Past of fraud leads to guilty pleas, scrutiny by IRS Deborah Kolodner's role at adult home may be new episode

November 30, 1997|By Michael James | Michael James,SUN STAFF

Something didn't seem right when the cook drove up in a Bentley.

"I thought, 'What kind of a nursing home has a Bentley for a company car?' " said Lizzie Johnson, recalling the months this year when her 76-year-old uncle lived at Shirley Manor assisted-living center in Northwest Baltimore. "That's no ordinary senior citizens home."

There's nothing ordinary about the cook, either. She's Deborah S. Kolodner, a convicted fraud artist whose love for Rolls-Royces, diamonds, furs and a $1.5 million South Florida condominium has put her in one mess after another.

"Whenever the government agents see me in nice clothes, they follow me," the striking 42-year-old redhead said in an interview yesterday, fielding questions about an investigation of the home. "An IRS agent is out there watching every single day at 7 o'clock in the morning."

Kolodner's problems at Shirley Manor, which federal prosecutors believe she is secretly running to finance the Bentley and a Mercedes-Benz, come on the heels of her latest conviction Nov. 21 for running an elaborate $3 million insurance fraud scheme at a downtown physical therapy clinic.

And the clinic, a so-called accident mill that ground out hundreds of phony insurance claims for services never rendered to patients, came right after her 1994 conviction for practicing medicine without a license, court papers said. That happened in a small New Jersey town that won't soon forget her.

"I've never seen anyone quite like her," said George Dix, who was mayor of Pleasantville, N.J., when Kolodner and her late husband, Fred -- a disbarred lawyer with no medical degree -- opened the Kolodner Medical Clinic. "She hadn't been here five minutes when she was flinging a mink coat around and shoving diamond rings in my face."

Kolodner could get up to 33 months in prison when she is sentenced Feb. 27 in U.S. District Court in Baltimore for the insurance scheme. But prosecutors, who are trying to wrest TC Bal Harbour, Fla., condominium from her that they say she bought with $500,000 of the scheme's proceeds, aren't sure if it'll ever be truly over.

"What concerns me is there just doesn't seem to be any way to stop her," said Assistant U.S. Attorney Virginia B. Evans, who has coordinated an army of federal investigators in the two-year Kolodner investigation. "It's one thing after another."

Kolodner says she just wants to move on with her life. But details of an IRS investigation unsealed by a federal judge last week, as well as documents on file with the Maryland Department of Health and Mental Hygiene, describe problems and unusual circumstances at the Shirley Manor home, where she is listed as "a volunteer."

State officials say the problems -- ranging from lack of staff to improper dispensing of insulin -- are so serious that they may revoke the home's operating permit.

The aging building off Park Heights Avenue, which has been home to as many as seven elderly or disabled people in need of care, is licensed in the name of 26-year-old Rufus Smith, a close friend of Kolodner's. Smith, who often drives the Bentley and wears a large diamond ring, worked for Kolodner at her physical therapy clinic.

Investigators claim that Shirley Manor has spent close to $13,000 in down payments on luxury automobiles and another $4,000 in mortgage payments for persons not listed as owners or employees of the business, court papers said.

Prosecutors added in court papers that Smith "appears to be simply a front for Deborah Kolodner since all of the state and city employees who have dealt with Shirley Manor in the licensing process identify Deborah Kolodner as the individual doing all the talking."

Both Smith and Kolodner vehemently denied that accusation. Smith said that he has obtained all the permits in his name and that Kolodner "has assisted in the development of Shirley Manor" but is not running it.

But wherever Deborah Kolodner goes, the government seems to be close behind.

Always gifted with charm, the Garrison Forest School graduate's first brushes with notoriety came after marrying Fred Kolodner in 1981. She, at the age of 25, had gone to work for the 56-year-old lawyer as his secretary. Two months later, they were married.

A photo taken shortly after the marriage shows the strange dynamic between the two -- he, looking like her grandfather in a pink V-neck sweater, and she with her arms wrapped around him, wearing cashmere and her fingers glittering with gold and diamonds.

"She would walk out to her limousine in the morning, looking like the Queen of England," recalls Jacob France, a one-time family friend who claims Deborah Kolodner owes him more than $500,000 for a loan she didn't repay. "I would say to her, 'Debbie, who are you trying to impress?' "

Fred Kolodner's problems

Fred Kolodner, recalled by many as an affable sort who couldn't control his drinking, had bouts with excessive sports betting and was successfully sued by a Block dancer who brought a palimony suit against him.

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