The US Attorney’s Office has charged Antonio L Giordano and John Montecalvo with equity skimming in violation of federal housing law governing three nursing homes that they controlled. An information alleges the Giordano and Montecalvo made about $780,000 in unnecessary payments on behalf of the nursing homes when the homes were either in default of federally backed mortgages or were operating in a “nonsurplus cash” position.

The Office of the United States Attorney and Kenneth Donohue, Inspector General for the Department of Housing and Urban Development, Office of Inspector General, jointly announce a one-count information, which was filed on June 8. Giordano and Montecalvo were arraigned today before Magistrate Judge Lincoln D Almond in US District Court, Providence, Rhode Island, pled not guilty and were released on unsecured bond.

According to the information, mortgage for the three nursing homes, Coventry Health Center, Mount Saint Francis Health Center and Hillside Health Center, were insured by the US Department of Housing and Urban Development. The information alleges that, during a time when either the mortgages were in default or when the nursing homes were in a “nonsurplus cash position,” Giordano and Montecalvo used nursing home income to make $780,539 in payments to My Place, Inc., payment that, according to the information, were not reasonable and necessary for the operation of the nursing homes.

An information is merely an allegation and a defendant is presumed innocent unless and until proven guilty. Upon conviction, the maximum penalty for equity skimming is five years imprisonment and a $500,000 fine.

Auditors and criminal investigators for the Department of Housing and Urban Development conducted the investigation that led to the information. The Federal Bureau of Investigation provided assistance. Assistant US Attorney Andres J Reich is prosecuting the case.

News Release

US Department of Justice

United States Attorney

District of Rhode Island

June 12, 2006