Bob Dean Jr. and several companies he owned have agreed to an $8.2 million consent judgment to settle allegations of financial misconduct. The allegations claimed that they violated the National Housing Act of 1934 by misusing assets and income from four nursing homes in Louisiana before and after Hurricane Ida in August 2021. These nursing homes had loans insured by the Federal Housing Administration (FHA).
The FHA, under the Department of Housing and Urban Development (HUD), insures loans for residential care facilities, including nursing homes. This insurance provides lenders with protection against losses if borrowers default on their mortgage loans. Recipients of FHA-insured loans must adhere to regulatory agreements that dictate assets and income be used solely for necessary operations of the nursing home.
In 2023, a government complaint accused Dean and his entities of misappropriating funds meant for preparing an evacuation site for residents. Allegedly, these funds were diverted to Dean's personal accounts, leaving the nursing homes unprepared for a hurricane. When Hurricane Ida struck, residents were forced into an overcrowded warehouse owned by Dean's corporate entity, leading to inadequate care and eventual evacuation by the Louisiana Department of Health.
The United States further alleged post-hurricane misuse of funds for personal purchases such as antiques, firearms, and cars. Principal Deputy Assistant Attorney General Brian M. Boynton emphasized accountability: “This settlement demonstrates the department’s continuing commitment to holding accountable those who put their own financial gain over the needs of our nation’s seniors.”
U.S. Attorney Ronald C. Gathe Jr highlighted obligations during natural disasters: “Nursing home operators like Mr. Dean have an obligation to protect their residents during such events... This settlement will ensure that those individuals charged with caring for our community’s most vulnerable residents take seriously their duty.”
HUD General Counsel Damon Smith noted: “Owners of FHA-insured nursing homes should be on notice that we will hold them accountable when we learn of allegations that they have failed to meet those obligations.”
HUD Inspector General Rae Oliver Davis condemned the conditions faced by residents: “By the time Hurricane Ida bore down... he illegally skimmed funding from those facilities... He unfairly enriched himself while residents under his charge endured horrid conditions.”
The case was handled by the Civil Division’s Commercial Litigation Branch, Fraud Section, along with substantial assistance from HUD and its Office of Inspector General.
The Justice Department initiated this investigation as part of its Elder Justice Initiative aimed at combating elder abuse and exploitation.
It is important to note that these claims are allegations only; no liability has been determined.
