Troubles hit Maryland group home for disabled children

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Troubles hit Maryland group home for disabled children

Three weeks later, state lawmakers gathered to discuss findings of a Baltimore Sun investigation that revealed long-standing problems with the company that ran the troubled Anne Arundel facility. One lawmaker asked regulators if the children’s new homes were better managed.

“As far as I’m aware, we’re certainly comfortable with the state of those providers,” Maryland Health Secretary Dr. Joshua Sharfstein told the two dozen legislators. “This situation has led me to ask the inspection office to make sure, to take a much closer look.”

But The Sun’s ongoing examination shows that the new homes, run by Second Family of Landover, have had their own problems — including neglect and abuse incidents that led to three employees being fired this year, before Sharfstein spoke. Two of those employees had hit and kicked a mute autistic child, according to a state inspection report.

State officials say Second Family, which has been awarded about $69 million in state contracts since 2002, has generally complied with health and safety regulations. They also say they are still reviewing its performance “to identify new ways to promote high-quality services.” After the review they plan to make recommendations to the General Assembly to strengthen oversight of all group homes for disabled foster children who require around-the-clock nursing care.

Advocates for foster children say such a review is overdue.

“These children can’t speak for themselves,” said Joan Little, chief attorney for Maryland Legal Aid Bureau’s Baltimore child advocacy unit. “Once you know there’s been a breach of confidence, the state shouldn’t rely on the reporting of the

[providers]. They should be digging deeper.”

The Sun’s examination of inspection, police, licensing and other reports obtained through Maryland Public Information Act requests found:

•In late January, two Second Family employees were captured on video slapping, kicking and pushing a “non-verbal” autistic child, an inspection report shows. After the workers were terminated, state regulators issued a citation to Second Family. Then, on July 16, another employee was terminated for an incident in which neglect resulted in a child’s injury, state records show.

These children can’t speak for themselves. Once you know there’s been a breach of confidence, the state shouldn’t rely on the reporting of the [providers].
– Joan Little, chief attorney for Maryland Legal Aid Bureau’s Baltimore child advocacy unit
•Half of Second Family’s group homes were owned by its three top executives even after a state rule prohibited lease-back deals as of January 2008. The properties were eventually sold to a Bowie firm with ties to the charity. After The Sun informed state officials about the real estate deals, the matter was referred to the Health Department’s inspector general to “determine whether there is a violation of the regulation,” an agency spokesman said.

•In June, the state approved a Second Family budget that boosted salaries — the biggest raises went to three top executives — while maintaining decreased spending on food, clothing and other personal expenses for disabled foster children living at the nonprofit’s homes. The charity acknowledged that spending on some personal expenses was below state guidelines.

•Second Family’s executive director, Joseph Labule — who earned $155,343 at the nonprofit last year — pleaded guilty in 2001 to theft for stealing $25,000 in workers’ compensation pay. He received a one-year suspended sentence and repaid the money seven years later after a state agency garnished his wages. Labule did not disclose the conviction, as required by state rules, when Second Family applied for a $25 million state contract last year.

Second Family executives did not respond to requests for comment, but Kimberly Tarver, a lawyer for the organization, said the state contractor has abided by all state rules and regulations.

None of the charity’s executives was personally benefiting from real estate deals, she said, and the nonprofit was reviewing whether Labule’s conviction had been expunged. She also said spending cuts were driven by a reduction in the number of children Second Family was serving.

Questions about state oversight of group homes for disabled foster children arose this summer, after The Sun revealed years of problems at LifeLine, formerly Maryland’s second-largest provider.

The Sun investigation showed that the state awarded contracts worth millions of dollars to LifeLine despite numerous issues — problems with medical care, a founder imprisoned for arson, unpaid taxes and police reports of abuse and neglect unknown to regulators.

The state moved the children after it determined that a child at LifeLine’s group home in Anne Arundel County was receiving inadequate health care. Damaud Martin, who was from Baltimore, died July 2, a day before the last of the children was removed.

State and local authorities continue to investigate his death, which has been ruled a homicide. Last week, the state medical examiner ruled that Damaud’s death was caused by complications from cerebral palsy and past head trauma — conditions stemming from abuse suffered more than six years ago, well before he arrived at LifeLine’s group home.

Last year the state Board of Public Works, which includes Gov. Martin O’Malley, awarded a total of $191 million in contracts for 794 group home beds, including those for foster children whose disabilities leave them entirely reliant on machines to breathe and eat. The group homes are only paid for beds that are occupied.

Of that amount, the state authorized $35 million for two-year contracts with Second Family, LifeLine and two small operators to provide 62 beds for disabled foster children in apartments or homes with around-the-clock nursing care.

With LifeLine’s closure, Second Family is now authorized to oversee nearly 85 percent of the beds approved last year. Its 10 group homes for children are located in Capitol Heights and Bowie, state records show.

Advocates acknowledge that moving medically fragile group home residents is not the best option — it can be physically dangerous and mentally taxing for juveniles who have little stability in their lives. And with only three providers in Maryland, regulators should do more to improve oversight because there are limited alternatives for the children, advocates say.

Advocates said The Sun’s revelations about LifeLine and Second Family illustrate lax state oversight that they have seen for years, even as the state has significantly reduced the number of foster children in group homes by emphasizing policies and programs that try to keep the children with their families.

“You’d think with there being so few group homes left [regulators would] know exactly what’s going on,” said Melissa Rock, child welfare director for Advocates for Children and Youth.

Second Family was founded in 1998 by Labule’s wife, Shilda Frost Labule, who serves as president. Her sister, Marion Hailey, is clinical coordinator. Together the three registered nurses are the charity’s top-paid employees — earning $488,000 for the year ending June 30, 2013, tax records show.

Unlike the situation with LifeLine, state inspection reports do not indicate problems with medical care at Second Family, according to documents the state has released under the Public Information Act. Some inspection reports, including those from 2013, have not yet been released.

Reliance on self-policing

Sharfstein and state Secretary of Human Resources Ted Dallas told lawmakers in July that their regulators need to improve oversight of health care providers to ensure that management problems do not jeopardize care. They are working with lawmakers to develop intermediate penalties that fall between written citations and the extreme step of closing facilities and transferring children.

In an Aug. 28 letter to state Sen. Joan Carter Conway, a Baltimore Democrat who called for the July briefing about LifeLine, Sharfstein wrote that his department is reviewing all of its annual inspections, complaints and self-reported incidents for Second Family and the two smaller providers. He added that the multiple inspections over the years demonstrate his agency’s “close oversight” to “protect the health and well-being” of the children.

When testifying before lawmakers, Sharfstein said regulators rely on providers to police themselves.

“It’s not our job to inspect quality. The quality has to come from the providers,” he said at the briefing. “And so we have expectations for what they do when they see a problem. Problems happen. But we want to see that they have identified it, they’ve studied it.”

But advocates have said the state relies too heavily on self-reporting and some lawmakers called for more surprise inspections, rather than the scheduled visits by inspectors from Sharfstein’s Office of Health Care Quality.

In inspections of Second Family’s group homes for children in 2011, 2012 and 2014, regulators cited the nonprofit 118 times for various breaches of state rules. Inspectors examined records related to 24 of the 112 children who lived there during those years. State regulators did not conduct an annual inspection in 2013 but did investigate complaints and incidents reported by Second Family that year.

The formal inspections cited Second Family for a range of issues. For example, the charity could not show that it had trained many of its employees in “approved forms of discipline,” and in 2012 it was cited for failing to report an “abuse/neglect” incident that resulted in an emergency room visit for a “severe injury.” Inspectors cited Second Family this year for not ensuring that “all medicine which is prescribed by a doctor is always available.”

The most serious incident in the reports was the Jan. 26 abuse of a child whom a Prince George’s County police report described as being diagnosed with “severe autism and is non-verbal.”

“A staff person pushed the individual and then kicked the individual on his lower leg,” the state health inspector wrote after reviewing video of the incident. “This same staff person hit the individual on his back and shoulder with an open hand.

“A different staff person pushed the individual and hit him multiple times. On the same day, later in the tape this same staff person was observed sleeping in the living room on a large ball. During this time the children were also unsupervised.”

Both workers were terminated by Second Family, according to the state’s inspection report. Shilda Labule, the nonprofit’s president, declined to answer questions when reached by phone. Tarver, the organization’s attorney, confirmed the inspection report’s findings.

The state report cited Second Family for violating regulations prohibiting such abuse and accepted its response to “continue to monitor and supervise staff” and “review the Abuse and Neglect Policy every six months.”

It’s unclear when Second Family learned of the abuse. Such incidents are supposed to be reported to regulators within 24 hours after providers learn of them. State officials said Second Family became aware of the incident while reviewing surveillance video on Jan. 31, five days after the abuse, and properly reported it to an inspector conducting a visit that day. A police report, however, states that the incident had been reported to child protective services on Jan. 28, three days earlier.

Nancy Pineles, managing attorney for the Maryland Disability Law Center, which is formally alerted to such incidents along with regulators, said the incident had still not been logged into the state database nine months later. She also criticized the way the issue was addressed by state regulators, saying, “After one individual was victimized by more than one staff, reviewing the abuse and neglect policy every six months is not an adequate response.”

The Legal Aid Bureau’s Little said that after such a serious incident, regulators should have placed monitors at the homes and checked videos every month.

Advocates also questioned the Prince George’s County Police Department’s handling of the incident.

The detective who watched the videos reported a different version from that of the state inspector. In the police report, the detective wrote that he “observed one of the workers smack the victim on the back of the head with an open palm one time. This investigator did not find the open palm strike to meet the criteria of physical child abuse.”

A state database shows Second Family has reported 11 incidents this year, including one in July in which an employee was terminated for neglect that led to a child’s injury. The state has not yet provided details about those incidents except to say they were all “triaged and investigated, as appropriate,” according to a Health Department spokesman.

Conflict of interest

Some Second Family executives have had an interest in properties used by the charity, a conflict of interest that the state forbids.

A Sun investigation in 2005 revealed that many executives and board members of group home operators — including the Labules and Hailey — were earning rent from the homes. To eliminate “any circumstance which would create a conflict of interest, personal or financial,” the state adopted a new rule prohibiting such arrangements, according to the Dec. 23, 2005, Maryland Register.

Employees and board members of companies licensed by the state’s developmental disabilities agency — including Second Family and Second Family Adult Homes — were prohibited from owning property “that is leased back to the licensee,” the regulation states. The state gave contractors until Jan. 1, 2008, to abide by the new rule.

Shilda Labule owned three of Second Family’s group homes and Hailey owned one until January 2009. The sisters sold the properties to a Maryland company called MJ&S Enterprises. Joseph Labule owned another home, which he also sold to MJ&S Enterprises in August 2008. For the fiscal year ending June 30, 2008, Second Family spent $311,517 on “occupancy,” which includes rent and utilities, tax records show. For the year ending June 30, 2009, the charity spent $402,992.

Tarver said Second Family does not pay rent on property owned by any of the charity’s executives. She said the Labules and Hailey are not shareholders of MJ&S Enterprises. In addition, she said, the corporate director of MJ&S Enterprises, Charles Ekoko, is not a Second Family employee.

Ekoko is, however, a board member of Second Family Adult Homes, a for-profit arm that is a state-licensed contractor providing residential services to disabled adults. He did not respond to repeated requests for comment.

State officials began looking into the real estate transactions last month, after The Sun alerted them to connections between MJ&S Enterprises and Second Family.

For example, MJ&S Enterprises owns a sixth Second Family group home in the 1400 block of Lancaster Lane in Bowie. State real estate ownership records filed with the Department of Assessments & Taxation for the house show that the mailing address listed for MJ&S Enterprises is a property owned by Shilda Labule and Hailey. The property tax bill for the Lancaster Lane house is mailed to the same property owned by the sisters, according to Prince George’s County tax records.

MJ&S Enterprises paid $1.1 million to Shilda Labule for her three properties, $402,000 to Joseph Labule for his house and $371,000 to Hailey, mostly through bank loans, real estate records show.

Sandra Miniutti, vice president of Charity Navigator, a national organization that rates charities, examined Second Family’s tax records at the request of The Sun. She said in an email that there is no indication the charity reported in 2008 it was paying rent on properties that its executives owned. None of the organization’s IRS forms listed such an arrangement in a section that asks for such information, she said.

The sales of the homes also were not recorded on an IRS form detailing any business transactions that personally benefited executives or board members.

“This definitely does not pass the ‘smell test,'” Miniutti wrote.

The Internal Revenue Service monitors the tax-exempt status of charities to make sure they are not operating for the personal benefit of executives. Experts in the field of nonprofits said the rental income, proceeds from real estate sales and salaries from an affiliated for-profit entity such as the adult homes company could call into question Second Family’s tax exemption.

“It is not consistent with best practices to have nonprofit leaders ever profit personally from the charitable activities of their organization,” Greg Cantori, executive director of Maryland Nonprofits, said when asked about Second Family’s operations.

Questionable spending

State inspections have raised no issues with Second Family’s finances, but child advocates raise concerns about the charity’s spending patterns.

The state approved a $9.2 million spending plan for Second Family in the 2014 fiscal year, which ended June 30. That was a nearly 14 percent increase from the $8.1 million the state paid in fiscal year 2013. The biggest increase went to salaries and benefits, which jumped 18.5 percent.

Meanwhile, spending on food, clothing and other personal needs for the children was cut 69 percent.

In an email, attorney Tarver wrote that Second Family “had a substantial drop in its census (number of children in residence) which necessarily required across the board adjustments in all expenditures.”

Second Family served an average of 32 children in fiscal 2013, state documents show. The average for fiscal year 2014 was 35 children, a 9.3 percent increase, state officials said.

In fiscal 2013, Second Family spent a total of $120,388 for the personal needs of 32 children, state documents show. For fiscal 2014, the state approved spending of $37,215 for 35 children, and the budget for the current fiscal year — which began July 1 and is calculated for 40 children — maintains the low spending rate while allowing for another salary increase.

The charity explained some of the cuts in budget footnotes. It acknowledged that the amounts for clothes and personal needs were below “state mandated guidelines.” It added, “The majority of our children are medically-fragile and non-ambulatory. While we keep them clean and well dressed, their wardrobe needs are minimal and, in many cases, met by family members.”

“That makes me very upset,” said Ann Marie Foley Binsner, executive director of Court Appointed Special Advocates of Prince George’s County. “It is true that the kids who are nonambulatory do not need a vast wardrobe; however they do need more than [that] for an entire year.”

She also took issue with Second Family’s assertion that the disabled foster children receive significant support from family.

“This information, combined with the pay that the leadership grants themselves, is very concerning,” she said.

Tax records indicate that Second Family paid Shilda Labule $159,868 for the fiscal year that ended June 30, 2013, the most recent available data. She was also paid $48,077 from Second Family Adult Homes. She received another $15,785 in other compensation from both — a total of nearly $224,000. She reported working 75 hours per week for the charity and eight hours at the adult facilities.

Joseph Labule was paid $144,792 for working an average of 88 hours per week at the charity, tax records state. His additional five hours per week at the adult homes earned him $31,441, and another $10,551 in other compensation brought his total pay to nearly $187,000.

Marion Hailey received $140,451 for working 99 hours per week for the charity, tax records show. She did not receive any money from the adult homes, according to tax records.

Criminal conviction

As for Joseph Labule’s criminal theft conviction, Sharfstein and Dallas said they were not concerned because the charge is 13 years old and has nothing to do with harming individuals. Labule, 56, admitted to taking workers’ compensation while he was working two other jobs, which is illegal. He fell behind in restitution payments and in 2001 the state garnished his Second Family wages until all of the money was repaid in 2008.

Labule signed an affidavit last September accompanying Second Family’s application for a state contract that asserts he has never been convicted of various crimes, including theft.

A Department of Human Resources spokesman said Labule told the agency his conviction was expunged and that its background check confirmed his claim. The spokesman added that the agency was double-checking the assertion about the expungement but later said it could not comment on such background checks. Tarver said Second Family was still reviewing the issue.

Legal experts say such a conviction — which is still visible in online records of the Maryland court system — cannot be erased under the state’s expungement rules.

“A [theft] conviction cannot be expunged,” said Michael Pinard, a professor at the University of Maryland law school.

Child advocates say the state should have higher standards for an executive with a contractor that controls millions in taxpayer dollars for disabled children.

The state should be awarding contracts to providers that have “respectable business histories,” said Little, of the Legal Aid Bureau. “If someone steals money from the state, I don’t think that’s the kind of person you want to have taking care of vulnerable people.”

ddonovan@baltsun.com 

By | 2016-10-25T17:47:01+00:00 October 20th, 2014|News|0 Comments