The Atlanta Journal-Constitution had an incredible article about nursing home owner/operator Christopher Brogdon. Brogdon is a national player in the nursing home and assisted living industry, as well as being an owner of the J. Christopher’s restaurant chain. The 69-year-old businessman’s extravagant lifestyle was earned by misleading investors, neglecting vulnerable adults, and taking advantage of lax oversight by regulatory agencies.
His lifestyle includes a $5 million residence near the top of the St. Regis in Atlanta’s most elite addresses, and for leisure there’s the $2 million beach house on St. Simon’s Island. He owns multiple vehicles including a Lexus SUV, a BMW coupe, a Porsche Panamera and a King Air private plane worth $1.5 million.
The details of what happened and what took place inside some of his facilities offer an example of how the long-term care business can profit by taking advantage of both naive investors and elderly people who need 24-hour care.
“He is a con man who cheats investors at the expense of assisted living and nursing home residents,” said Florida attorney Jim Wilkes, whose firm filed a lawsuit this year accusing a bank of enabling Brogdon to carry out what it calls a massive healthcare scheme. “He’s got a history that goes back 30 years.”
Brogdon’s career has been marred, at several points, by charges of wrongdoing — including allegations of poor care to frail elderly people. Now there is a federal case involving fraud. The Securities and Exchange Commission accused him of fraud in a 2015 civil case. In the case of the Brogdon bonds, the SEC found that brokers and the bank involved in the deals failed to protect investors, as they were obligated to do, especially when it came to notifying investors of risks and of Brogdon’s failures on earlier projects. By failing to disclose problems, they paved the way for him to do more bond deals, the SEC found.
A court ordered that $89 million be paid to trusting investors in his nursing home or assisted living deals. Brogdon diverted bond cash for other purposes, the SEC charged, including moving money from one assisted living or nursing home project to another and funding his family’s high-end lifestyle. The SEC also accused brokers who sold the bonds of misleading investors — many of them retirees.
Between 1992 and 2014, he bought or renovated at least 60 nursing homes, assisted living facilities or retirement housing developments, according to the SEC’s complaint. Brogdon got money for his projects through bonds authorized by local authorities, private financing or banks. Brokers he had relationships with would sell the bonds, often to unsophisticated investors, bringing in cash for the projects and fees for themselves.
In a 1993 article with the headline “Hello, sucker,” Forbes magazine highlighted Brogdon’s bond deals, saying “sleazy brokers” enticed novice investors with high-yield bonds that they assumed were safe but, in fact, were shaky. In spite of the attention, the bond projects continued to get approved by the local authorities and sold by the brokers.
It didn’t take long before regulators questioned the quality of care at some facilities operated by Brogdon companies.
Nearly 20 years ago, a Florida prosecutor announced the arrest of five people and three corporations in a nursing home abuse case. When announcing the charges in 1999, prosecutor Rod Smith said the five people accused in the case will not “have anything to do with taking care of elderly people again,” according to news coverage of the arrests.
Brogdon was among those arrested and accused of racketeering, elder abuse, Medicaid fraud and theft. But the criminal charges against Brogdon and the others were dropped once a corporate consent order was reached, according to Florida records obtained by The Atlanta Journal-Constitution.
Since then numerous lawsuits have accused Brogdon of a pattern of opening long-term care facilities and enticing families to place loved ones in personal care homes — which are assisted living type facilities — that couldn’t provide the level of medical and personal care residents needed. The homes would be owned by shell corporations with no assets and would have no liability insurance as part of a scheme to avoid the costs of abuse lawsuits, the lawsuit said. Avoiding responsibility by playing a corporate shell game. To avoid paying verdicts for neglect and abuse, Brogdon would transfer the nursing home ownership to other related entities, all controlled by Brogdon, according to a lawsuit filed this spring by Wilkes’ firm.
“This man is a common thief,” said Wilkes, the Florida attorney. “He has stolen a couple of hundred million dollars and he has committed securities fraud and he has done it over and over and he gets away with it. At some point, the courts have to get outraged.”