Campaign to Elect Christopher Young
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ourmedia@yahoo.com
SENT: Thursday July 20th, 9am
PRESS RELEASE
FOR IMMEDIATE RELEASE:
HUD SUSPENDS RHODE ISLAND NURSING HOME OPERATORS WHO
HAVE AGREED TO PLEAD GUILTY TO EQUITY SKIMMING
Providence, RI - On Thursday July 20th, 2006, democrat Christopher Young,
candidate for U.S. Senate and Mayor of Providence, stated publicly that he
commends the actions taken by the housing and Urban Development General
Counsel Keith E. Gottfried and the U.S Attorney for the district of Rhode Island
earlier this month against two Rhode Island nursing home operators who were
engaged in equity skimming.
Young stated, "When elected to office I will remove those who commit fraud, waste
and abuse on all Rhode Islander's. I find it most especially offensive to hurt
those in most need in our community, including the elderly in our nursing homes."
Chris Young has posted this press release on his website WhereToVote.com
The above comments are based on the below press release from HUD No. 06-075
http://www.hud.gov/news/release.cfm?content=pr06-075.cfm
WASHINGTON - Housing and Urban Development General Counsel Keith E.
Gottfried today announced the immediate suspension of two Rhode Island nursing
home operators from engaging in any further business transactions with HUD and the
Executive Branch of the Federal Government. The suspensions of Antonio L.
Giordano and John Montecalvo are based on the filing of criminal charges against
them earlier this month by the U.S. Attorney for the District of Rhode Island.
In the criminal charge filed with the U.S. District Court for Rhode Island, the U.S.
Attorney alleges that between January 1998 and May 2004, Giordano and
Montecalvo engaged in equity skimming (in violation of 12 U.S.C. § 1715z-19) by
using and authorizing more than $780,000 in rents, assets, proceeds and other funds
derived from three Federal Housing Administration (FHA)-insured nursing homes
they operated, to pay expenses that were not reasonable nor necessary for nursing
home operations. The diversion of funds occurred during a period when the
FHA-insured mortgages on Coventry Health Center, Mount St. Francis Health
Center and Hillside Health Center, the three nursing homes operated by Giordano
and Montecalvo, were in default and in a "non-surplus cash" position, in violation of
HUD's Regulatory Agreement. An audit and investigation conducted by HUD's
Office of Inspector General produced the information contained in the criminal
charge.
Pursuant to a plea agreement entered into by Giordano and Montecalvo, on June 21,
2006, each of the defendants has pled guilty to one count of Equity Skimming, which
upon conviction carries a maximum fine of $500,000 and five years imprisonment or
both. In addition, the plea agreement spells out that the defendants are jointly and
severally liable for restitution of the entire amount they skimmed, $780,539. In
addition, the plea agreement permits HUD and other federal agencies to pursue
administrative or civil actions against the defendants.
"The plea agreement is the result of a lot of tireless dedication, hard work and close
coordination on behalf of HUD, the Department's Inspector General, the Office of
the U.S. Attorney for the District of Rhode Island and our other colleagues at the
U.S. Department of Justice," said Gottfried.
"This action demonstrates the steadfast and enduring commitment of HUD, the HUD
OIG and our other federal partners to make sure HUD's programs are administered
in accordance with the letter and intent of the law and are free from fraud, waste and
abuse," said Kenneth M. Donohue, Sr., HUD's Inspector General.
In addition to the suspension of the two defendants, the Departmental Enforcement
Center within the Office of General Counsel suspended 14 entities deemed to be
affiliates of Giordano and Montecalvo.