Category 5 Records President and CEO Raymond Termini is under investigation on charges he diverted Medicaid funds from the nursing homes he runs to finance his Nashville record label and other ventures unrelated to health care.
Termini is the chief executive of Haven Healthcare, a Connecticut company that runs 25 nursing homes in New England and has been fined for poor patient care more than 45 times in three years by state and federal health agencies.
Connecticut Gov. M. Jodi Rell ordered a state review of Haven Healthcare to be complete by December 1st and said that the state may be forced to take over Haven’s 15 Connecticut nursing homes to ensure patients receive proper care.
The next day, Haven Healthcare Corporation, which also runs clinic and medical supply companies, filed for voluntary bankruptcy.
The company’s debts include $13.7 million to Omnicare Value Health Care, which provides pharmaceutical care to the elderly, nearly $600,000 to Connecticut’s state tax department, $400,000 in utility bills to Connecticut Light and Power and taxes in Vermont and Rhode Island. The company is asking for protection from its debts while it restructures. Category 5 Records is not included in the bankruptcy filings.
Duke Cooper of Quantum Management, manager of Category 5 artist Travis Tritt, told Pollstar that if the allegations are true, Tritt is prepared to take legal action against Termini to protect his interests, if necessary.
Cooper said that most importantly, he wanted to "extend our concern for the folks in the health care homes up in Connecticut. We really want them to know that Travis’ prayers are with them."
"Our initial reaction was shock and dismay that these poor folks in Connecticut are not getting the care that they’re supposed to," Cooper said.
He added that because Tritt is a longtime spokesman for the Disabled American Veterans, the issue hit especially close to home.
"Much like the vets, these are folks whose care has been entrusted to others, and so it’s an especially sensitive issue for Travis to hear that not only have folks not been cared for in the way they were supposed to, but that perhaps they weren’t cared for because the people entrusted with their care were diverting funds to a record company involving Travis."
Cooper said they have had business difficulties with the label but that when he read about the allegations against Termini, it was the first he had heard about any issues regarding the nursing homes.
"If, in fact, that we had heard the slightest of complaints, we would have never entered into a record contract with Ray," Cooper said.
Termini didn’t return a call requesting comment but was quoted saying he was upset by what he called "lopsided" media reports and angered at the governor’s actions.
"I’m confident that when they’re done concluding their review, they’ll come to learn what our resident families already know – that we provide outstanding and quality care," he said November 19th.
Termini admitted that he used assets from Haven Heathcare, which came from refinancing some of the company’s properties, to finance the record label and buy a house but that the company didn’t misuse any Medicaid or Medicare funding.
In a statement, Termini said, "Haven Healthcare has taken the extraordinary step of filing for Chapter 11 protection in federal court to protect our company, our staff, and most importantly the thousands of patients and residents that we care for each day."