Ex-owner of Lewiston, Batavia nursing homes admits to misdemeanors
Nearly eight years ago, Marc Korn faced allegations that he stole from a charity and his own nursing homes in order to finance an extravagant lifestyle.
On Friday, the 62-year old Amherst man pleaded guilty to two misdemeanor charges and agreed to pay $3.4 million in restitution.
Korn, as part of a plea deal with federal prosecutors, admitted cheating Fifth Third Bank of Cincinnati and failing to pay federal withholding taxes for his employees.
When he is sentenced by U.S. District Judge William M. Skretny, he will face up to two years in prison.
Prosecutors said Korn, who at the time owned the Fairchild Manor Nursing Home in Lewiston, used false documentation in order to qualify for a $3.9 million line of credit with Fifth Third Bank.
“Ultimately, the $3.9 million loan went into default and the bank took a loss,” Assistant U.S. Attorney Elizabeth R. Moellering said Friday.
Moellering, who prosecuted the case with Assistant U.S. Attorney Russell T. Ippolito Jr., said Korn also took money from Fairchild and another of his former businesses, the Batavia Nursing Home.
She said he siphoned off money intended for employee withholding taxes and used it instead to pay for personal expenses such as hockey tickets and jewelry.
In his plea deal, Korn agreed to pay $858,614 to the Internal Revenue Service and $2.4 million to Fifth Third Bank. He also agreed to drop his appeal of a court ruling in his personal bankruptcy case.
Defense lawyer Steven M. Cohen said Korn’s two misdemeanor convictions – bank theft and willful failure to pay taxes – are far different than the felony charges he faced in 2011. “That was, in our opinion, a substantial overcharge,” Cohen said of the initial indictment.
Cohen said Korn elected to take the plea deal because of poor health and the prospect of going through three separate federal court trials. The first of those trials was scheduled to begin in early January.
Korn, who complained of chest pains while in court Friday, is awaiting a heart transplant and is also being treated for cerebral palsy, his lawyer said.
Investigated by the FBI and IRS, Korn was initially accused of stealing money from the American Friends of Assaf Harofeh Medical Center, a charity formed to support a hospital in Israel. In his final plea agreement, there is no mention of the American Friends or his role with the organization.