Dean allegedly diverted money intended for creating a safe evacuation site for nursing home residents into his personal accounts, leaving both the facilities and their residents ill-prepared for the impending storm.
Bob Dean Jr. and several of his companies have reached an $8.2 million consent judgment to settle claims that they breached the National Housing Act of 1934 (NHA) by misusing the assets and income of four nursing homes in Louisiana, both prior to and following Hurricane Ida's impact in August 2021, according to a press release by the Justice Department.
The nursing homes involved, all owned and operated by Dean and his companies, had loans insured by the Federal Housing Administration (FHA). These facilities include Maison De’Ville Nursing Home in Houma, Maison De’Ville Nursing Home in Harvey, Maison Orleans Healthcare in New Orleans, and West Jefferson Health Care Center in Harvey.
“As the residents of Louisiana well know, hurricanes and natural disasters can devastate people’s lives,” said U.S. Attorney Ronald C. Gathe Jr for the Middle District of Louisiana. “Nursing home operators like Mr. Dean have an obligation to protect their residents during such events, particularly if they are going to rely on federal programs to support or sustain their businesses. This settlement will ensure that those individuals charged with caring for our community’s most vulnerable residents take seriously their duty to have proper safeguards and plans in place to avoid tragedies like the one we saw in Independence, Louisiana, after Hurricane Ida.”
The FHA, a division of the Department of Housing and Urban Development (HUD), offers mortgage insurance for loans that finance residential care facilities like nursing homes, in accordance with the NHA. This insurance encourages lenders to provide loans to such facilities by safeguarding them against losses from borrower defaults.
To qualify for FHA-insured loans, recipients must sign regulatory agreements with the FHA, stipulating that the assets and income of the nursing home can only be utilized for necessary and reasonable operational expenses. The NHA also allows the United States to reclaim double the amount of any assets and income from FHA-insured nursing homes that have been improperly allocated or misused.
“Upon learning of the callous manner in which residents of nursing homes owned by Bob Dean were treated during Hurricane Ida, HUD referred this matter to the Justice Department to investigate Dean’s alleged misuse of HUD’s funds,” said General Counsel Damon Smith of the HUD. "By working with our partners at the Justice Department and supporting this action, HUD reaffirms that it takes the obligations of nursing homeowners seriously.”
In 2023, the government took legal action against Dean and his associated companies, claiming they mismanaged the funds and resources of nursing homes. The United States contended that in the five years prior to Hurricane Ida, Dean diverted money intended for creating a safe evacuation site for nursing home residents into his personal accounts, leaving both the facilities and their residents ill-prepared for the impending storm.
Consequently, when Hurricane Ida struck in August 2021, the residents were forced to endure the hurricane in a cramped and unsuitable industrial warehouse owned by Dean through one of his corporate entities. Reports indicated that at this makeshift evacuation center, the residents suffered in poor conditions and received insufficient care, prompting the Louisiana Department of Health to evacuate them from Dean's warehouse and revoke the licenses of his nursing homes.
“By the time Hurricane Ida bore down on the vulnerable nursing home residents at properties operated by Mr. Dean, he illegally skimmed funding from those facilities and failed to maintain sanitation and adequately equip the warehouse he designated as the evacuation site,” said HUD Inspector General Rae Oliver Davis. “He unfairly enriched himself while residents under his charge endured horrid conditions including insufficient food and medical care. HUD OIG will continue to work with our law enforcement and prosecutorial partners to hold accountable those who misappropriate funds at the expense of vulnerable populations.”
Additionally, the United States alleged that after the hurricane, Dean misused the nursing homes' income and assets, spending them on personal items such as antiques, firearms, and vehicles instead of maintaining the facilities.
“This settlement demonstrates the department’s continuing commitment to holding accountable those who put their own financial gain over the needs of our nation’s seniors,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “We will continue to take action to protect the integrity of federal programs designed to ensure that nursing home residents, who are among our most vulnerable citizens, receive appropriate care.”
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