Official Site of The State of New Jersey

TRENTON — The Office of the State Comptroller (OSC) today announces recent enforcement actions that it has taken to address fraud, waste, and abuse at three South Jersey nursing homes: Hammonton Center for Rehabilitation and Healthcare and Deptford Center for Rehabilitation and Healthcare and South Jersey Extended Care in Bridgeton.  

OSC has filed a lawsuit in Superior Court against the owners of Hammonton and Deptford Centers and their associates to recover misspent and concealed Medicaid funds. OSC has also issued a final notice to South Jersey Extended Care, currently under a court-appointed receivership, that Medicaid funding will cease on March 13, 2026, with no further extensions. 

“Medicaid funds must be used to care for residents, not to enrich owners and their families and associates,” said Acting State Comptroller Kevin Walsh. “OSC takes these enforcement actions to ensure accountability and protect the integrity of the Medicaid program.”

Hammonton and Deptford Report and Lawsuit

On December 10, 2025, OSC issued a report  finding that the owners and associates of Hammonton and Deptford Centers improperly diverted funds from resident care and should repay $124 million. OSC’s investigation found widespread neglect and dangerous conditions that included the sexual assault of two residents, the death of another, and thousands of 911 calls. 

According to the investigation by OSC’s Medicaid Fraud Division, Daryl Hagler, and his next-door neighbor and friend, Kenneth Rozenberg, hid their gross profiteering and self-dealing, using complex and improper real estate deals, excessive loans, inflated rents, and undisclosed fees paid to nine “related entities”— companies they or their relatives owned and controlled. Hagler owns the operations’ companies, while Rozenberg and Klein Family Enterprises (KFE) own the property companies.

On January 19, 2026, OSC filed suit in Superior Court, Mercer County, against Hagler and Rozenberg and their family members, associates, and related entities, a total of 33 defendants. The complaint alleges a multi-year scheme to exploit two Medicaid-funded nursing homes for unlawful profit, while residents suffered sub-standard quality care. The complaint seeks restitution and disgorgement of Medicaid overpayments, civil penalties for false statements/false claims and staffing violations, and damages.

Hagler and Rozenberg have ties to nursing homes in New Jersey, New York, Kansas, and Missouri, with their largest presence is in New York, where they are involved with at least 31 facilities.

South Jersey Extended Care Medicaid Suspension

Earlier this month, OSC notified the receiver for South Jersey Extended Care (SJEC) and its owner Mordechay Weisz (Weisz) that SJEC and Weisz would both be suspended from the Medicaid program effective March 13, 2026.

This action stems from OSC’s December 12, 2024 report, An Investigation of Fraud, Waste, and Abuse in New Jersey’s Lowest-Rated Nursing Home , which found that SJEC’s owners and operators improperly funneled millions of Medicaid dollars into their own businesses and charities, leaving residents in a dismal, understaffed, and under-resourced facility.

On November 20, 2025, OSC denied SJEC’s proposed new ownership group’s application to participate in the Medicaid program, citing “an unacceptably high risk of fraud, waste, and abuse” and finding the group lacked the “the requisite responsibility, accountability, and candor” to expand their presence in the New Jersey Medicaid program. In the 15-page denial letter to the new proposed ownership group, Bridgeton SNF, LLC, OSC found undisclosed financial ties to the prior operator, a poor track record at other nursing homes, and “layers of trusts and LLCs” – which seemed designed to conceal ownership and control of the facility.  

Shlomo Fogel, a former employee of a Konig/Krausman-owned nursing home business and licensed nursing home administrator, has been operating SJEC under an agreement with the seller, Weisz, since 2023 (in 2025, a court-ordered independent receiver was named to oversee day-to-day operations and finances on the state’s behalf).

In a January 7, 2026 letter, OSC advised the receiver that Medicaid funding to the facility will cease on March 13, 2026, and no further extensions will be granted, stating: 

“[c]ontinuing the status quo indefinitely is not tenable. As things have stood since OSC issued the SJEC report in December 2024, Weisz remains in the Medicaid program and, despite OSC’s November 10, 2025 decision to deny Shlomo Fogel entry into the Medicaid program, he continues to operate SJEC. Maintaining this status quo creates unacceptable risk, both financial and otherwise, to the Medicaid program.”

Read the complaint.

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To report government fraud, waste, mismanagement, or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.