LA lender takes ownership of Austintown's California Palms
A Los Angeles-based lending firm now holds the keys to an Austintown building that has been home to a hotel and residential addiction recovery center.
The Mahoning County Sheriff’s Office tells 21 News that deputies on Thursday served a Writ of Restitution on the owner of the 200-bed California Palms Addiction Recovery Campus at Route 46 and Interstate 80.
Accompanying the deputies were representatives of Pender Capital and a locksmith who changed the locks on the exterior doors of the four-story building, still surrounded by artificial palm trees installed when the property was known as “Hotel California”
Pender’s acquisition of the building is the latest event in a long legal battle to foreclose on California Palms owner Sebastian Rucci.
It was back in October 2019 that a judge ordered the addiction recovery center to vacate the property over a $4 million debt owed to Pender.
Since then, there have been a plethora of cases filed in local and appellate courts, as well as the federal courts.
At one point, Pender asked a judge to jail Rucci, claiming he was in contempt of the order to vacate.
In April of last year, Pender purchased the California Palms building for $4 million in a sheriff’s sale.
It wasn’t until Wednesday when Mahoning County Court Judge Joe Schiavoni issued an eviction order, denying California Palms’ request for a stay in the case based on a case before the Seventh District Court of Appeals.
Attorney James Vitullo filed a complaint on Thursday on behalf of six residents of the recovery center, which was a preemptive effort to stop the eviction. The complaint alleged that the Writ of Restitution was invalid because it was signed by a deputy court clerk instead of a judge.
This past October the Ohio Department of Mental Health and Addiction Services terminated its certification of California Palms as a treatment center.
That same month, federal authorities searched California Palms and seized more than $600,000 from Rucci's bank accounts.
A complaint filed by the U.S. Attorney asks the court to force Rucci to forfeit $5,941,096 in Medicaid funds which investigators claim were fraudulently collected.
The government says Rucci and others billed Medicaid for services that were never provided and “upcoded” assessments to maximize Medicaid reimbursements. Upcoding occurs when a healthcare provider submits codes to Medicaid for more serious and more expensive diagnoses or procedures than the provider diagnosed or performed, according to prosecutors.
No charges have been filed against Rucci or his recovery center.