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Attorney General Lockyer Announces Arrest of Nursing Home Operator in Connection with Alleged Bribery of Los Angeles County Facilities Inspector

Owner Told Confidential Informant Other Local Health Agency Employees on the Take
Friday, June 2, 2006
Contact: (415) 703-5837

(LOS ANGELES) – Attorney General Bill Lockyer today announced the state Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA) has arrested the owner of six skilled nursing facilities in Southern and Central California in connection with the alleged bribery of a nursing home inspector for the Los Angeles County Department of Health Services (LADHS).

“In my seven years as Attorney General, I have seen few more disturbing cases of public trust betrayed and gross abuse of the elderly who cannot defend themselves,” said Lockyer. “The owner of these homes lived in luxury on the taxpayers’ dime while the senior citizens she was paid to care for lived in squalor. Our investigation in this case will continue. I hope the owner’s claims of having a cadre of public employees secretly on her payroll prove to be false bravado. But if they are not, we will apply the full force of the law.”

Marlene Zerna Robertson, 62, of Bradbury Estates, owner of MZR, Inc. (MZR), was arrested Thursday and booked in Los Angeles County jail on five counts of bribery and one count of conspiracy to commit bribery. Along with Robertson, BMFEA agents arrested two co-conspirators: Isidra Abacan Agulto, 54, of Glendale, corporate administrator of MZR; and Josemar Aberin Mercado, 49, of Bradbury Estates. Agulto was booked on five counts of bribery and one count of conspiracy to commit bribery, and Mercado was booked on one count of conspiracy to commit bribery.

Following the arrests, BMFEA agents late Thursday completed execution of search warrants at the homes of Robertson and Agulto, MZR headquarters in Los Angeles, as well as MZR-operated skilled nursing facilities in Los Angeles and Pasadena. Details about cash, property or other items seized during the searches will be kept confidential pursuant to the warrant filed under seal in Los Angeles County Superior Court.

The arrests came in connection with $7,000 in alleged bribes paid by Robertson to an LADHS facilities inspector working with BMFEA as a confidential informant. The payments were made from December 24, 2005 through April 4, 2006. The LADHS employee contacted BMFEA agents following the first payment of $500 cash, which came December 24, 2005 in a holiday card from Robertson that Agulto allegedly gave to the employee. After contacting BMFEA agents, the LADHS inspector agreed to become an informant and received an additional $6,500 in alleged bribes from January 2006 through April 4, 2006.

In addition to the monetary payments, Robertson allegedly gave the informant an $800 Prada purse, and offered to provide the LADHS employee paid vacations to Europe, as well as a Lexus or Mercedes.

In return for the payments, the LADHS employee was supposed to alert Robertson and Agulto to any upcoming LADHS inspections, or any inquiries or potential investigations by BMFEA. Under the guise of “consulting,” the payments were intended to buy other services for Robertson and MZR, Inc. Robertson and Agulto allegedly told the informant not to worry about participating in the scheme because the informant was not alone. Robertson had other LADHS employees on her payroll, the informant allegedly was told, including some at the managerial level.

The BMFEA criminal probe originated with its September 2005 “Operation Guardians” inspection of MZR’s Huntington Healthcare Center, located on Huntington Drive in Los Angeles. Established by Lockyer and led by his office, Operation Guardians is a multi-agency task force which conducts surprise, on-site inspections of California's 1,400 skilled nursing facilities. One Operation Guardians inspector called MZR’s Huntington center “the worst they have seen in a skilled nursing facility,” according to the September 2005 inspection team report. Among the more than 40 health and safety violations found at the facility, the worst included:

Residents wearing filthy clothes, soiled with urine and feces; a resident with an open head wound left unattended; rodent droppings in the pantry where residents’ food was stored and improperly exposed; pigeon droppings in the residents’ dining room; medication improperly stored and administered; inadequate medical record-keeping; and highly irregular practices regarding use of residents’ trust accounts.

Following the Operation Guardians inspection, the BMFEA launched an investigation into possible criminal elder abuse at the Huntington facility, while the LADHS was called in to clean up conditions and protect residents. During the course of the BMFEA investigation, the LADHS inspector contacted BMFEA agents and told them about communications the inspector had with Agulto regarding MZR’s plan to correct the egregious violations. (LADHS conducted its own inspection following the Operation Guardians inspection.)

The LADHS inspector also asked Agulto about reports that MZR hired LADHS employees as “consultants” to perform work outside the scope of their job duties. Agulto asked the inspector if the inspector was interested in becoming a “consultant.” Around December 23, 2005, Agulto contacted the inspector and said Robertson wanted to give the inspector a holiday card, which Agulto delivered with the $500 inside on December 24, 2005. The LADHS inspector then agreed to become a confidential informant for BMFEA.

In addition to the facilities in Los Angeles and Pasadena, MZR operates four other homes in Compton, Fontana, Fresno and Hemet. Combined, the six facilities have 530 beds. From 2004 through the present, Robertson and MZR have received $44.26 million in payments from Medi-Cal.

To help protect loved ones from abuse and choose a high-quality skilled nursing facility, read “A Citizen’s Guide to Preventing and Reporting Elder Abuse,” available on the Attorney General’s web site at www.ag.ca.gov/bmfea/publications.php

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