Van Duyn: Where Did the Care Money Go?

In the Van Duyn nursing home fraud case, the owners agreed to a $12 million settlement over allegations that they diverted care money through inflated rent and other payments while residents went without adequate staffing and treatment. The agreement reaches both sides of the same budget: what the home must spend on residents and what the owners can take out. For someone who saw the staffing decisions or handled the accounts, those are parts of the same story.

The New York Attorney General announced the settlement on August 25, 2025. The settlement agreement sets out the state’s allegations and the owners’ commitments to fund care and accept independent oversight.

The Businesses Behind Van Duyn’s Care Budget

Van Duyn Center for Rehabilitation and Nursing held the license for the 513-bed Syracuse skilled nursing facility. The agreement identifies the businesses under common ownership involved in its property, services and management.

5075 West Seneca owned the property and served as landlord. Upstate Services Group LLC provided administrative and consulting services involving resident care, staffing policies and financial decisions. The owners described Upstate SK LLC as providing fiscal, office, administration and compliance services.

That division of roles matters in nursing home ownership and related party costs. Rent leaves the operating company’s account as an expense but reaches the property company as income. When both have the same owners, money has moved away from the care budget while staying within their businesses.

The California Research Bureau’s 1997 report, Fraud and Abuse in the Health Care Market of California, explains how complex contractual and financial arrangements behind patient care can give someone intending fraud an advantage.

At Van Duyn, the Attorney General’s allegations followed that money through the landlord, service companies and owners. The transactions had different labels. The obligation to care for residents stayed at the home.

Care Cuts, Continued Admissions and False Records

The Attorney General alleged that Van Duyn kept staffing too low to reduce expenses while continuing to admit residents to increase revenue. The state alleged that staff faced assignments they could not finish at a reasonable pace, insufficient registered-nurse supervision and pressure to document care they had not provided.

The state’s account included residents who missed medications and treatments, developed worsening pressure ulcers or reached the hospital after staff failed to respond to deteriorating conditions. It also described deaths and unsafe discharges. The alleged failures concerned care the home had accepted payment to provide.

For one resident, the agreement describes hidden-camera evidence of repeated neglect. The Attorney General alleged that dozens of staff falsified medication and treatment records and tens of thousands of nursing-aide records for that resident. The Attorney General also alleged that Van Duyn submitted Medicaid certifications saying billed services had actually been delivered.

The alleged false record did more than make an unfinished shift look complete. It supported the home’s claim that it had provided the care Medicaid was paying for.

Alleged Inflated Rent and Services Paid for Twice

The Attorney General put the alleged up-front profit taken from Van Duyn at $100,164,062, far above the settlement. The agreement describes payments extracted before the owners ensured adequate care and staffing, through real-estate transactions, salaries, equity withdrawals and overlapping service charges.

According to the state, a home the owners bought for under $5 million in 2013 carried a $46 million mortgage after the 2018 refinancing. The Attorney General alleged that the owners took mortgage proceeds for themselves and left the home carrying debt that brought it no benefit.

The rent supplied another route out. The state alleged that 5075 West Seneca charged rent above both the mortgage debt service and the New York average, taking resources the home could have used for care. Van Duyn’s cost reports allegedly omitted the landlord’s financial statements, concealing the transfers.

Van Duyn allegedly paid Upstate SK for services it also paid Upstate Services Group to perform. The Attorney General alleged that owner salaries covered work that was not exclusively for the home or duplicated those companies’ services. The state also alleged that Upstate SK was missing from required portions of the home’s cost reports.

A cost report with missing supplier disclosures hides part of the transaction. The home shows the expense. The supplier’s books show who received it and what work stood behind it.

What Evidence Is Needed to Prove Fraud?

In a case like Van Duyn’s, the evidence connects the care required, the care actually delivered, the Medicaid certification and the money leaving the home. The agreement makes those comparisons specific enough for a nurse, administrator or finance employee to recognize their part.

For the clinical side, we connect care plans with medication and treatment administration records, aide documentation and the electronic history of each entry. The Attorney General alleged that Van Duyn installed medical-record software during the investigation that prevented investigators from determining whether entries concealed missing or late care. The agreement records that the home replaced it during the investigation with a system preserving entry times and the identity of the person making each entry.

For the financial side, we compare leases and mortgage documents with bank transfers and rent payments, and service contracts with invoices, payroll and the work actually performed. Staffing and admissions decisions connect those accounts to the demands placed on the floor. Ownership disclosures and cost reports show what the home told the government about the businesses receiving its money.

The connection between care records, payment records and management decisions is the point. A finance employee and a nurse may see different ends of the same transaction.

Independent Monitors Can Inspect Care and Stop Transfers

The agreement gives the healthcare monitor access to the floor and the financial monitor access to the accounts. Their authority reaches the same places the Attorney General alleged had failed residents.

The independent health care monitor can inspect without notice and review documents. Its recommendations address staffing, supervision, compensation and limits on admissions. Van Duyn cannot reject a recommendation simply because it costs money or reduces revenue.

The independent financial monitor gets direct electronic access to Van Duyn’s bank accounts and access to the home’s books and the Van Duyn-related records of owner-controlled vendors. It can block, cancel or reverse Resident Care Fund transactions. Approval extends beyond that fund to payments for rent, management, consulting and other services from businesses under common ownership.

The owners must maintain the required electronic-record capabilities while they operate the home, and Van Duyn must correct its cost reports and disclose all businesses under common ownership with the required financial statements.

Owner Payments Come After Care Obligations

Owner draws require a year-end surplus and financial-monitor approval after consultation with the health care monitor. The draw cannot exceed the surplus. Rent and service payments require approval based on reasonable amounts, sufficient value and a legitimate purpose in the home’s interests.

The agreement restricts closure for financial distress or declining occupancy. If the owners close the home, the remaining care-fund balance must go to New York Medicaid.

Where the Settlement Money Must Go

The Van Duyn agreement requires $2 million paid to the Attorney General’s Medicaid Fraud Control Unit and $10 million committed to a Resident Care Fund. The first repays public money on Medicaid and Medicare claims. The second funds approved improvements for residents in three annual installments.

The fund can pay for staffing enhancements and other care improvements endorsed by the healthcare monitor. It cannot replace the owners’ obligation to provide adequate care regardless of cost.

The owners must supply that money without using Medicaid or Medicare payments made to Van Duyn or other homes they own. They must also pay the monitors separately, keeping those charges out of the home’s operating accounts and the care fund.

The same approach appears in Centers for Care’s 2024 agreement. New York paired resident-care funding with public repayment and health and financial monitors after alleging transfers to connected businesses alongside insufficient staffing. The remedy follows the alleged problem: money for care, and oversight of the decisions that move it elsewhere.

When Inside Knowledge Points to False Billing

If you know who approved an inflated payment or why a care entry was changed, that knowledge can connect the accounts to the billing. Our whistleblower experts work with you to build your strongest nursing home fraud case from that inside knowledge. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Saw the Care Budget From Inside

If you saw staff stretched beyond the care plan while rent or service payments kept leaving the home, speak to one of our whistleblower experts about where the care money went. We build the case with you, bring in nursing home fraud whistleblower lawyers who understand care records and owner-controlled finances, and stay beside you throughout the case.