A federal judge Sept. 15 sentenced nursing home owner Antonio L. Giordano to 30 months in prison and manager John Montecalvo to 24 months “for skimming equity from three federally backed nursing homes.” The judge also fined Giordano $100,000, and ordered the two defendants to make restitution totaling $780,539.
The sentences, imposed by Judge Mary M. Lisi, in U.S. District Court, Providence, were announced by the Office of the U.S. Attorney.
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In June, Montecalvo and Giordano admitted they had caused about $780,000 in unreasonable and unnecessary payments by the nursing homes when they were already in a “non-surplus cash” position.
That money was paid to My Place Inc., a business owned by a member of Giordano’s family, which provided such services as holiday parties for staff and their families. The nursing homes, Mount St. Francis Health Center, Coventry Health Continuum Inc. and Hillside Health Center LLC, meanwhile were operating without enough cash to meet their financial obligations.
“Diverting funds in this manner seriously undermines HUD’s efforts to provide adequate nursing home facilities to those who are seriously in need,” said Michael Stephens, deputy inspector general for the U.S. Department of Housing and Urban Development.
“HUD’s Office of Investigations was pleased to join the U.S. Attorney’s Office in undertaking this investigation and prosecution for the benefit of the citizens of Rhode Island and of HUD-funded nursing homes,” Stephens said. Also joining in the probe were the Federal Bureau of Investigation and the criminal investigative division of the U.S. Internal Revenue Service.
It is illegal, the U.S. Attorney’s office noted, to make unnecessary or unreasonable payments when in default on a HUD-backed mortgage or while operating in a non-surplus cash” position.
Judge Lisi ordered Giordano and Montecalvo to repay: $267,041 to the receiver for Coventry Health Continuum; $130,798 to the receiver of the former Hillside Health Center; and $382,700 to the IRS, to cover taxes owed by Mount St. Francis Associates LP.
The resolution of these criminal charges has no bearing on the ability of the government to pursue additional administrative or civil actions against the defendants and any of the entities connected to the nursing homes they operated, the U.S. Attorney’s office noted.
