ST. LOUIS • How did conditions get so bad at a Festus nursing home last summer that the state needed to rescue 60 residents?
That question was finally answered in federal court on Wednesday. The owner admitted he stole more than $667,000 from Medicaid and spent much of it on strippers, gambling, pet care and country club fees.
Johnnie Mac Sells, 52, pleaded guilty on Wednesday in U.S. District Court to two counts of health care fraud. The accusations were first made public at the hearing. He could face 37 months in prison at sentencing, set for July 25. He also will have to pay back the money.
A Post-Dispatch investigation in September showed how Benchmark Healthcare, a nursing home on Highway TT, became a dirty and dangerous place as Sells, its president, faced a mountain of debt.
Bills went unpaid. The phones were shut off. Paychecks bounced. Trash piled up. Flies swarmed. And food deliveries stopped.
A patient advocate described the situation as “a disaster.”
Missouri state health officials went to court in July to put Benchmark into emergency receivership. They backed down when food deliveries resumed, but in a follow-up visit in August, inspectors found that four residents were not getting medicines they needed for congestive heart failure, epilepsy and schizophrenia because pharmacy bills had not been paid in months.
On Sept. 13, the state finally took the rare step of closing the nursing home and relocating 60 residents to other facilities.
In court Wednesday, prosecutors revealed that for three years starting in 2013, Sells stole a large portion of funds provided by Medicaid for Benchmark residents, jeopardizing their health. During periods of 2014 and 2015, Sells used Benchmark’s debit card to pay $185,000 at adult entertainment clubs and $15,000 on pet care. He also spent $4,500 at casinos and $12,000 at his country club.
He wrote company checks and made wire transfers totaling $439,000 into his personal accounts, separate from “the substantial salary that he was paid by Benchmark.” He also transferred $153,000 to a close relative.
He also wrote two company checks in August 2016 to pay a total of $3,500 in bail bonds. Sells was charged that month in St. Charles County with domestic abuse and sexual misconduct. According to prosecutors, he slammed his girlfriend through a glass coffee table and exposed his genitals to her 12-year-old son. A jury trial is scheduled for June 27. In an interview last year, Sells said that he “didn’t beat anybody.”
Sells appeared in U.S. District Court on Wednesday. In a calm voice, he acknowledged to Judge John A. Ross that he understood what he was doing by waiving his right to an indictment and trial. Ross indicated his sentence could be reduced somewhat by his cooperation.
Sells’ attorney, Scott Rosenblum, told Ross that his client struggled with drug and alcohol addiction but had been sober “for some time.”
Sells declined to comment as he left court. In a previous interview with a reporter he said he wished he had an answer to explain how conditions had gotten so bad at Benchmark.
There is now nothing left of the nursing home empire, Legacy Health Systems, established in 1938 in southeastern Missouri by Sells’ grandmother, Clara Sells.
The business had expanded into a $100 million company with 2,000 patients and 1,600 employees in 27 facilities across Missouri, Kentucky and Tennessee before its collapse.
In recent years, Legacy sold almost all of its assets or had them seized by creditors. The Festus location was one of three homes left in the company’s portfolio. At the time of the Benchmark closing, about 200 residents lived at its two remaining facilities in Sikeston, Mo., and Puryear, Tenn.
Johnnie Mac Sells’ son Ben, 26, and some other family members later bought the Sikeston home out of foreclosure; the Puryear home also has a new owner.