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And BCIA officials say they suspect there could be more.
The hospital and its management company, Solomon Health Group, “induced” the BCIA to pay for “services that were never performed and equipment that was never installed, through intentional and deliberate double-billing and the submission of other deliberately false and misleading documentation,” the authority alleges in an amended complaint to one filed last month in U.S. District Court in Newark.
The conspiracy included “secretly moving equipment to avoid detection and interfering with BICA’s efforts to investigate this matter,” the authority says, in demanding a jury trial.
What’s more, yesterday’s filing alleges that former Executive Director Edward H. Hynes and his then-assistant, Elnatan Rudolph, submitted bogus paperwork to mask the ripoff while pulling scams of their own that cost taxpayers hundreds of thousands of dollars.
Hynes, who retired two years ago, “repeatedly told BCIA staff that [he] wanted nothing to do with the Medical Center and spent little time, if any, on matters concerning oversight,” according to the 17-count, 51-page complaint.
Rudoloph, a former Teaneck councilman who also operates a political consulting business, “treated his position as essentially a ‘no-show job’ that paid him $95,000″ in annual salary, it says.
“He spent little or no time at the Medical Center, spent little time at BCIA’s office, and rarely informed BCIA’s staff where he was at other times,” the complaint alleges. “In fact, other than occasionally signing documents, BCIA’s staff did not know what he did or what his responsibilities were.”
Hynes and Rudolph are named as defendants, along with up to 100 unknown individuals and up to 100 companies who may have participated in the alleged scheme.
Accused co-conspirators named in the complaint include:
• U.S. Elevator of Fairfield;
• Current Elevator of Milford, Pa.;
• Joseph Glaski, the vice president of facilities management for the hospital;
• Herman Lindenbaum, the hospital’s director of engineering;
• David Sebbag, a limited partner in Bergen Regional.
Although the complaint is a civil filing, county officials have had contact with the U.S. Attorney’s Office and the Bergen County’s Prosecutor’s Office, CLIFFVIEW PILOT has learned.
The BCIA said it was frustrated in obtaining accurate and detailed accounts of what Bergen Regional Medical Center LP, the facility’s private operator, was up to.
Things got fishy two months ago, the complaint says, when the authority learned that a building elevator was shut down for a long time even though thousands of dollars had been paid to repair it years earlier.
The authority asked Lindenbaum for documentation of the work, which, in turn, “triggered a flurry of actions” aimed at concealing what really happened, alleges the complaint, a copy of which was obtained by CLIFFVIEW PILOT late Wednesday.
Lindenbaum, it says, “directed US Elevator to return and commence installing the equipment … in the hope that BCIA would not discover” the truth.
Sebbag, meanwhile, “specifically instructed Glaski not to cooperate with BCIA’s investigation,” the authority alleges in its complaint.
The filing calls Sebbag’s conduct “the epitome of duplicity,” given that he “advised BCIA that Glaski was an independent contractor and was responsible for the unlawful and illicit conduct.”
It also accuses Hynes, Randolph and others of colluding in “a charade of denying knowledge of the matter, placing blame on others, and pretending to conduct a legitimate investigation.”
Hospital adminstrators claimed last month that they couldn’t find documents showing the work, the complaint alleges. What’s more, it says, Current Elevator refused to turn over its records.
But the BCIA — after requesting more specific information from hospital administrators just weeks ago — says it found plenty of instances of theft and fraud on its own:
In one, it says, Glaski submitted a $61,000 purchase order for a new elevator jack, then submitted a separate order for the same part three weeks later. He later requested $30,000 “for the installation of the same equipment that BCIA had previously been charged for.”
Rudolph signed one purchase order, Hynes the other, the complaint says.
The authority also cited double billing of $31,500 by Glaski to install hoist ropes in one building and $7,500 worth of the same work — twice — in another. Hynes signed the vouchers in both cases, the complaint says.
Along with the paperwork it says supports the complaint, the BCIA cites other instances of double billing for elevator drives and key switches, collectively costing taxpayers hundreds of thousands of dollars.
But these were minor compared to the $264,500 that the authority says Glaski billed for installing drivers, controllers, chokes and transformers in one of the center’s buildings, followed by a request for the very same amount eight months later.
Although the BCIA says it was billed twice, “those services were never rendered and that equipment was never installed.”
Glaski later billed an additional $24,900 — twice — without having done that work either time, the complaint alleges. Again, Hynes or Randolph signed off on them, it says.
Both then schemed with various contractors to “conceal and prevent the discovery” of the alleged crimes, the BCIA complaint alleges.
Equipment for the major project Glaski billed for “was hidden in an elevator mechanical room at the Medical Center in order to conceal the fact that it was never installed,” it says.
“Later, when Current Elevator was replaced by US Elevator in or about 2010,” the complaint continues, Bergen Regional Medical Center LP officials “directed US Elevator to move the equipment off-site in a further attempt to conceal the fact that it was never installed.”
The equipment turned up at US Elevator’s Fairfield facility, it says.
BRMCLP officials, in a March 7 letter to the authority, admitted fraud had occurred but “falsely and disingenuously sought to portray those activities as independent actions of Glaski, Curretn Elevator and US Elevator,” and “indicated that it is conducting an investigation into the matter in a transparent effort to further conceal its involvement in those activities,” the BCIA alleges.
The authority says it also “suspects that it is likely that additional, undiscovered fraud or similar abuses have occurred in connection with other capital expenditures at the Medical Center that were paid for by BCIA.”
As a result, the authority is asking a judge to order that complete, accurate information be released — including “an accounting of all transactions relating to capital expenditures” since Jan. 1, 2005 — “so that the BCIA and Bergen County may fulfill their obligations to the citizens and taxpayers” with regard to the future of New Jersey’s largest public hospital (1,185 beds, 22 buildings and structures).
The BCIA also wants a trial in which it can pursue compensatory and punitive damages, with interest, from the defendants, as well a reimbursement to the county of any and all compensation paid to all of them.
Although the filing notes a significant amount of Medicaid and Medicare payments toward providing acute and long-term care, it doesn’t mention a host of complaints and deficiencies handled by state regulators. However, the authority says it has been exploring options for the future of the Paramus hospital once known as “Bergen Pines,” including its possible sale.
“Among the reasons behind these considerations is the stark reality that a significant portion of the Medical Center’s patient population originates from area outside of Bergen County, and the Bergen County’s taxpayers have been requested by [the hospital] to fund capital improvements … in the amount of $87 million over the next six years,” it says.
The BCIA says it has asked Bergen Regional Medical Center LP and the Ridgewood-based Solomon Health Group for “various categories of information” for the evaluation but has been refused.
Both are trying to “extend the existing lease and operating agreement for the Medical Center, which is set to expire in 2017,” the complaint says. The county has been leasing the medical center and its assets to the BCIA for more than 14 years.
The BCIA retained the operating license issued by the state Department of Health and Senior Services, and Solomon has contractually been responsible for “all management, administration, operation and maintenance services,” the complaint says.
That work includes maintaining the property, handling the workforce, selecting qualified administrators, providing insurance and purchasing/disposing of all equipment and supplies, and various other management services.
The BCIA says Bergen Regional Medical Center LP contracted out some of the work, including hiring Global Employee Benefits Management Inc. to “assist in managing and contracting out insurance benefits for the Medical Center’s managed operations,” with premiums that the authority said reached $18 million in certain years.
Solomon, meanwhile, received $7.8 million in fees in certain years and iCare Management as much as $1.5 million, the complaint says.
Bergen Regional Medical Center LP requested $13.2 million in capital improvements for 2011 from the BCIA, as part of a proposed six-year plan totaling $87 million, the court papers say.
But the BCIA said it has to take taxpayers into account, and the idea of putting so many tens of millions of dollars into what has become such a suspect venture required clear and decisive action.
Under its contract with Bergen Regional Medical Center LP and Solomon, the authority says it is to receive a full and accurate accounting of all hospital expenses. That information is “essential to a complete understanding of the operation of the Medical Center and to allow BCIA to fully evaluate it,” the complaint contends.
The authority says it first asked BRMCLP for detailed information on Oct. 4, 2011 that included audited financial statements for 2008-10, budgets, managed care contracts, reports filed with the state and documents “reflecting patient age, residence and/or demographics filed with the DHSS on behalf of the Medical Center” for those same years.
The BCIA says it also requested insurance contracts, a list of open legal claims, inspection reports, contracts with physicians, organizational charts and resumes, among other material.
The authority says it got “certain documents,” but not all, in return. It came back in November, asking for the rest of the material before Dec. 19.
However, the complaint says BRMCLP and Solomon “failed to provide” the information, despite “the public’s clear and unquestionable” right to it. Instead, the BCIA says, they submitted a “voluminous proposal” requesting a 10-year extension of the agreement with the authority.
“Solomon’s and BRMCLP’s actions are depriving BCIA and Bergen County of the information that is necessary to make an informed decision about the future of the Medical Center and which courses of action will best enable BCIA and Bergen County to fulfill their duties and commitments to the citizens and taxpayers of Bergen County,” the authority asserts in seeking an order for the necessary paperwork.
Named as “Medical Information Defendants” in the complaint:
• Global Employee Benefits Management Inc.;
• iCare Management;
• Life Source Services;
• International Information Technologies;
• Clifton-based Bergen Regional Anesthesiology Group;
• Fair Lawn-based Bergen Regional Medical Center Radiology Associates;
They “may have in their possession or control Medical Information … that neither [the hospital] nor Solomon have,” the authority says.
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