The state attorney general has opened an inquiry into the Rivington House matter, in which the city lifted a deed restriction on the former nursing home. Investigations were already underway by the NYC Department of Investigation and city Comptroller Scott Stringer.
According to the Wall Street Journal, subpoenas were sent out last week. At the moment, there are no other details available as to who received subpoenas or Attorney General Eric Schneiderman’s lines of inquiry.
The Allure Group paid $16 million to change the deed, which previously restricted the building at 45 Rivington St. to use as a not-for-profit health care facility. A consortium purchased the property for $116 million and announced plans for luxury condos in the former public school building.
UPDATED 6:32 a.m. According to reports, subpoenas have been received by executives of the Allure Group and James Capalino, a lobbyist who represented VillageCare, Rivington House’s original owner. Also served was Metropolitan Valuation Services, which did some work for the Allure Group. The firm’s chairman, Martin Levine, told the Journal that Allure wanted to see if a case could be made for a lower fee in exchange for dropping the deed restriction. Staff members from his company attended a meeting at the Department of Citywide Administrative Services.
The Times reported that the subpoenas were issued by the attorney general’s Medicaid Fraud Control Unit. “The unit’s involvement suggests that the focus of the inquiry into possible wrongdoing was the companies that received the subpoenas, and not the city,” noted the Times. Another inquiry is being conducted by the State Health Department. The Allure Group applied for state certification in 2014 and was granted permission to operate the nursing facility. But during an inspection at the end of last year, the nursing home beds were not occupied.
