John H. Durham, United States Attorney for the District of Connecticut, announced that Chaim Stern, 71, of Flushing, New York, waived his right to be indicted and pleaded guilty to embezzlement and tax offenses related to his operation of nursing homes in Bridgeport and Waterbury. According to court documents and statements made in court, Stern was the principal operator of the Bridgeport Health Care Center (“BHCC”), Bridgeport Manor, and the Rosegarden Health and Rehabilitation Center LLC (“Rosegarden”) in Waterbury, which were privately owned nursing and rehabilitation facilities. Between approximately 2011 and 2018, Stern stole approximately $4.1 million from the BHCC Pension Plan, over which he was the trustee, principally by diverting the money to a purported charity, called Em Kol Chai, which Stern controlled, as well as to himself and other entities. Also, in approximately February 2015, Stern misapplied $305,608.06 from BHCC Health Plan by diverting the money from a stop-loss insurance plan that was intended to pay for an employee health claim, and instead used it for other purposes, including Em Kol Chai, the operation of the BHCC, and for Stern’s personal use. In addition, from at least January 2017 through March 2018, Stern failed to, and caused BHCC and Rosegarden to fail to, pay over employment taxes it collected from BHCC and Rosegarden employees. And, from January 2017 through June 2018, Stern failed to, and caused BHCC and Rosegarden to fail to, pay BHCC and Rosegarden’s share of employment taxes. The total tax loss resulting from Stern’s conduct is $4,356,409.85.
