New Ownership Group for South Jersey Nursing Home Blocked from Medicaid Due to Risks of Fraud, Waste, and Abuse   

OSC denied Medicaid participation to operators planning to buy South Jersey Extended Care, historically the worst-rated nursing home in NJ.  

PRESS CONTACT: Pamela.Kruger@osc.nj.gov

TRENTON–A review by the Office of the State Comptroller finds that a group of nursing home operators proposing to buy a troubled nursing home, South Jersey Extended Care (SJEC), pose “an unacceptably high risk of fraud, waste, and abuse” and therefore cannot participate in New Jersey Medicaid. 

Nearly a year ago, OSC’s Medicaid Fraud Division had suspended from Medicaid Michael Konig and Steven Krausman, brothers-in-law who managed and controlled SJEC after finding millions of Medicaid dollars had been funneled out of the facility into their private businesses and nonprofits. OSC also issued notices of intent to suspend SJEC, the state’s worst-rated nursing home, and its straw owner, Mordechay Weisz. 

In the 15-page denial letter to the new proposed ownership group, Bridgeton SNF, LLC, OSC laid out findings that showed they lacked the “the requisite responsibility, accountability, and candor” to expand their presence in the New Jersey Medicaid program. OSC found undisclosed financial ties to Konig, a poor track record at other nursing homes, and “layers of trusts and LLCs” – which seemed to be designed to obscure who would actually own and control SJEC. 

“There was not one red flag – there were several,” said Acting State Comptroller Kevin Walsh. “When the owner/operator of New Jersey’s worst nursing home tries to sell to a group that tries to hide who is responsible and accountable, the state has an obligation to say no.” 

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.)  

As part of his Medicaid application, Fogel provided signed documents stating he is the managing partner, with a 30 percent share in the entity that would own SJEC. Yet Fogel told OSC he did not know the purchase price of SJEC, didn’t know who would know, and could not recall even signing the documentation he submitted to OSC, lending the impression he was not actually in control.  

Fogel signed an agreement to pay $2 million plus interest to a Nebraska nonprofit, Auschwitz Memorial House of Prayer, which is under Konig’s control. Another $2.75 million was also wired to this same nonprofit from Bridgeton SNF for the rights to the SJEC lease.  Fogel was unable to explain why SJEC had transferred the lease rights to Konig’s nonprofit when Konig is barred from receiving any Medicaid funds. 

OSC’s review finds that the trust hid the real owners – Eliezer Scheiner, Tyzi Lichtschein and Eliyahu Kohn. The three men, along with Fogel, also were part of the entities that bought Oceana Rehabilitation and Nursing Center. Now called Fountain Springs at Cape May, that facility was also previously owned by Weisz and controlled by Konig and Krausman.  

Reviewing mortgage and other financial documents associated with Fountain Springs, OSC found the new owners borrowed $14.42 million to finance the purchase of both the operations and the property and passed these costs onto New Jersey Medicaid by charging inflated “rent” payments to a related entity. In other words, they set rent not based on the cost or fair market value of the property alone – as required – but instead based on the payments they owed on their bundled loan. 

When OSC reviewed the track record of the prospective owners, OSC found that one or more were linked to 93 other facilities in Texas, Florida, Nebraska, New York, Pennsylvania, and Georgia, and most of these facilities were among the lowest quality nursing homes in their respective states.  

Under federal law, OSC is required to assess whether providers should be permitted to participate in the Medicaid program. The prospective owners of SJEC have the right to legally challenge OSC’s decision. The New Jersey Department of Health determines whether a transfer of ownership can occur, though most nursing homes rely on Medicaid and cannot operate without Medicaid funding. 

Read OSC's denial letter.