2011-03-18 / Front Page

Medisys Big Busted On Bribery Charge

Locals Worry About Impact On PHC
By Howard Schwach

David Rosen David Rosen A healthcare bigwig, the CEO of the giant Medisys Health Network Inc. that sponsors the Peninsula Hospital Center locally, has been indicted by federal prosecutors for bribing three Brooklyn politicians to get benefits for the organizations he controls.

On Tuesday night, the healthcare conglomerate, which owns such hospitals as PHC, Jamaica Hospital Center, Brookdale University Hospital and Medical Center, and Flushing Hospital Medical Center, as well as several other smaller healthcare units around the city, removed David Rosen from his position as CEO for funneling money through shell companies and bribing State Senator Carl Kruger, among others.

The government prosecutors allege that David Rosen bribed Kruger, former Assemblyman Anthony Seminerio, who recently died in prison, and Assemblyman William Boyland “in order to obtain their support in state matters.”

From 1999 to September of 2008, Rosen is accused of paying bribes, disguised as fraudulent consulting fees to Seminerio, of about $40,000 a year. In total, Medisys paid Seminerio $390,000. From 2003 to September of 2008, Rosen is accused of having Medisys pay consulting fees of about $177,400, to Boyland and Seminerio for performing official state duties, the complaint alleges.

During the same time period, the federal complaint alleges, Medisys and Rosen paid some $1 million in bribes to Kruger.

In return for the bribes, the three advocated for Medisys and other healthcare companies that were also paying bribes during that time.

For example, because of Kruger’s advocacy for Medisys, the state discharged a $19 million loan and provided state funding for the company. In addition, Kruger urged state officials to let Medisys take over two other Queens Hospitals – St. John’s Queens and Mary Immaculate Hospitals.

In addition, the complaint alleges that Rosen hired the Hospice Company, a company in which Kruger has a financial interest, in order to gain favor with the Senator.

Olie Pederson, a spokesperson for Medisys, said that PHC does not deal with the Hospice Company for its facility.

Pederson issued a statement on behalf of Medisys on Tuesday morning.

“The boards of MediSys Health Network and Jamaica Hospital Medical Center today unanimously voted to appoint Bruce J. Flanz President and Chief Executive Officer of both organizations. MediSys is a not-for-profit corporation that is the sponsor of Jamaica Hospital Medical Center, Brookdale University Hospital and Medical Center, Flushing Hospital Medical Center, Peninsula Hospital Center, three nursing homes and a network of neighborhood family care centers.”

Rosen is charged with conspiracy to deprive New York State and its citizens of their legislators’ honest services, a charge that could bring 20 years in prison and a $250,000 fine.

PHC has been in the news recently for its financial problems and reports that it is close to bankruptcy.

Locals worry that the hit taken by Medisys might be the last straw that leads the company to allow PHC to go out of business.

“PHC has financial problems and its owner, Medisys, obviously has not only financial but public relations problems,” said one local who works at PHC and who asked not to be identified. “With all that’s going on, many of the employees feel that the entire hospital center is in jeopardy. That would be a tragedy not only for all the locals who work there, but for the community as well.”

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