Former Owner of Plainfield Nursing Home Sentenced to 18 Months in Federal Prison for Bankruptcy Fraud

David B. Fein, United States Attorney for the District of Connecticut, announced that Stanley Rodowicz, Jr., 57, of Wellington, Florida, was sentenced today by Senior United States District Judge Ellen Bree Burns in New Haven to 18 months of imprisonment, followed by two years of supervised release, for embezzling more than $800,000 from a Plainfield nursing home that is in bankruptcy proceedings.

According to court documents and statements made in court, Rodowicz was the owner and administrator of Village Manor Health Care Inc. (VMHC), a corporation that operated a nursing home with approximately 90 beds in Plainfield, Connecticut. In February 2007, Rodowicz authorized VMHC to file a voluntary Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court for the District of Connecticut. From February 2007 to March 2010, Rodowicz operated VMHC as a Chapter 11 debtor and debtor in possession and maintained control over VMHC’s bank accounts, cash, accounts receivable, and accounts payable.

During the bankruptcy proceedings, Rodowicz caused VMHC to file numerous documents with the U.S. Bankruptcy Court, including numerous motions for authority to use cash collateral. Rodowicz knew that VMHC was only authorized to transfer or spend its cash collateral in accordance with the cash collateral budgets once they had been approved by the bankruptcy court through the issuance of a cash collateral order. Each cash collateral order authorized VMHC to pay its “landlord,” which was a partnership also owned in part by Rodowicz, a specific sum of money in payment of rent and certain escrows.

In knowing violation of the U.S. Bankruptcy Court’s cash collateral orders, Rodowicz transferred VHMC’s money to its “landlord” in amounts in excess of what was authorized by the various cash collateral orders. Through this scheme, Rodowicz embezzled $817,212 from the bankruptcy estate’s accounts. Rodowicz also falsified the books and records of the nursing home during the bankruptcy proceedings to conceal the embezzlement.

After the fraud was discovered in March 2010, a Chapter 11 bankruptcy trustee was immediately appointed by the bankruptcy court to operate the nursing home. VHMC remains in bankruptcy and has creditors claiming they are owed approximately $4 million.

Judge Burns ordered Rodowicz to pay restitution in the amount of $495,212. Rodowicz previously repaid $322,000 in an effort to conceal his fraudulent conduct.

On July 12, 2011, Rodowicz pleaded guilty to one count of bankruptcy fraud.

This matter was investigated by the Federal Bureau of Investigation, with the assistance of the U.S. Trustee Program.

The U.S. Trustee Program is the Department of Justice component that promotes and protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the civil bankruptcy laws.

Members of the public can report suspected bankruptcy fraud via e-mail to USTP.Bankruptcy.Fraud@usdoj.gov.

In the District of Connecticut, the U.S. Attorney’s Office coordinates a Bankruptcy Fraud Working Group that includes representatives from the U.S. Attorney’s Office, the Office of the United States Trustee, the United States Postal Inspection Service, the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, the United States Secret Service, and the Social Security Administration Office of the Inspector General.

This case was prosecuted by Assistant United States Attorney Ann M. Nevins.