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Perpetrators of LES’s Rivington House Scandal Scam City Again; Pay Only $2M to NYS

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The Brooklyn for-profit nursing home chain, The Allure Group, is poised to pursue its expansion after almost two years of city and state investigations.

Allure, agreed to pay $2 million in penalties and charitable contributions to local nonprofits in a deal with state Attorney General Eric Schneiderman, Crain’s reported.

This marked the end of the state’s investigation into the group’s closing of The Rivington House on the Lower East Side.

The closing caused an uproar by community members of the LES, when the nursing home for seniors with HIV/AIDS was turned into luxury condominiums.

Allure’s operators Marvin Rubin and Joel Landau were blocked from acquiring nursing homes during the state’s investigation.

Allure will pay $750,000 in fines and contribute $1.25 million to health care nonprofits on the Lower East Side. Allure also committed to spend $10 million in the next five years to establish health care facilities both in central Brooklyn and on the Lower East Side. Allure must run them for at least eight years each, Crain’s reported.

The Jewish Voice reported that The Allure Group originally had purchased Rivington House in February of 2015 for $28 million, with promises that the facility would remain an operating nursing home. They then paid the Department of Citywide Administrative Services $16 million to adjust the deed on the facility. Prior to the decision to lift the deed restrictions on the nursing home by the city’s Department of Administrative Services, the site was limited to a not-for-profit residential health-care center.

Shortly after the purchase, the Allure Group, walked off with a $72 million pay day after they sold it to real estate developers for the purpose of building luxury condominiums at the site, The Jewish Voice reported in 2016.

The Wall Street journal reported that Joel Landau who is the public face of the Allure Group, contributed $4950 to the De Blasio campaign in 2013. It has also been reported in the Daily News that James Capalino, an influential lobbyist had placed pressure on the administration to lift the deed requirements in order for one of his clients to turn Rivington House into luxury condos. Capalino was instrumental in acquiring $50,000 in donations to Mayor De Blasio.

The mayor claims he was mislead by the company and the Department of Citywide Administrative Services changed the deed without consulting him.

“This was a mistake. It was ridiculous, and I’ve said it a thousand times,” Mayor Bill de Blasio said in June during a town hall meeting on the Lower East Side. “Not only did we entirely change the rules around anything like this; now it will require a personal signature from me to happen, which did not happen in this case.”

Attorney General Schneiderman concluded that The Rivington sale ultimately passed legal muster, as Schneiderman’s concluded that the developers’ title to the property “is not subject to effective legal challenge.” Schneiderman enforced penalties on Allure because his office found that designated members of the company’s board of directors failed to fulfill oversight duties.

Schneiderman withdrew his objection to Allure’s purchase of Greater Harlem Nursing Home on West 138th Street, where Allure has served as the state-appointed receiver of the financially distressed facility since 2014. Under the settlement, Allure must keep the facility open for at least nine years.

Allure can now resume the expansion plans that Schneiderman blocked in 2016 during the investigation. “Now that the roadblocks holding up our full control have been lifted, we look forward to turning our Harlem center into a world-class facility similar to all other Allure facilities,” Landau said.

By: Michael Hershprung

 

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