Nursing home operators Daryl Hagler and Kenneth Rozenberg are facing more pressure from a New Jersey state agency for misusing Medicaid funds
The New Jersey Office of the State Comptroller sued Hagler and Rozenberg along with their associates for “exploiting the operation” of two nursing homes, the Deptford Center for Rehabilitation and Healthcare and Hammonton Center, according to NJ.com.
The watchdog agency said it found pervasive, systemic and longstanding violations of law and a “troubling pattern” of profiteering by Hagler, Rozenberg and their associates.
The comptroller filed the lawsuit on Monday in Superior Court in Mercer County, according to the report.
The lawsuit comes a month after the comptroller issued a report making several troubling allegations about the nursing homes operators.
In the report, the comptroller claimed that Rozenberg and Hagler used related parties to inflate rent payments from nursing homes to their property companies. The comptroller also claimed they diverted tens of millions of dollars in Medicaid funding intended for vulnerable residents to themselves, according to NJ.com.
To hide their alleged scheme, they reportedly hid these actions through falsified state and federal filings.
Hagler and Rozenberg are both well-known in NYC real estate circles. Hagler has been a backer of Brooklyn dealmaker Isaac Hager. He also has acquired an Astoria commercial property known as the Cigar Factory. Rozenberg’s son owns the Israeli national airline El Al.
Both the lawsuit and comptroller’s report highlighted the poor conditions at the New Jersey nursing homes despite the flow of Medicaid payments. The Hammonton and Deptford police reportedly received more than 3,400 emergency calls about the facilities from 2019 to 2024.
Hagler and Rozenberg allegedly moved money off the nursing home books and into their bank accounts through a network of related companies, including Bronx-based Centers for Care, per the comptroller’s report.
The agency said the most lucrative scam run by Hagler and Rozenberg was through mortgages and rent payments. This was allegedly done by legally separating the nursing home operations and the nursing home properties (also known as Opco vs. Propco).
Hagler and Rozenberg were allegedly able to combine these two parts of the business to obtain $63.2 million in mortgages, which was more than the actual purchase price, according to the comptroller’s report.
“This scheme allowed Hagler and Rozenberg to purchase and own the nursing homes for nearly nothing, a mere 1.5 percent deposit,” the New Jersey Office of the State Comptroller said in its report.
Rozenberg and Hagler did not immediately return a request for comment.
— Keith Larsen
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