Troubling allegations at nursing home closed by the state

FESTUS, Mo. -- The bills were unpaid, the phones shut off, trash piled up, and food ran out. The problems at the Benchmark Healthcare nursing home in Festus forced the state to take the unusual step of shutting it down this month.

The St. Louis Post-Dispatch reported by the time the nursing home closed amid its parent company's financial problems, employees were spending their money to feed residents. The 60 residents were relocated to other homes.

"It was just a disaster," said Ann Bickel of the Missouri Coalition for Quality Care, which advocates for residents in nursing homes. "Some nursing homes aren't as clean, some don't have as much staff as we'd like them to have, and there is abuse sometimes. But to this extent, I have never heard of this."

The home's owner is Legacy Health Systems, a Chesterfield, Missouri- based firm that had 27 facilities in Missouri, Kentucky and Tennessee.

Legacy sold most of its assets in recent years or had them seized by creditors. About 200 people live in the remaining facilities in Sikeston, Missouri, and Puryear, Tennessee.

Legacy president John Sells said his company always took good care of its residents, even during its financial troubles.

"I've spent days walking through that whole process and trying to figure out exactly where the breakdown was," he said. "And I don't have an answer. I wish I did. I've done this all my life; this is all I've ever done."

Sells took over as president of the family business and in 1999 rebuilt the franchise by taking over other nursing-home chains, borrowing millions of dollars to expand.

He said it began to fall apart in early 2014, when his company discovered its payroll contractor had stolen from them by failing to turn payroll taxes over to the IRS. The contractor was ordered to make more than $3 million in restitution to dozens of victims.

More than $800,000 was returned to Sells, but he said actual losses were $1.8 million, and he personally owes $1.1 million to the Internal Revenue Service.

Paying back the IRS made it difficult to pay bills, he said. Court records show the company's problem paying bills began earlier. An insurance company filed suit in 2013, as did a pharmacy, alleging Sells' nursing homes owed nearly $2 million.

A 2014 lawsuit alleged the nursing homes were $900,000 in arrears for therapy goods and services. Another 2014 suit sought $900,000 for food services.