Government Recovers $8.86M Settlement in Assisted Living Fraud

Waters Kraus Paul & Siegel Clients and Former Manager Team Blows the Whistle on Holiday Retirement’s False Claims Act Violations Against the VA and Medicare.

On Friday, May 6th, it was announced that Holiday Acquisition Corp. and Fortress Investment Group, LLC (collectively Holiday) agreed to pay $8.86 million to settle alleged False Claims Act violations. The lawsuit was brought by whistleblowers Louis and Sheila Rose who are represented by Waters Kraus Paul & Siegel. The False Claims Act lawsuit alleges that Holiday was submitting false claims to the U.S. Department of Veterans Affairs (VA) to qualify veterans or a surviving spouse of a veteran for benefits from the Aid and Attendance Program as well as the Housebound Benefits program.

The False Claims Act (FCA) prohibits knowingly presenting a false claim or submitting a false record to the federal government for payment. Whistleblowers who report violations of the FCA and file a lawsuit on behalf of the government are called relators.

“This case was not a typical False Claims Act case,” explained Anne Izzo, one of the lawyers with Waters Kraus Paul & Siegel representing the Roses. “The fraud was more subtle…it involved substantial research, memos to the government and document review.”

The Roses, who are married, worked for Holiday at six different retirement communities owned and operated by the assisted living company across the Southwest. Mr. and Mrs. Rose were hired as a manager team to live onsite and oversee all day-to-day business activities. Over the course of their employment, the Roses claim to have witnessed Holiday take part in the following:

  • Marketing the Aid and Attendance Program and the Housebound Benefits program to veteran seniors and surviving spouses of veterans;
  • Assisting veteran seniors or the surviving spouses of veterans in obtaining these benefits when they were not eligible under the guidelines;
  • Refusing to assist the seniors with their care-needs that Holiday had promised to provide in the Care Facility Information forms they submitted to the VA.

Attorneys for the Roses say that this settlement brings vindication to many veterans who handed over their entire Aid and Attendance benefit check to Holiday. The benefit checks that were meant to be used for care-needs such as bathing, dressing, and other assistance essential to quality of life. However, the veterans and seniors reportedly received no help with those needs when requested.

The Roses expressed their concerns about possible FCA violations to their supervisor. They were fired for disagreeing with the assisted living company’s practices and refusing to go along with the potential fraud. As a result, they lost their home and slept on a friend’s blow-up mattress for months. However, the Rose’s main interest was bringing forward the fraud.

“They truly didn’t care about any reward, said Waters Kraus Paul & Siegel partner Charles Siegel. “Mr. and Mrs. Rose instinctively knew what they were being asked to do was wrong and they just wanted to see justice done.”

The lawsuit is captioned United States of America ex rel. Sheila Rose and Louis Rose v. Fortress Investment Group, LLC. et al., Case Number 3:13-cv-00314-MO.

David Sugerman of the Law Office of David Sugerman, and Amy Johnson, both of Portland, OR assisted Waters Kraus Paul & Siegel in representing Louis and Sheila Rose.

About Waters Kraus Paul & Siegel
Waters Kraus Paul & Siegel is a national plaintiffs’ firm with lawyers practicing qui tam whistleblower litigation and False Claims Act litigation as well as complex civil litigation in three offices: Texas, California, and by appointment in Illinois. Our attorneys represent whistleblowers exposing fraud against the government in a variety of cases. Contact us at 800.226.9880 to learn more about our practice and our qui tam attorneys. We look forward to discussing how we can assist you.

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