SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 24, 1996
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Healthcare Services Group, Inc.
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(Exact name of registrant as specified in its charter)
Pennyslvania 0-12015 23-2018365
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
2643 Huntingdon Pike, Huntingdon Valley, Pennsylvania 19006
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(Address of principal executive offices)
Registrant's telephone number, including area code: (215) 938-1661
N/A
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS.
On May 24, 1996 the United States Attorney for the Eastern District of
Pennsylvania publicly announced the filing of a civil lawsuit against the
Registrant and two of its executive officers. A copy of such announcement is
annexed hereto and incorporated by reference as Exhibit 99(a) to this Report.
The Registrant also issued a public announcement with respect to the
complaint on May 24, 1996, which is also incorporated herein by reference to
Exhibit 99(b) to this Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
EXHIBIT NO. EXHIBITS
99(a) Press release by the United States Attorney for
the Eastern District of Pennsylvania.
99(b) Press release by the Registrant.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HEALTHCARE SERVICES GROUP, INC.
Dated: May 29, 1996 By: /s/ Richard Hudson
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Name: Richard Hudson
Title: Vice President-Finance
and Secretary (Principal
Accounting Officer)
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PHILADELPHIA -- A civil false claims and money laundering complaint was
filed today (5/24/96) against 12 defendants charging them with involvement in
kickback scheme between a Huntingdon Valley, PA laundry supply firm and two New
Jersey nursing homes.
The complaint was announced by Michael R. Stiles, U.S. Attorney for the
Eastern District of Pennsylvania; Michael Littis, Regional Inspector General of
the Department of Health and Human Services; and Bob C. Reutter, Special Agent
in Charge, Federal Bureau of Investigation.
The complaint charges that HealthCare Services Group, Inc., of
Huntingdon Valley, a firm which supplies laundry services to nursing homes, paid
more than $400,000 in kickbacks to the owners of two New Jersey nursing homes to
induce the owners to keep their contract with the firm.
According to the complaint, the kickbacks were paid by Melvyn B. Mason
of Huntingdon Valley, PA, a HealthCare employee, to Nicholas Schwartz of
Oakhurst, N.J., Imre Lefkowitz of Highland, NJ, and Alex Lowinger of Long
Branch, NJ, owners and operators of the two nursing homes.
Because of the kickbacks, the complaint charges, the two nursing homes
filed false cost reports to Medicare and Medicaid which failed to disclose the
kickbacks.
In the complaint, the government seeks damages against various
defendants under the False Claims Act, which allows triple damages plus $5,000
per false cost report; the Anti-Kickback Act, which provides for a penalty of
twice the kickback together with a $10,000 penalty for each kickback, and the
Money Laundering Statute, which provides for a penalty equal to the amount of
laundered money in each transaction.
Also named as defendants in the complaint are:
o Cedar Oaks Care Center, Inc., a nursing home located at 1311
Durham Ave., Plainfield, NJ.
o Edison Estates, Inc., a nursing home at 465 Plainfield
Ave., Edison, NJ.
o Howard Sukoff, an administrator of Edison Estates.
o Morris Weisel, Edison, NJ, the administrator of Cedar
Oaks and son-in-law of Imre Lefkowitz.
o Jeffrey Schwartz, Edison, NJ, son of Nicholas Schwartz
and the administrator of Edison Estates.
o Thomas A. Cook, Cherry Hill, NJ, president of HealthCare.
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o Daniel P. McCarthey, Richboro, PA, chairman of the board
of HealthCare.
The scheme, which the complaint charges began in or about 1987, called
for kickback payments to be made through false invoices, for billings to be made
from New York corporations, and for submitting fraudulent cost reports to the
Medicare and Medicaid programs which failed to disclose these kickbacks, the
complaint charges.
The case was investigated by John Vella, an agent from the Office of
Inspector General of the Department of Health and Human Services, the Federal
Bureau of Investigation. The Securities and Exchange Commission, Office of
Enforcement also provided substantial investigative assistance.
The case is being handled by Assistant U.S. Attorney James G.
Sheehan.
PRESS RELEASE
Huntingdon Valley, PA, May 24, 1996. Healthcare Services Group, Inc. (HCSG) (the
"Company") was informed today through a public announcement by the United States
Attorney for the Eastern District of Pennsylvania that it and two of its
officers had been named as defendants in a civil lawsuit by the United States
Attorney seeking civil penalties.
The complaint relates to payments of approximately $400,000 made by the
Company between June 1988 and January 1992, which were previously investigated
and reported upon by the Company in its Form 10-K for the year ended December
31, 1991. As previously reported by the Company, information regarding this
matter was voluntarily furnished to the United Stats Attorney's Office in New
Jersey in May and November 1992, and such payments were recovered by the Company
in November 1992.
The Company denies any wrongdoing on its part or its officers and
intends to vigorously defend the suit.
