While long-term care operators followed orders Tuesday to evacuate before a potentially devastating hurricane slams much of Florida, one of the most vilified nursing home operators in the nation agreed to an $8.2 million settlement in connection with his role in a hurricane-related debacle three years ago.
The payouts continue to pile up for Bob Dean, who evacuated residents of seven of his nursing homes near New Orleans to an ill-prepared warehouse he owned when Hurricane Ida hit Louisiana in 2021. Residents were left with insufficient sanitation, food and medical care, officials said.
Seven died within days of Hurricane Ida and hundreds of others had to be rescued from squalid conditions by state officials.
Tuesday’s Department of Justice announcement said Dean violated terms of his Federal Housing Authority loans by using federal dollars for personal gain instead of patient care throughout.
He skimmed funding from the facilities for at least five years, neglecting to build up emergency preparedness plans and accommodations, officials said in announcing a consent decree. It resolves allegations of financial misconduct allegations against him and affiliated corporate entities.
“Dean funneled money that should have been used to prepare an evacuation site for nursing home residents to his personal bank accounts, leaving his nursing homes — and more importantly, the nursing homes’ residents — unprepared for a hurricane,” a DOJ statement said Tuesday.
After Hurricane Ida, the state subsequently revoked Dean’s nursing home licenses, and he has been under multipronged legal sieges ever since.
The DOJ said that even after the devastation of the hurricane, Dean “did not use the homes’ income and assets solely to operate or maintain the nursing homes, but instead to purchase personal goods and services, including antiques, firearms and cars.”
Authorities warn providers
Tuesday’s DOJ announcement could be considered fair warning to any providers that might try to skirt or ignore officials’ warnings in Florida this week.
“Nursing home operators like Mr. Dean have an obligation to protect their residents during such events, particularly if they are going to rely on federal programs to support or sustain their businesses,” said Ronald C. Gathe Jr., US Attorney for the Middle District of Louisiana. “This settlement will ensure that those individuals charged with caring for our community’s most vulnerable residents take seriously their duty to have proper safeguards and plans in place to avoid tragedies like the one we saw in Independence, Louisiana, after Hurricane Ida.”
The most recent Dean punishment illustrates the varied fronts that authorities can pursue when wrongdoing is alleged. The FHA is part of the Department of Housing and Urban Development and provides mortgage insurance on loans that cover facilities such as nursing homes. Assets and income of an FHA-insured facility may be spent only on goods and services that are reasonable and necessary to building operations.
“Owners of FHA-insured nursing homes should be on notice that we will hold them accountable when we learn of allegations that they have failed” to meet obligations to adequately care for their patients, said HUD General Counsel Damon Smith.
“By the time Hurricane Ida bore down on the vulnerable nursing home residents at properties operated by Mr. Dean, he illegally skimmed funding from those facilities and failed to maintain sanitation and adequately equip the warehouse he designated as the evacuation site,” said HUD Inspector General Rae Oliver Davis. “He unfairly enriched himself while residents under his charge endured horrid conditions including insufficient food and medical care. HUD OIG will continue to work with our law enforcement and prosecutorial partners to hold accountable those who misappropriate funds at the expense of vulnerable populations.”
In July, Dean was sentenced to three years of probation and ordered to pay more than $1.3 million in restitution for the disastrous Ida emergency building evacuations. A state judge initially sentenced him to 20 years in prison but deferred that sentence to probation, citing his age (70), lack of prior criminal record and size of his monetary penalties as mitigating factors.
In connection with that sentencing, Dean pleaded no contest to 15 state criminal charges, including multiple counts each of cruelty to the infirmed, obstruction of justice and Medicaid fraud.
Multiple class action lawsuits involving Dean’s former residents are currently in progress. In 2023, one settled for $12 million.
