Nursing Home Owners May Be Liable for Fraud, Judge Says

The owners of a multistate chain of nursing homes may have committed fraud by transferring liabilities to a shell company that later lost more than $2 billion in jury verdicts to families who claimed relatives died of neglect, a federal judge said in a tentative ruling.

Fundamental Long Term Care Holdings LLC’s owners engaged in a “carefully orchestrated sham transaction” by selling a Trans Healthcare Inc. unit in 2006 to a retired graphic artist who didn’t know he bought the company, U.S. Bankruptcy Judge Michael Williamson in Tampa, Florida, said at a hearing today.