A federal court has ruled against two former nursing home executives on behalf of the Department of Housing and Urban Development (HUD) for misdirecting millions of dollars from two troubled nursing homes in Rhode Island that were both FHA-insured.
The former executives in question, Antonio Giordano and John Montecalvo, engaged in equity skimming by using and authorizing rents, assets, proceeds and other funds derived from FHA-insured nursing homes they operated to pay expenses that were “not reasonable nor necessary for nursing home operations,” according to HUD.
They misused about $6 million of project funds in violation of the loan agreement “to enrich [themselves] and certain members of Giordano’s family,” HUD alleged.
The ruling stems from a 2009 lawsuit filed by HUD accusing Montecalvo and Giordano of equity skimming. The court ruled that the two executives diverted $4.2 million of project funds from Mount Saint Francis Health Center in Wonnsocket, R.I., and about $1.8 million from Coventry Health Center in Coventry, R.I.
Ultimately, the court’s judgment was in favor of HUD, and Giordano was ordered to pay double damages of $12 million.
Written by Alyssa Gerace