An investigation finds the owners of Hammonton Center for Rehabilitation and Healthcare and Deptford Center for Rehabilitation and Healthcare carried out an extensive years-long scheme to divert tens of millions of Medicaid funds to themselves while intentionally understaffing the facilities. The result, according to the report released by the Office of the State Comptroller, was widespread neglect of the nursing homes’ residents and horrifying conditions that included the sexual assault of two residents, the death of another, and thousands of 911 calls. According to the investigation by OSC’s Medicaid Fraud Division, Daryl Hagler, and his next-door neighbor and friend, Kenneth Rozenberg, hid their gross profiteering and self-dealing, using complex and improper real estate deals, excessive loans, inflated rents, and undisclosed fees paid to nine “related entities”—companies they or their relatives owned and controlled. Hagler owns the operations’ companies, while Rozenberg and Klein Family Enterprises (KFE) own the property companies.
From 2019 through mid-2024, the nursing homes received $134.8 million in Medicaid funds and Hagler and Rozenberg funneled $92 million of it to their related businesses. About $27.8 million of those funds went directly to Rozenberg and KFE’s bank accounts; they improperly used an additional $7.8 million of Medicaid funds to help fund their purchase of the nursing home businesses. At the same time, both facilities were chronically understaffed, with many of the staff who worked there unlicensed and unqualified for the jobs they did. Deptford and Hammonton failed to meet minimum staffing requirements in all but two of the 146 days OSC reviewed. During OSC’s review period, the Centers for Medicare & Medicaid Services repeatedly designated both nursing homes as “special focus facilities”—a category reserved for the “worst of the worst” nursing homes.