Saratoga Center Unlicensed Operator: Control of the Money, Failure of the Care

In the Saratoga fraud case, Saratoga Center’s unlicensed operator and his companies agreed to pay $656,000 to resolve False Claims Act allegations that they caused the home to bill Medicaid for worthless services. The operator chose which vendors got paid, kept the books and could hire or fire the nursing director. The state agreement connects that control to the conditions residents lived with: unpaid bills, withheld deliveries and repairs, and failures to provide basic care.

The settlement involved Alliance NJ Care LLC and Alliance HC II LLC alongside the individual who controlled them. It followed a separate resolution with Saratoga’s landlord and former operators. Those different parties mattered because the person deciding how the home spent its money was not one of its licensed operators.

What the Unlicensed Operator Controlled

The operator controlled Saratoga’s finances, vendor payments, financial records and senior personnel decisions despite never obtaining an operating license. Saratoga Center for Rehabilitation and Skilled Nursing Care was a 257-bed nursing facility in Ballston Spa, New York. Around April 2018, he began running it through Saratoga Care and Rehabilitation Center, LLC, a company that had signed a consulting agreement with the home, and through the Alliance companies.

Before licensing a nursing home operator, New York’s Department of Health reviews the applicant’s character and competence. The government alleged that a financial dispute led Saratoga’s landlord to replace the licensed operators with people who lacked operating licenses. The duties to oversee the home stayed with the licensed operators.

The signed New York agreement describes the gap between the consulting arrangement and who actually ran the home. The later operator performed responsibilities reserved to the license holders, including maintaining the books and directing key management personnel. The administrator reported to him on every aspect of day-to-day operations. He and an earlier unlicensed operator applied for licenses at various times from 2018 through 2020. The state never granted either one a license.

That reporting line gives the control question a practical answer. Someone inside the home could know who approved a vendor payment or instructed the administrator even if the licensing paperwork named someone else. The financial records and management instructions connect those decisions to the person making them.

Where the Medicaid Money Went

The operator controlled money Saratoga received from Medicaid and moved facility money into other bank accounts he controlled, including accounts owned by the Alliance companies. The agreement says Saratoga’s bank account faced frequent collection actions over earlier unpaid bills. He moved the money for use in the home’s operations and decided which vendors would be paid.

The consulting contract ended before the control did. Saratoga Care and Rehabilitation Center’s agreement expired in February 2020, but the operator continued running the home until it closed in February 2021.

In Saratoga, following the operating decisions means following the money beyond the bank account bearing the home’s name. The consulting company, the licensed operators and the companies holding the accounts each explain a different part of how the facility ran.

How Unpaid Vendors Reached Resident Care

Vendors sometimes refused to deliver goods, provide services or make necessary repairs after their bills went unpaid. The state agreement describes the resulting decline in Saratoga’s physical condition. Residents did not always have hot water or sufficient linens for bathing and care. The home also failed to maintain its fire alarm and keep the kitchen clean and able to serve hot food.

Care failures reached residents directly. The agreement describes survey findings involving medication errors, unnecessary falls, avoidable pressure ulcers that went inadequately treated, and failures to toilet and bathe residents regularly.

The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, identifies a systematic pattern of substandard treatment as underutilization, a form of health care fraud and abuse. That perspective puts the recurring failures of bathing, medication safety and wound care at the center of the Saratoga story. The payment decisions reached the bedside.

The home’s problems predated this operator. Its placement on the Special Focus Facilities list in March 2019 rested on survey findings from 2017, before he began running the home. The home remained on the list until it closed.

Saratoga also signed annual Medicaid billing certifications stating that its claims complied with applicable requirements. The state contended that the operator and the Alliance companies caused it to submit claims for substandard and worthless care. Medicaid was being billed for nursing services while the home failed to provide necessities as basic as hot water and bathing linens.

A Later Settlement With Different Parties

The Justice Department announced the later resolution on December 21, 2023. In the state agreement, the operator and both Alliance companies admitted, acknowledged and accepted responsibility for the covered conduct. Those admissions include the financial control, the vendor-payment failures and the care conditions described in the agreement.

The earlier Saratoga settlement, announced on February 27, 2023, required the landlord and other parties involved in operating the home to pay $7,168,000. The later agreement addressed the subsequent operator’s own conduct and imposed a separate payment obligation on him and the Alliance companies.

The earlier resolution also barred Saratoga Care and Rehabilitation Center, LLC from Medicare, Medicaid and other federal healthcare programs. That outcome belonged to the earlier settlement with the consulting company, separate from the later operator’s agreement with the Alliance companies.

What Evidence Is Needed to Prove Fraud?

Nursing home fraud evidence connects what residents received, who controlled the decisions and what the facility billed. In a case about unlicensed control, we examine care records alongside staffing records, vendor accounts, operating agreements and Medicaid claims. Different employees can hold different parts of that account.

Nursing notes and resident assessments describe the care. Payroll, schedules and staffing-agency invoices help establish who was available to deliver it. Books, bank records, supplier accounts and management agreements show who controlled the resources and where payment decisions were made. The billing records connect those conditions to the services charged to Medicaid.

The government’s separate worthless-care complaint against Vanguard Healthcare shows why the care records need to be compared with records outside the home. Prosecutors alleged:

That comparison tests a specific entry against where the resident actually was. For an insider with knowledge of financial control, the next connection is between those care records and the people deciding staffing, supplies and billing. We work through those connections with you.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Who Controlled the Decisions

If you know who decided which Saratoga bills were paid, or have seen the same split between financial control and resident care at another home, talk to our whistleblower experts. We build the case around your knowledge of the decisions, the care and the Medicaid claims, and bring in skilled nursing facility whistleblower lawyers who understand these cases. We stay beside you from the first call, shaping your strongest nursing home whistleblower case around the decisions you saw.