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Entrepreneur Fades From View as Empire Collapses

TIMES STAFF WRITER

One year before 63 mostly ailing residents were evicted during the night from a Reseda nursing home, the Arizona Department of Health Services received an unusual, unsolicited biography from the facility’s owner.

Jon H. Robertson, who operated five nursing homes in Southern California, had purchased another, this one in Phoenix, and wanted Arizona officials to know whom they were dealing with.

“Jon H. Robertson,” the letter begins, “is a man of the ‘90s. Contemporary, dynamic, compassionate, family and spiritually oriented, motivating, a teacher, team player and leader.”

Robertson was chairman of the board of directors of Ballet Arizona, a member of the board of the state YMCA, recognized as an expert on government reimbursements to nursing homes, and known in the Phoenix area as a civic-minded man about town.

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According to court documents, former business colleagues and acquaintances, however, Robertson was also a fiercely ambitious entrepreneur with a taste for custom-made suits, top-of-the-line luxury cars and cocaine. And in the year since he submitted the flattering autobiography, he has all but vanished, abandoning his public profile as his multimillion-dollar operation has collapsed.

“The company the year before was in really very good shape,” said Bill Reed of Healthcare Capital Resources, a New York-based finance company with $900,000 in claims against Robertson’s companies. “It deteriorated so fast.”

Three of Robertson’s nursing homes have been closed down on short notice in recent months, the most dramatic shuttering taking place at the Reseda Care Center, where one 88-year-old Alzheimer’s patient shrieked as she was wheeled out at 2:30 a.m. and a 39-year-old stroke victim was forced from his home of 18 years. The two other Southern California homes are now being overseen by a U.S. Bankruptcy Court trustee. The care facility in Phoenix was taken over by its landlord this summer because Robertson had allegedly fallen more than $60,000 behind on his lease payments.

California state investigators are also looking into his use of Medicare and Medi-Cal funds.

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Robertson, who through a business associate declined to comment for this story, recently moved from Arizona with his wife and three teenage boys to a second home in the resort town of Deer Valley, Utah, as lawyers, creditors and the Internal Revenue Service prepare to wrangle over what’s left of his businesses.

Born in April 1958 into a family of 11 children, according to friends and former employees, Robertson grew up in the Salt Lake Valley. His father was a social worker, his mother a homemaker.

Soon after high school, Robertson followed an older brother into the nursing-home business. Smart, impeccably groomed and almost impossibly charming and persuasive, he excelled despite no formal training or college degree.

Robertson worked for several nursing-home companies throughout the 1980s and by early 1992 had risen to senior vice president of operations for Life Care Centers of America, a company based in Cleveland, Tenn., that owns 215 facilities in 28 states.

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While overseeing Life Care’s operations in the Southwest, however, Robertson began to set up his own company, according to Life Care officials and California state business records. Before 1992 was out, Robertson was fired, allegedly because the then-34-year-old was caught running his new business on Life Care’s time.

“Obviously, we were disturbed to learn that his personal business aspirations were getting in the way of his work for Life Care,” said Beecher Hunter, a Life Care vice president, who called Robertson a “very aggressive business person.”

Robertson, a golfer, skier and tennis player, threw his energies into his new venture, Phoenix Health Group Inc. Within a couple of years, he had acquired the Reseda facility, as well as nursing homes in Costa Mesa, Alta Loma in San Bernardino County, Long Beach and Kern County.

As the money began to roll in from Medicare and Medi-Cal payments to the more than 300 residents at the facilities, Robertson, who had long displayed a fondness for life’s pricier pleasures--from Harley-Davidson motorcycles to diamond rings--began to spend conspicuously, several people who know him say.

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At a July 1995 fund-raiser for a Phoenix child-development center--a $110-a-plate event that made the society page of the state’s largest newspaper--Robertson and his wife, Shauna, bid $7,500 for a transatlantic cruise on the Queen Elizabeth II.

An exceptionally natty dresser, Robertson invested in an upstart Los Angeles custom clothier called Jonathan Behr Bespoke Clothing Designs. With his crop of blond hair and a few days of fashionable beard growth, he cut a striking enough figure to model for print ads the company ran in Los Angeles magazine.

He also bought lots of suits--for employees back in Arizona as well as himself, Jonathan Behr said.

Robertson purchased a $1.3-million house in Paradise Valley, Ariz., near Scottsdale, as well as the home in Utah, records show.

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“Houses, cars, condominiums, jet skis, clothes, jewelry. He was very money-driven,” said one former employee of Robertson. “His car isn’t a Mercedes, it’s a $90,000 Mercedes. It isn’t a tie, it’s a $75 tie. It isn’t a watch, it’s a $10,000 watch. Everything had a price tag.”

Although 1996 began with Robertson enjoying a high profile at the helm of a company with annual sales of $7.5 million, the year ended with Robertson all but absent from his business and civic lives, sources said.

Last fall, “he just disappeared,” said Gray Montague, executive director of Ballet Arizona. “We haven’t heard of him since.”

He had virtually no contact with the clothing company and his stake was eventually bought out, Behr said.

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“He never stiffed me once. He was a good partner,” Behr said. “It’s just that he became nonexistent.”

In mid-1996, Robertson checked into a Phoenix rehabilitation center to deal with a drug addiction, according to Reseda Care Center attorney Marc Beilinson and others, though it is unclear how long he stayed.

“It is my understanding that the substance being abused is cocaine because there have been repeated statements from the [nursing homes’] representatives that Mr. Robertson looted the [homes] and ‘put it up his nose,’ ” Reed of Healthcare Capital Resources stated in court documents.

Beilinson and other associates of Robertson say that he contracted hepatitis B around the time he checked into rehab, and they attribute his disappearance from public life to hepatitis-related illnesses. Others, in court documents and interviews, contend that drug addiction was responsible for Robertson’s long absences and the reason he surrendered control of the company.

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Certainly, Robertson’s primary source of income, the nursing homes, had begun to falter.

The number of patients at the homes began to slide. More than 73% of Reseda’s beds were full in 1996. That number had dropped to less than 68% this summer. The occupancy rate at Port Bay, in Costa Mesa, sunk from 90% to 79%.

By early this year, the company needed cash. HCR agreed to finance the business only after Robertson agreed to reduce his monthly salary from $75,000 to $52,500.

But Robertson’s downward spiral would not reverse itself.

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By June, Reed alleges in court papers, Robertson’s companies “were substantially out of cash. . . . We were also informed that Mr. Robertson had ceased showing up to [Phoenix Health Group] headquarters because he had had a relapse of his hepatitis and was once again in the hospital.”

On June 20, Robertson gave power of attorney to a committee of four people, including his wife. By early July, the committee reduced Robertson’s pay to $10,000 a month.

“A short time thereafter it was admitted to me and others at HCR . . . that in truth, Mr. Robertson had a substance abuse problem and that he had entered a rehabilitation facility,” Reed stated in court documents.

By then the enterprises were perhaps too far gone to be saved. Some vendors would deliver diapers, food and medical supplies to some of the nursing homes only on a cash-on-delivery basis. Others would not deliver at all. Paychecks were bouncing.

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“Everybody got taken,” said one Los Angeles business owner who claims Robertson’s companies owe him $80,000. “Everybody.”

And the Port Bay facility was about to close.

On July 21, state Health Department inspectors, who had twice before warned of deficiencies, found 62 violations at the Orange County facility and said they would cut off Medicare payments, which forced the owners to close the home.

In August, the landlords took over the Phoenix home, alleging that Robertson was more than $60,000 behind on lease payments.

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By this time, the Reseda Care Center was losing about $20,000 a month on monthly costs of about $170,000, former manager Bill Mohr said. And on Sept. 10, Reseda filed for Chapter 11 bankruptcy protection.

By the afternoon of Friday, Sept. 26, a court-appointed trustee, Alfred Siegel, had lined up several potential buyers for the Reseda facility and possibly Robertson’s other nursing homes. But when it became clear that no agreement would be reached before the weekend, Siegel ordered the home closed.

All through the night, patients in wheelchairs, patients strapped to gurneys and patients who could just barely walk were helped out of the home by workers awaiting overdue paychecks.

The aging children of elderly residents, some of whom learned of the eviction by watching television newscasts, stuffed their parents’ belongings into green trash bags to carry away.

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The residents, including the crying Alzheimer’s patient and Mike McBride, who had lived at the center for nearly two decades after suffering a stroke as a teenager, have all settled in as best they can at other nursing homes.

Robertson’s two remaining homes, in Alta Loma and Long Beach, are now under the supervision of another bankruptcy trustee and likely to be purchased by new operators.

Robertson, meanwhile, has not attended any of the court proceedings. He is living in Deer Valley, an exclusive ski town and playground for Utah’s well-to-do.

“Even during the hard times, even when food wasn’t being paid for and electricity was being held up until the last minute, and employees who were making $6 an hour were cut down to $5 an hour . . . even then, his spending habits didn’t slow down,” said Chad Hansen, who managed the Phoenix nursing home under Robertson and continues to operate the facility.

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“It didn’t matter who had to sacrifice.”

Times special correspondent Claire Vitucci contributed to this story.


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