Owners -- but not in charge

Owners -- but not in charge

October 01, 2009|By David Jackson | Tribune reporter

Bryan Barrish and Michael Giannini take pride in their Elgin nursing home, Maplewood Care.

"We've owned that facility for 17 years and have 203 beds in that facility," Barrish said, "and over that time we've had well over 1,250,000 patient-days."  

But when it comes to days like the one in January when a 21-year-old felon allegedly raped a 69-year-old woman, the complexity of Maplewood's business model allows Barrish to assert: "I have nothing to do with day-to-day operations at Maplewood Care and neither does Mike."

They are the owners who aren't in charge.

State records show Barrish and Giannini have an ownership or consulting role in 13 Illinois nursing homes. Each facility is run by a separate corporation, whose ownership is divided among family, business associates and trusts, state records show. Each corporation has a board of directors whose names are not public.

Each facility hires its own administrator to run day-to-day operations. For nursing home services from bookkeeping to dietary consulting, the facilities hire SIR Management Inc., a firm created 18 years ago by Barrish, Giannini and longtime nursing home partner Eric Rothner.

Attorneys for the three have said in court documents that SIR "manages" the homes, and three of the homes last year paid SIR a combined $1 million in "management fees," according to facility cost reports filed with the Illinois Department of Healthcare and Family Services.

But when the homes face lawsuits alleging negligence, Barrish said, SIR is "dismissed (from the suits) every time, because we are not management."

An attorney for Barrish and Giannini cautioned the Tribune against mentioning SIR in an article about the alleged rape at Maplewood Care.

"Any reference to SIR would be disingenuous, unfair and defamatory," Howard Hoffman said by e-mail. "SIR merely provides consulting services to many long-term care facilities and has no operational responsibilities as to any of them."

After a reporter noted that SIR's Web site said it "manages the operation" of nursing homes owned by Barrish and Giannini, SIR's site was changed.

"Maybe we've used the term inappropriately," Giannini told a reporter. "But the definition of the management was consultant. It wasn't as defined by Webster's dictionary."

SIR also figured in a painful episode that threatened the future of the two men's business.

In 2002, Giannini and Barrish paid a $2 million settlement to the U.S. Justice Department after pleading guilty to felony money-laundering charges. Authorities alleged that they joined a 1995 conspiracy to make false claims for incontinence supplies. Also pleading guilty was Salvatore Galioto, who was listed as an organized crime associate in a 1997 Chicago Crime Commission chart.

Barrish said the plea was "a business decision," asking: "Do we fight it and risk 2,000 employees, 2,000 residents and partners and their future or do we make this agreement and be able to survive?"

Federal authorities could have excluded the partners from participating in federally funded health care programs for five years, court records show. But the lead prosecutor wrote a letter citing their cooperation in the case and urging that they not be barred. The two men reached agreements in which they gave up operational control over most of their nursing homes for five years, and ceded their positions directing SIR Management Inc.

Court records show Barrish and Giannini's wives took their places on SIR's board. The men entered into oral employment contracts with SIR that enabled them to "be employed so long as ... each desired," their attorney wrote in 2006 court papers.

The partners said those years-ago events have no bearing on facilities they now partly own.

"This was an isolated incident," Giannini said. "We were asleep at the wheel."

 

Indeed!