SYRACUSE, NY — The owners of Van Duyn Center for Rehabilitation and Nursing, a 513-bed facility in Syracuse, will pay $12 million to settle allegations that they systematically diverted millions in Medicaid and Medicare funds away from resident care, resulting in dangerous understaffing, hospitalizations, and multiple resident deaths, according to an announcement by New York Attorney General Letitia James on August 25, 2025.
The settlement requires facility owners Efraim Steif and Uri Koenig to direct $10 million into a Resident Care Fund and pay $2 million in Medicaid restitution, according to the attorney general's office. The agreement also mandates the installation of both an Independent Health Care Monitor and an Independent Financial Monitor at the owners' expense, with non-compliance penalties of $5,000 per day.
According to the attorney general's investigation, after purchasing Van Duyn in 2013, Steif and Koenig extracted taxpayer dollars intended for resident care through a mortgage-based scheme on the property, charging the facility fraudulently inflated rental payments from 2015 through 2022, as reported by Healthcare Finance News. The owners also reportedly funneled more than $2 million in salaries to themselves for work that was never performed, according to the attorney general's findings.
The financial diversion allegedly resulted in severe understaffing that had devastating consequences for residents. According to the attorney general's office, one resident died by strangulation after her nightgown became caught on a door handle during an unassisted fall. Another resident was discovered deceased and already in rigor mortis, a condition investigators attributed to inadequate medication management and care. Additional residents were reportedly hospitalized with untreated infections, pressure wounds, and dehydration.
Family member Caitlan Pavlides spoke at the settlement announcement, describing how her aunt died at age 53 after staff at the facility failed to properly maintain a surgical wound from a brain procedure, as reported by WRVO Public Media. The resulting infection progressed to sepsis and necessitated a second brain surgery that caused significant brain damage, according to Pavlides' account.
The investigation also found that multiple residents were inappropriately discharged from the facility and left at social services offices without proper identification, according to Fingerlakes1.com.
Despite the severity of the findings, Attorney General James determined the owners' conduct "did not amount to criminal behavior," and no criminal charges were filed, as reported by WRVO. However, the attorney general's office indicated that further legal action would follow if the owners fail to comply with the monitors' recommendations.
Under the settlement terms, the owners are prohibited from selling or closing the facility for five years and must maintain staffing levels recommended by the Independent Health Care Monitor for at least two years beyond the settlement period, according to the attorney general's office. A $1 million penalty applies if the owners violate staffing requirements after the settlement term concludes.
This enforcement action represents the fourth major nursing home case brought by Attorney General James, whose office has now secured more than $70 million in total penalties and reforms at facilities statewide, according to Fingerlakes1.com. Steif and Koenig also hold ownership stakes in Pine Valley Center for Rehabilitation and Nursing in Spring Valley, New York, as reported by Westfair Communications.
CMS Inspection History
Federal inspection records paint a troubling picture of ongoing problems at Van Duyn that predated this settlement. The facility currently holds a 0-out-of-5-star overall rating from the Centers for Medicare and Medicaid Services — the lowest possible designation — with zero stars across all three measured categories: health inspections, staffing, and quality of care.
CMS records show 138 total deficiencies documented across 30 inspections. The facility's most recent federal inspection, conducted on April 18, 2025, resulted in multiple citations, including a Severity Level K deficiency — among the most serious classifications — for failing to promote and facilitate resident self-determination through support of resident choice. Level K indicates a pattern of deficiencies that caused actual harm or placed residents in immediate jeopardy.
That same April 2025 inspection also cited the facility for failing to honor residents' rights to a dignified existence at Severity Level H, indicating a pattern that caused actual harm. Additional deficiencies included failures to protect residents from wrongful use of their belongings or money, failure to allow appropriate self-administration of medications, and failure to provide a safe and homelike environment.
The deficiency patterns documented by CMS are consistent with the conditions described in the attorney general's investigation: a facility where financial extraction by ownership allegedly took priority over fundamental resident care obligations. Federal regulations require nursing facilities receiving Medicare and Medicaid funding to maintain adequate staffing levels and meet established standards of care, and CMS inspection ratings serve as one measure of ongoing compliance.
Ownership & Operations
Van Duyn Center operates as a for-profit limited liability company, according to CMS records. With 513 certified beds, it is among the larger nursing facilities in New York State. The facility currently houses approximately 498 residents, according to WRVO's reporting.
The ownership structure that enabled the alleged fraud — with Steif and Koenig controlling both the facility operations and the property through related entities — is a model that has drawn increasing regulatory scrutiny across the nursing home industry. The mortgage-based extraction scheme described by the attorney general's office illustrates how related-party transactions between operating companies and property-holding entities can be used to redirect funds that federal and state programs designate for direct resident care.
The fact that both owners maintain additional nursing home investments, including their stake in Pine Valley Center in Spring Valley, raises questions about whether similar financial practices may be present at other facilities in their portfolio.
Resources for Families
Families with concerns about care at Van Duyn Center or any New York nursing facility can contact the following resources:
- New York Long-Term Care Ombudsman Program: 1-855-582-6769 - National Elder Care Locator Hotline: 1-800-677-1116 - Long-Term Care Ombudsman Resource Center: https://ltcombudsman.org
The ombudsman program provides free, confidential assistance to nursing home residents and their families, including help with filing complaints, understanding residents' rights, and navigating the regulatory system. Concerns about immediate threats to resident safety should also be reported to the New York State Department of Health.