A judge has approved a nearly $1 million penalty for the former leader of a nursing home chain after the company defaulted on $146 million in loans — the biggest default in the HUD federal mortgage insurance program’s history.
Zvi Feiner, former owner of Rosewood Care Centers, has agreed to pay $965,678 in civil penalties for failing to submit the company’s annual audited financial reports for fiscal years 2015, 2016 and 2017, which was a requirement for the HUD mortgage program, according to a report by the New York Times.
Ariel Weissberg, Feiner’s lawyer, told the news organization he was “appreciative” an agreement was reached. Several investors are also suing Feiner in connection to Rosewood and other investments.
About 15% of nursing homes in the U.S. are supported by HUD’s mortgage insurance program, which helps senior care facilities secure lower-cost loans.
Last August, Rosewood Care Centers defaulted on $146 million in mortgages for its nursing home and assisted living facilities located in Illinois and Missouri. Feiner purchased Rosewood and the facilities in late 2013.
HUD paid off the loan following the company’s default and has since paid about $18 million to operate the nursing homes, according to the report. The agency has also found a firm to buy the facilities but has not yet revealed the identity of the buyer.