After cutting staff at Darby nursing home, former manager pleads no contest to recklessly endangering residents.

Jun. 2—The ex-manager of a nursing home in Darby has pleaded no contest to recklessly endangering three residents who died after the facility slashed staffing while he was in charge, Pennsylvania Attorney General Josh Shapiro said Wednesday.

Shapiro also reached an agreement with the home's majority owner, Charles-Edouard Gros, of New York, that requires his businesses to pay $700,000 to care for residents at St. Francis Center for Rehabilitation & Health Care and to give money to an advocacy group for the elderly. St. Francis was among seven nursing homes that Gros bought in 2014 from the Archdiocese of Philadelphia for $145 million.

The misdemeanor charges against the former manager, Chaim "Charlie" Steg, stem from incidents in 2017 when the state Health Department took the extraordinary step of installing a temporary manager at St. Francis after an inspection that found severe neglect of patients, including one with "wounds that went down to the bone with exposed tendon."

Steg, 40, has his own company now. Since 2018, he and partners have bought at least a dozen Pennsylvania nursing homes, including the former Abramson Center in Horsham. Under a deal with prosecutors, he ls to be sentenced in October to 6 to 23 months of house arrest followed by three years of probation. He did not admit guilt in his plea.

"They should require him to serve his house arrest at St. Francis," said Martin S. Kardon, a Philadelphia attorney who represents victims of nursing-home neglect and their families. He has represented individuals at the 273-bed St. Francis and at other facilities owned by the same company.

As part of his punishment, Steg will not be allowed to own a majority stake in or manage nursing facilities for five years, the Attorney General's Office said. Federal records list him as a minority owner of several Imperial Healthcare Group LLC facilities.

The consequences of the conviction could be more significant under federal law if this case leads to Steg's mandatory exclusion from participation in federal health-care programs — as expected by David R. Hoffman, a nursing-home consultant and former federal prosecutor. If that happens, "he can't own more than 5% of the business and really can't be involved in day-to-day activities," Hoffman said.

Steg's criminal attorney, Arthur T. Donato Jr., could not be reached for comment.

Imperial said in a statement that the company's vice president of operations, Leon Tarlow, will take over as interim president and chief executive from Steg.

Criminal charges of any kind against nursing-home executives and managers are rare, according to experts. The charges against Steg, of Lakewood, N.J., are believed to be the first criminal reckless endangerment charges based on inadequate staffing levels and practices in a nursing facility in Pennsylvania, the Attorney General's Office said.

"It is the law to uphold the obligation to keep residents safe‚" Shapiro said during a news conference outside Darby Borough's municipal building. "If a facility cuts staff to the point that they can't give residents the care they need — we're going to find out, and we're going to hold them accountable."

Separately, Shapiro's office reached the civil settlement with St. Francis's owner, which operates under the umbrella of Center Management Group. The deal includes $600,000 to be placed in escrow for the care of St. Francis residents and $100,000 for the Philadelphia nonprofit Center for Advocacy for the Rights and Interests of the Elderly.

Center Management, where Steg worked as regional director of operations, had previously paid $504,325 in fines to federal and state authorities related to the neglect that prompted the attorney general's investigation, state prosecutors said. The settlement also requires St. Francis to maintain increased staffing and to undergo quarterly audits by the state Department of Health for one year.

Along with St. Francis, Gros in 2014 also bought Immaculate Mary, Saint John Neumann Home, and Saint Monica Manor in Philadelphia; Saint Martha Manor and Villa Martha, both in Downingtown; and Saint Mary Manor in Lansdale.

A 2018 Inquirer analysis found that after Gros' Flushing, N.Y.-based firm took over, staffing at the former archdiocesan facilities fell sharply while profits soared. St. Francis went from roughly break-even in the two years before Gros bought it to being among the most profitable.

The analysis of Medicaid cost reports found that Gros reduced by 29% the amount of care provided by registered nurses at St. Francis in a year ended in mid-2017, compared with the last full year the archdiocese owned the facility. That calculation looked at the hours put in by registered nurses.

Academic analyses have found that the presence of registered nurses is key to high-quality care in nursing homes.

The number of registered nurses at St. Francis fell almost in half after Gros bought it, the paper found. Overall nursing staff fell roughly 20%.

Gros was not charged. He did not respond to an email requesting comment on his civil settlement.

Asked why Gros did not face criminal charges, Shapiro said: "We filed criminal charges where they were warranted. We held the establishment accountable to the best of our ability."

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