Cedarbrook Residential Center of Nebo, an adult care home in McDowell County with space for 80 residents, who may have mental illness and need constant assistance and supervision, boasts a perfect four-star state rating.

But that rating is a work of fiction.

State adult care home regulators issued a scathing 235-page Statement of Deficiencies against Cedarbrook following an inspection in November 2015, where they detailed allegations of sexual abuse, prostitution, illegal drug use, filthy living conditions and neglect. Additional surveys in March and July 2016 described further abuses and a failure to correct the original problems.

The N.C. Division of Health Service Regulation issued $359,400 in total fines against Cedarbrook and suspended new resident admissions. Based on a Carolina Public Press analysis of three years of public records, that amount is more than three times any other fine levied against any of the more than 1,200 facilities operating across the state.

The sparkling four-star rating doesn’t reflect those findings, however, because the state withdrew its statements of deficiencies, penalties and actual rating of zero stars in a legal settlement with Cedarbrook, despite admitting no errors on the state’s part.

North Carolina law provides for the Department of Health and Human Services’ Division of Health Service Regulation’s adult care licensing section, in conjunction with each county’s Department of Social Services, to rate facilities like Cedarbrook based on site visits and objective criteria scored mathematically. But Cedarbrook’s owner, Frederic Leonard, sued to have the low rating and penalties withdrawn.

A Carolina Public Press investigation into the quality of care provided by adult care homes in North Carolina revealed troubling patterns of inconsistent and unreliable oversight and regulation of these facilities across the state. Despite a complex and costly system designed to keep the state’s adult care home system running smoothly, very serious complaints and incidents persist, with residents neglected, mistreated and even abused. What CPP also found was a star system that advocates call “meaningless,” which analysis confirmed. The N.C. General Assembly recently authorized a review of the entire state-rating system, placing it under scrutiny.

Anyone visiting the state website listing adult care home ratings can learn not only how each facility has been evaluated, but read the detailed deficiency reports that led to penalties and less-than-stellar ratings.

But the three damning deficiencies reports for Cedarbrook are no longer there.

Neither is there any warning on the site that Cedarbrook’s files have been altered.

Public agencies or families who might decide to place a disabled person at an adult care home look at high ratings and spotless records like Cedarbrook’s as a meaningful state sanction of the facility’s quality.

Independent observers have told Carolina Public Press that the low rating and statements of deficiencies accurately portrayed poor conditions at Cedarbrook.

“The facility has generated some of the most serious concerns of any adult care home we’ve spent time in,” said Corye Dunn, director of public policy at Disability Rights North Carolina.

Why did egregious findings and severe penalties for Cedarbrook disappear? What portion of state law defining state oversight of adult care homes allowed officials to make up new rules applying only to Cedarbrook? Can state agencies just decide to stop enforcing the law in the face of litigation, even though they haven’t admitted to making any mistakes? Is that OK with lawmakers and voters?

Not all of these questions have clear answers and many of those involved in the case are reluctant to discuss it directly, but CPP has begun to piece together what happened. The deeper one looks, the more questions appear.

Legal challenge

Before the state had even completed its work from the site visits, Leonard’s legal team filed a petition for a contested hearing on Nov. 24, 2015, through the N.C. Office of Administrative Hearings, a quasi-judicial state agency. Cedarbrook sought to have the deficiency statements “withdrawn,” the zero-star rating wiped out and the financial penalties and admissions restrictions lifted. Although Administrative Law Judge David Sutton, of the OAH’s Waynesville office, assigned the parties to mediation, they appeared headed for a trial in late 2016.

After Cedarbrook’s initial filing, the state conducted follow-up visits at Cedarbrook, with additional negative findings. Penalties against adult care homes also lag behind inspections, so the full amount of the recommended fines against the facility only became apparent on Aug. 15, 2016.

On Aug. 31, 2016, Cedarbrook rejected an Aug. 26 state offer that would have changed the rating to one star out of four, reduced fines and removed admissions restrictions, according to Department of Justice emails.


However, with the trial about to begin, with witnesses deposed and evidence ready for presentation, the state asked to settle, giving Leonard nearly everything he wanted except for court costs and any admission of error. The state deal, recorded before Judge Sutton on Sept. 12, 2016, included a promise to “create” a new four-star rating and provisions for McDowell County DSS inspectors rather than state officials to take the lead in future site visits at Cedarbrook.

“They folded on the day of the trial,” Leonard told CPP. “They waited until a minute before the thing started. Anything that happened with us was a symptom of a problem at the state level, not a problem with us.”

After some legal wrangling over minor issues, Judge Sutton issued a final decision to resolve those and compel the parties to comply with the settlement terms in January 2017.

Claims of prostitution, drug dealing and more

In its November 2015 statement of deficiencies, the state cited Cedarbrook for an A1 violation, the worst penalty the state can assess, after “the facility failed to provide supervision/monitoring related to safety … as (evidenced) by one resident, who was deemed incompetent, known by staff to be sexually active and at a higher risk of pregnancy due to antibiotic therapy” who became pregnant.

The citation also stemmed from not supervising a resident who was a smoker and known to start fires.

Investigators reported that one resident, with diagnoses of bipolar disorder and mild mental impairment, who was “deemed incompetent and had a court-appointed guardian,” according to the state report, had sex with her boyfriend while the boyfriend’s roommate watched. Investigators said the boyfriend’s roommate paid $10 to watch the couple have sex.

According to the state report, Cedarbrook didn’t have a policy in place to cope with residents’ sexual activity and to ensure that the residents were practicing safe sex and that the sex was consensual. Residents told investigators that they weren’t aware of condoms ever being available at the facility.

A housekeeper at the facility told investigators that another resident was known to engage in sexual activity in exchange for $1. The resident’s guardian told investigators that she was aware that the resident was promiscuous, but that she was more concerned with the resident’s tendency to leave the facility unsupervised.

A follow-up survey of the facility in March 2016 described another allegation of a female resident engaging in prostitution. That resident, whose diagnoses included mild mental impairment and a mood disorder, was also “deemed incompetent and had a court-appointed guardian.” A male resident told investigators that the woman had sex with other residents in exchange for sodas. Two other residents said the woman was “selling sex every day” and that “the going price was $2.”

Staff members and residents also allegedly told investigators in March 2016 that residents were regularly bringing marijuana and other drugs into the facility and that residents were regularly smoking marijuana away from the view of staff members.

State regulators filed A1 citations in November 2015 that included a claim that Cedarbrook “failed to protect residents from abuse, neglect and exploitation by failing to protect residents from physical assaults” and by admitting violent residents and failing to discharge those residents when they assaulted others at the facility.

During the March 2016 follow-up investigation, surveyors found that many of the problems identified in November hadn’t been resolved.

Investigators described a resident with post-traumatic stress disorder and substance abuse issues who tested positive for methamphetamine after leaving the facility and walking to an alleged drug house near Cedarbrook. That same resident, who was on court-ordered probation after assaulting her roommate, reportedly attempted suicide several times but continued to leave the facility unsupervised to “meet her drug dealer,” according to the state report, and was later hospitalized after trying to step in front of a car on the road next to the facility.

State surveyors even said they saw the resident walking away from the facility, unsupervised, on the day of one of their visits.

Surveyors again saw a resident leave the facility unsupervised during another follow-up visit in July 2016, according to state documents. Surveyors reported seeing a resident leave the facility and walk down the middle of the road, and said they had to wave at passing cars to get them to slow down. Staff at the facility told those surveyors that they weren’t aware that the resident had left the building.

Legitimate claims?

Leonard told CPP that was the first time in a two-decade career in owning adult care homes that one of his facilities was cited with an A1 violation. In addition to Cedarbrook, he currently owns facilities in Yadkin County and has had an interest in others.

Leonard claims that these alleged problems at Cedarbrook didn’t exist and that the state went out of its way to concoct a case against him despite of a clean record prior to the state surveyor visits that began in November 2015.

“They were there for three days and told us they found nothing wrong,” he said. “They went back and got more people to come in again and started to attack more fringe issues. You have to remember, during the process they were there for days and the first three days, which normally would be more than enough to do a review, they were supposed to tell us if they found anything serious because they’re not supposed to walk out of the building with something serious like an A1 penalty.

“They told us, ‘Everything looked good, we should be out of here soon.’ Then they went back to their headquarters and all of a sudden they added more people and told them to keep looking. And all of a sudden, stuff that wasn’t even felt to be a problem, they changed their positions. This went on over the better part of a couple of weeks and it should have been three days.”

CPP asked DHHS to comment about Leonard’s allegations about irregularities in the visits, but did not receive any response.

Troubled history

DHHS investigators said a review of the McDowell County Sheriff’s Office communications log revealed 202 calls from the facility during the six months prior to the November 2015 inspection, 26 of which were related to assaults at the facility. One resident said he was assaulted during the night and another claimed to have been struck with a soda can and that his injuries required stitches. A county deputy interviewed by investigators said “the number of calls from the facility about fights between residents was ‘almost ridiculous.’”

Despite Leonard’s defense of Cedarbrook, the McDowell County Sheriff’s Office had many well-documented encounters there, with many of the same types of problems that would eventually show up in the state reports. Many of the law-enforcement visits described by surveyors brought little outside attention. Others were serious or bizarre enough to be documented in news accounts.

The McDowell News and other area news media published multiple accounts indicating serious problems at Cedarbrook going back to at least 2009, when two residents with apparent mental health issues fought over $4.25, with one fatally striking the other and being charged with his murder.

Two months later, a quarrel between two 34-year-old Cedarbrook residents led to one man stabbing the other with a pocketknife.

In a July 2014 incident, deputies charged a 28-year-old male Cedarbrook resident after he was accused of wandering into another man’s room and strangling him, creating bruises on his neck, The McDowell News reported.

In October 2017, after the state had settled its case, citing what DHHS has described as “improvements,” deputies responded to another violent confrontation between two Cedarbrook residents in which a 32-year-old man was accused of causing serious facial injuries to a 52-year-old man, according to The McDowell News.

In December 2011, a 24-year-old Cedarbrook resident wandered away from the facility without staff knowledge and wound up in a dumpster while looking for a missing necklace. He was only discovered after he had been dumped at the county landfill, which he survived without serious injury, according to Asheville TV station WLOS.

In August and September 2013, authorities conducted a manhunt for a 32-year-old Cedarbrook resident who went missing, also after apparently wandering off, according to a publicity bulletin the sheriff’s office issued at the time.

The McDowell News also reported on a 2015 case in which a 35-year-old woman wandered off from Cedarbrook, where she had been housed due to “dementia or some other cognitive impairment.” The case resulted in a statewide Silver Alert a week after she disappeared.

Sexual crimes at Cedarbrook have made the news as well. A McDowell News report from September 2013 described the arrest of a 24-year-old Nebo man working a nursing assistant at Cedarbrook accused of trading cigarettes for sex with two female Cedarbrook residents.

Two years later, deputies arrested a 48-year-old Marion man for sexual battery and assault on a 24-year-old female resident of Cedarbrook. The victim accused the man, who worked for an agency that helped residents find alternative housing, with making sexual advances and assaulting her, according to The McDowell News.

Many of the criminal citations suggest limited supervision of a resident population that has serious cognitive and behavioral disabilities. For example, the sheriff’s office responded to Cedarbrook in October 2015 when a 46-year-old male resident set fire to bathroom towels.

Why settle?

Then-DHHS spokesperson Melody Barrett told CPP that the decision to settle came through a deliberative process in consultation with the N.C. Department of Justice attorneys representing the agency. Although she described improving conditions at Cedarbrook, she did not undermine the credibility of the earlier findings, but instead suggested doubts about the agency’s ability to prove its case in court.

“As the process moved toward a trial, the division carefully weighed the strengths and weaknesses of our legal position with our litigation counsel,” Barrett said.

DHHS Deputy Secretary Mark Benton acknowledged the unresolved factual contentions by both sides in the case.

“Our primary goal is protecting the safety and welfare of the state’s most vulnerable citizens,” Benton said.

“While it’s likely that both sides will debate the merits of this case for some time, we are focused on ensuring that the care in all our facilities is both safe and appropriate. We are hiring additional investigators, providing more training and working collaboratively with county DSS agencies on our shared responsibility to conduct routine and unannounced inspections of adult-care facilities.”

In turning down the state’s earlier settlement offer in August 2016, Cedarbrook’s legal team threatened the state with significant legal risk if the case proceeded to trial. Neither party has told CPP that this contributed to the decision to settle, but it could have been a factor.

“Cedarbrook has incurred damages in excess of $2 million,” wrote Cedarbrook attorney Joseph Ponzi in a letter to the N.C. Department of Justice, citing the many years in which Leonard had operated adult care homes.

“As you might have expected, we intend to pursue attorneys’ fees if we go to trial. So you fully appreciate the gravity of this case, we also intend to pursue a Section 1983 (wrongful conviction) claim against the agency in federal court in the event of a successful outcome in OAH, in order to recover the entirety of Cedarbrook’s damages.”

Despite the state’s position of not admitting fault, Leonard told CPP that the state would never have settled a case involving such horrific allegations about a facility if it hadn’t known that the charges were mistaken.

“I think that seeing that the state withdrew them, I don’t think that any of the facts can be determined to be correct, or they shouldn’t have withdrawn them,” Leonard said. “If they had fought to keep any of the information intact, that would be evidence that some of it might be true. They withdrew it 100 percent.

“My question would be, why would they withdraw them if they weren’t wrong? To me it stands for itself that if they’d been correct, they would have left them in. And they didn’t leave any of them in. And it wasn’t out of compassion for me. They withdrew them because they fundamentally felt that the information was wrong.”

Before the state offered to settle, Leonard himself was deposed as a witness, testifying about how severely the regulatory action had damaged his business. Among the others deposed was Meghan Lamphere, the director of adult care licensure for DHHS.

CPP requested and received a copy of Leonard’s testimony, along with many other documents from the Office of Administrative Hearings. Although requested, Lamphere’s testimony was not included. A spokesperson for Judge Sutton said that was not by accident.

“A determination has been made, the document you have requested, the deposition of Meghan Lamphere is a protected document that falls under the Protective Order issued in … Cedarbrook Residential Center Inc. v. NC Department of Health and Human Services Division of Health Service Regulation,” said Maria Erwin, chief hearings clerk for the Office of Administrative Hearings. “I am unable to provide you a copy of the document which you have requested.”

Leonard has suggested that Lamphere’s testimony would have been crucial in undermining the state’s case.

DHHS did not comment on Leonard’s analysis of the settlement.

Ongoing concerns

More recent observers at Cedarbrook have confirmed much of what DHHS described, casting doubt on Leonard’s claims that his facility was mistreated.

Gabby Bush, an investigator with Disability Rights North Carolina, has visited Cedarbrook around 10 times since 2015 and said she was able to confirm many of the allegations in the state surveys.

Her observations also conflict with the state claim that the facility had seen improvements beyond cosmetic changes before the state offered to settle.

“I didn’t really see any improvement,” Bush told CPP. “There were some efforts to make physical changes at the building. For example, in one room there was a giant hole in the wall and they did fix that. There was some painting that was done, and the installation of some new light fixtures so the facility was brighter. But in terms of real systemic, cultural changes, no.

“There still were issues with general cleanliness, there were still bugs. The overall conditions didn’t really change.”

Bush also expressed concern about a charge that the facility was running a work program in which residents did chores around Cedarbrook in exchange for credit at the facility’s store.

“That is something that never changed, even though the state came in and cited them for that,” Bush said. “(The charges) went away when the surveys went away. That work program still exists. That’s a solid, measurable example of a change that never happened, that exploitation never stopped happening.”

“I’ve seen residents want to participate in some chores or they might want to help in some way at the facility, but they’re not paid in that way,” she added. “The way this is set up, it’s almost like a commissary at a prison. They’re not getting real money for the work they’re doing. They’re going up to the facility store and are able to get sodas and cigarettes and that sort of thing.”

One agency that has consistently not reported any serious problems at Cedarbrook is the McDowell County Department of Social Services.

Per the settlement, the state is letting DSS take the lead. CPP contacted DSS about its findings at Cedarbrook since the settlement, but the agency declined to comment citing ongoing legal activity. Disability Rights North Carolina has sued McDowell County DSS for access to its records of visits at Cedarbrook.

DHHS spokesperson Christine Mackey was slightly more forthcoming. “The Division of Health Service Regulation and the McDowell County Department of Social Services recently completed a joint annual survey of Cedarbrook and our findings will be publicly posted in the near future once the report has been finalized,” Mackey said.

As of Oct. 18, 2017, those findings had still not been posted.

Cedarbrook received a construction inspection, which looks at fixtures and structural conditions, in November 2015 with a follow-up in February 2016. But there are not records of any general surveys at the facility posted on the state website.

According to the site, Cedarbrook received a four-star rating based on an October 2014 site visit in which it was cited for 2.5 demerits.

The only other star rating evaluation since that time is the fake one, posted in January 2017 as a “reissue,” with just 2.0 demerits.

“It raises the concern that the star ratings are essentially meaningless,” said Dunn, with Disabilty Rights NC. “The public relies on the state agency to post information that they can use to make decisions about their healthcare. This is effectively the state denying people access to information about a facility that is providing care and receiving public dollars.”

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2 replies on “State Created Fictional 4-star Rating To Settle with Troubled Adult Care Home”

  1. As a former member/chairman of the Community Advisory Committee (Ombudsmen Program), none of this surprises me.
    There are numerous problems in these facilities that the Ombudsmen and State Inspectors want swept under the rug. There were so many problems in some of the facilities in my county and I was basically being told not to speak out about them and not to “upset” the facility administrators.
    This was why after almost seven years serving on the committee, I resigned six months ago along with two other members.
    It became too hard to see and know the problems but not being allowed to speak up for those who could not speak for themselves.
    This is all very disturbing.

  2. State DHHS officials and county DSS have been using the disabled for many years for state medicaid money and matching federal dollars attached to each body. The state whines about needing more funds to take care of those in ach. However, as an advocate for the disabled, I personally know dozens of families that are fighting the state and DSS to get their family members home, but the state refuses to release them. And the families that have their disabled loved ones at home are fighting the state and dss to keep them at home. The legislators sign whatever legislation needed to keep these deplorable places operating because it means revenue for the state from the feds, and from the fines collected from ach violations. Once the state collects the fines, they will gladly “sell” them 5 stars.

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