Former Owner of Plainfield Nursing Home Pleads Guilty to Bankruptcy Fraud Charge

David B. Fein, United States Attorney for the District of Connecticut, announced that STANLEY RODOWICZ, JR., 56, of Wellington, Florida, waived his right to indictment and pleaded guilty today before Senior United States District Judge Ellen Bree Burns in New Haven to one count of bankruptcy fraud.

According to court documents and statements made in court, RODOWICZ was the owner and administrator of Village Manor Health Care, Inc. (“VMHC”), a corporation that operated a nursing home with approximately 90 beds in Plainfield , Connecticut. In February 2007, RODOWICZ authorized VMHC to file a voluntary chapter 11 bankruptcy petition in the United States Bankruptcy Court for the District of Connecticut. From February 2007 to March 2010, RODOWICZ operated VMHC as a chapter 11 debtor and debtor in possession, and maintained control over VMHC’s bank accounts, cash, accounts receivable and accounts payable. During the bankruptcy proceedings, RODOWICZ caused VMHC to file numerous documents with the U.S. Bankruptcy Court, including numerous motions for authority to use cash collateral. RODOWICZ knew that VMHC was only authorized to transfer or spend or pay its cash collateral in accordance with the cash collateral budgets once they had been approved by the Bankruptcy Court through the issuance of a cash collateral order. Each cash collateral order authorized VMHC to pay its “landlord,” which was a partnership also owned in part by RODOWICZ, a specific sum of money in payment of rent and certain escrows.

In knowing violation of the U.S. Bankruptcy Court’s cash collateral orders, RODOWICZ transferred VHMC’s money to its “landlord” in amounts in excess of what was authorized by the various cash collateral orders. Through this scheme, RODOWICZ embezzled more than $400,000 from the bankruptcy estate’s accounts. RODOWICZ also falsified the books and records of the nursing home during the bankruptcy proceedings to conceal the embezzlement.

After the fraud was discovered in March 2010, a chapter 11 bankruptcy trustee was immediately appointed by the bankruptcy court to operate the nursing home. VHMC remains in bankruptcy and has creditors claiming they are owed approximately $4 million.

Judge Burns has scheduled sentencing for December 14, 2011, at which time RODOWICZ faces a maximum term of imprisonment of five years, an order of restitution to repay the victims and a fine of up to $100,000.

This matter has been investigated by the Federal Bureau of Investigation with the assistance of the U.S. Trustee Program.

The U.S. Trustee Program is the Department of Justice component that promotes and protects the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the civil bankruptcy laws.

Members of the public can report suspected bankruptcy fraud via e-mail to USTP.Bankruptcy.Fraud@usdoj.gov.

In the District of Connecticut, the U.S. Attorney’s Office coordinates a Bankruptcy Fraud Working Group that includes representatives from the U.S. Attorney’s Office, the Office of the United States Trustee, the United States Postal Inspection Service, the Internal Revenue Service - Criminal Investigation, the Federal Bureau of Investigation, the United States Secret Service, and the Social Security Administration Office of the Inspector General.

This case is being prosecuted by Assistant United States Attorneys Ann M. Nevins.