates to earn more money and increase depression ratings to receive higher reimbursements.

She called it “fraud on a massive scale.”

After the government concluded its closing argument Wednesday, Ogrosky accused Brown of lying to the jury when she said his client would not approve new hires.

“That’s a lie,” Ogrosky said. “She got up here in closing arguments and told you something she knew was not true.”

Later, he added, “There are facts that have come out in this courtroom that you could convict them (the government) for being dishonest.”

His remarks prompted an objection from the government and an instruction to the jury by the judge.

“Personal comments about opposing counsel are not appropriate,” Colville told the panel. “You should completely disregard those statements. I’m striking them. You should give them no weight whatsoever.”

But Ogrosky told the jurors that the entire prosecution was built on confirmation bias and Halper was wrongly charged.

“You shouldn’t have had to sit here the last month,” he said. “For 3½ years, they’ve done everything in their power to get a conviction where no crime has occurred.”

The defense painted the 20 nursing home employees who testified in the case as all having a bias against their clients. Some were fired. Some quit. Some were offered immunity in exchange for their testimony.

“They put people on (the witness stand) and got them to say what they wanted them to say,” Ogrosky said.

The staffing situation, Ogrosky said, was a regulatory issue that the government turned into a federal conspiracy.

Romeo’s defense attorney, Beth Moskow-Schnoll, told the jurors in her closing that there was no evidence of any conspiracy and that the government presented no evidence that Comprehensive Healthcare Management Services received any additional money because of the alleged fraud.

“This is just a big nothing. It doesn’t amount to health care fraud,” she said.

As Hamilton’s defense attorney, Paul E. Pelletier, began his closing, he displayed two images side by side on the screens in front of the jury.

One was Bugs Bunny, seemingly representing his client. The other, Elmer Fudd.

Then, in the next image, the wayward hunter who never seemed to catch his prey had donned an FBI hat and jacket.

“Elmer Fudd was that fumbling, bumbling knucklehead,” Pelletier said, adding the image represented the investigators in the case.

Pelletier told the jury that Medicare never lost any money over the alleged staffing violations.

“Why are we even here if there’s no impact on federal law?” he asked.

Pelletier said the government was “desperate” to charge someone.

In her closing, Catherine Recker, who represents Haller, said to earn a conviction against her client, the government has to prove intent to defraud and that she acted willfully. Haller is accused of changing patients’ scores on a depression screening tool to get increased reimbursements.

“She did not lie to make these residents look sicker,” Recker said. “They were already sick to begin with.”

The changes Haller made were all documented and tracked, and her client had no incentive to commit fraud, Recker said.

Recker also addressed the seemingly small amount of evidence against her client.

There were 56,000 patient assessments during the relevant time period, Recker said. The government talked about just 34 of them.

“It’s not even 1%. Microscopic. It proves nothing,” she said.

Other defense attorneys noted that the prosecution also produced only small numbers of violations related to staffing — 31 shifts over two years that were found to be short-staffed.

At Mt. Lebanon alone, attorney Jonathan Meltz said, there are 16,800 staff shifts each year.

Meltz, who represents Gilbert, said his client self-reported when the facility was short of staffing requirements.

If the paperwork was falsified, Meltz said, Gilbert didn’t know.

“Susan didn’t know the staffing sheets were false. She trusted her employees to tell the truth,” he said.

Colin Callahan, who represents the two nursing facilities, said the government did not meet its burden to prove that his clients — or any of the defendants — were guilty beyond a reasonable doubt.

“It’s not against the law to try to run a profitable business,” he said.

In her rebuttal Thursday, Gal-Or said, “It’s not criminal to make money. What is a crime is lying to government regulators to turn a profit.”

At Brighton Rehab, Brown said, Halper turned a profit of more than $3.7 million from 2018 to 2020.