New Jersey Alleges $122 Million Fraud by El Al Controlling Shareholder in U.S. Nursing Homes

A report by the New Jersey State Comptroller has accused Kenny Rosenberg, the controlling shareholder of El Al Airlines (48%), and his business partner Darryl Hagler of orchestrating a large-scale fraud scheme involving nursing homes under their ownership in the United States.
The findings are part of a comptroller’s report—not a criminal indictment or law enforcement investigation—and officials stressed that the affair has no connection whatsoever to El Al’s business activities.

Alleged Diversion of of Millions in Government Funds

According to the report, Rosenberg and Hagler allegedly diverted tens of millions of dollars from Medicaid-funded nursing homes into private accounts while the facilities themselves suffered from severe understaffing and substandard conditions. Investigators found that between 2021 and 2024, staffing levels at the facilities were roughly half of the required standard, with neglect leading to serious harm and, in some cases, deaths.

Two New Jersey nursing homes—Hammonton and Deptford—were allegedly used as conduits for transferring public funds to businesses controlled by the pair.

State investigators said that between 2019 and 2024, the two received $132 million in Medicaid-related funding, of which $92 million was transferred to companies and accounts under their control without disclosure.

Network of Related Companies Used to Move Funds

The investigation alleges that Rosenberg and Hagler used a wide network of affiliated entities to funnel money out of the nursing homes’ accounts. The two entrepreneurs collectively own 46 nursing homes and assisted living facilities across the United States.

New Jersey authorities said they will seek to recover $86 million they claim was improperly obtained through inflated expenses, along with $36 million linked to an alleged real estate scheme—bringing the total recovery sought to $122 million.

Prior Settlement in New York Over Similar Allegations

The New Jersey report comes roughly a year after Rosenberg and Hagler resolved similar allegations with New York City. In that case, they agreed to pay $8.8 million and committed to invest $35 million in several facilities they own in the state.
The lawsuit, filed in 2023, alleged the embezzlement of $83 million meant for resident care. As part of the settlement, the pair did not admit wrongdoing.

El Al Unaffected; Company Stock at 12-Month High

El Al’s operations remain entirely separate from the matter. The airline’s stock has surged 112% over the past year, giving it a market value of more than NIS 8 billion. Rosenberg’s stake is currently worth approximately NIS 3.6 billion.

Response From Centers Health Care

Centers Health Care, the nursing home chain owned by Rosenberg and Hagler, rejected the comptroller’s findings:

“The institutions mentioned in the report have high quality ratings from CMS, the federal agency overseeing Medicare, Medicaid, and nursing home quality standards. The auditor’s report ignores this and distorts facts and mandatory procedures. We will address all findings in the appropriate forum.”