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Ex-care center owner charged with manslaughter, racketeering

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Minnesota's attorney general's office said Tuesday that it has charged 10 people with 76 criminal counts following an investigation into the death of a 72-year-old man and what it described as egregious neglect of other patients at a northern Minnesota care center.

The most serious charges include racketeering, swindling and manslaughter counts against Theresa Lee Olson, 43, the former owner of the now-closed center, Chappy's Golden Shores in Hill City. Olson is also accused of bilking the state's Medicaid program out of nearly $2.2 million. The facility had been the subject of repeated disciplinary and administrative actions by the Minnesota Department of Health and the Department of Human Services, the attorney general's office said.

"My office is holding these defendants accountable for what we believe we can prove is systematic, intolerable abuse and neglect that in one case led to death, not to mention widespread fraud, theft, and other charges that hurt everyone," Attorney General Keith Ellison said in a statement.

The charges were filed Monday in Aitkin County District Court. Olson and four other defendants had court appearances scheduled for Wednesday, while the others have a court date of Oct. 28. The other defendants include Olson's daughter, who allegedly bought Chappy's from her mother for $1 after the state suspended its license and continued to run it under a different name without a license.

Prosecutors also allege that Olson and her husband withdrew over $1.7 million from Chappy's bank account after the state conducted an inspection in December that led to the suspension.

Olson did not immediately return a message seeking comment Tuesday, and court records didn't list an attorney who could speak on her behalf. The racketeering and the most serious swindling counts carry maximum potential penalties of up to 20 years in prison. The manslaughter count has a 10-year maximum.

The attorney general's office said its investigators found that Olson and other Chappy's employees failed to provide multiple residents with proper health care, supervision, food or shelter.

The second-degree manslaughter count cited the case of a 72-year-old Marine Corps veteran, identified only as R.M., who died last October of septic shock, an untreated urinary tract infection and other complications resulting from improper medical care and neglect. The investigators said doctors and nurses who treated him at a Duluth hospital just before his death found a "filthy" catheter and a 1-square-foot pressure sore on his tailbone that was draining a "foul smelling liquid," a wound they said resulted from "utter, complete neglect."

The Medicaid fraud counts allege that Chappy's billed the state for services that were never provided or weren't covered by Medicaid.

Prosecutors said one reason the services weren't covered is that there was no registered nurse on staff as required by law, which the defendants hid by listing a nurse who no longer worked there and forging her signature on medical records. They also are accused of housing residents at unlicensed and unsanitary facilities. They allegedly billed for home health aides who had not passed background checks, including some with criminal convictions that would have disqualified them, then listed them as maintenance workers to conceal them from inspectors. And they are accused of billing for services they couldn't have provided to residents who weren't there on the dates billed.