Federal officials Thursday accused a former Louisiana nursing home owner of funneling money from his facilities to use on a personal spending spree, rather than preparing an emergency evacuation site as promised.
The US Department of Justice announced the complaint against Bob Dean Jr. and several affiliated corporate entities for the misappropriation and misuse of money for four nursing homes before and after Hurricane Ida made landfall in August 2021. The complaint alleges that Dean required the homes to “pay rent” on an industrial warehouse that was to serve as an evacuation site during the storm. However, there was no sanitation, insufficient wound care, inadequate medical care and support, and not enough food.
Seven residents died after the Ida evacuation, and a judge has approved a $12.5 million in settlement for victims and survivors. It is to be paid from insurance funds.
The conditions at the warehouse became widely known on Sept. 2, 2021, when the state Department of Health removed residents from the warehouse and revoked Dean’s nursing home licenses.
Dean’s attorney did not respond to requests for comment.
In December, Louisiana regulators announced new rules for “unlicensed” evacuation shelters such as churches, school gyms, and other non-medical facilities. Individual sleeping areas must be at least 60 square feet, and feature one shower and hand-washing station for every 15 people, and one toilet for every 20 people. Sites must also have working heat, air conditioning, and adequate ventilation.
New, permanent regulations that are similar are expected to be issued this year.
The four nursing homes, all of which were owned and operated by Dean and his companies, and had loans insured by the Federal Housing Administration, are Maison De’Ville Nursing Home – Houma, Maison De’Ville Nursing Home of Harvey, Maison Orleans Healthcare of New Orleans, and West Jefferson Health Care Center, the Justice Department’s press release said.
FHA mortgage insurance gives lenders protection against losses resulting from borrowers defaulting on their loans, but to obtain these loans, recipients must agree that the assets and income of an insured nursing home will only be spent on goods and services needed for operations. The complaint alleges that Dean “directed his bookkeeper to sweep all of the nursing homes’ bank accounts and transfer the millions of dollars of funds to his personal accounts.”
The federal government alleges Dean misspent more than $4 million of assets and income from the nursing homes. Officials said money was used to buy antiques, firearms and vehicles, and to pay family members allowances.
“Federal loan guarantees are designed to facilitate the care of our most vulnerable citizens,” said US Attorney Ronald C. Gathe Jr. for the Middle District of Louisiana. “It is unfortunate that some chose to use the tragic landfall of Hurricane Ida as an opportunity to take advantage of the system to unjustly enrich their business.”
