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Accused embezzler duped more than IRS

Niagara Falls Repoerter

July 12, 2011

By Frank Parlato Jr.

From time to time, the Niagara Falls Reporter has the unpleasant task of reporting on the misdeeds of past or present advertisers.

One of these cases is that of Marc Irwin Korn, 54, of Amherst, who advertised with us frequently as the proprietor of Fairchild Manor in Lewiston.

Korn was charged by the U.S. Attorney in late May with embezzlement and scheming to defraud, and as the Reporter has learned, he failed to pay many of his employees, while trying to induce them to continue working for him by writing them bogus checks.

The Reporter has uncovered information suggesting he repeatedly told hardworking employees and vendors to deposit and redeposit checks that he knew would bounce, adding additional costs for people who got hit with bank charges because of his deliberate lies.

Korn has been asked to comment, and indicated he cannot do so without his criminal attorney Paul Cambria present.

Many people, besides the federal government, believe he stole, and authorities are determined to put him in prison. The federal criminal complaint alleges Korn violated the wire fraud statute. The charge carries a maximum penalty of 20 years in prison, a fine of $250,000, or both.

Marc Korn

BAD HAIR DAY? Korn's ill-gotten gains paid for hair transplants.


Besides cheating people who trusted him, there is an additional injustice Korn perpetrated.

All the nearly 80 senior residents of Fairchild Manor have to be moved to various other nursing homes in the area, causing untold grief and concern for residents and their families.

Last month, the New York Department of Health approved a plan for Fairchild Manor to close and cease operations. The residents will be relocated to other nursing home facilities.

"The Department of Health will be working to minimize the impact of this closure as much as possible while ensuring that every current resident has options to receive the appropriate care," said State Health Commissioner Nirav R. Shah.

Throughout the sordid story, it seems that embezzlement and bouncing checks was a way of life for Korn, who denied himself no luxury, while poor and ailing people unwittingly helped support his million-dollar lifestyle.

Korn is accused of embezzling and/or stealing $900,000 to $1 million from a charitable organization, patient trust accounts and payroll funds at two nursing homes that he owns. A felony charge of scheming to defraud against Korn was leveled by U.S. Attorney William J. Hochul Jr. Prior to that, a criminal investigation by Buffalo agents of the Internal Revenue Service and the FBI was launched and was ongoing for some time prior to Korn being charged.

Korn owns Fairchild Manor and the Batavia Nursing Home, in Batavia, and was a former director of a charity known as the American Friends of Assaf Harofeh Medical Center. The Assaf Harofeh Medical center is a hospital located in Israel. Korn headed an American "charity" purportedly aimed at raising money for the Israeli hospital.

"The investigation suggests that since beginning in early 2006 and continuing through August 2009, Korn has been funding an extravagant lifestyle by embezzling money for personal use from a number of sources, beginning with American Friends, and moving on to his nursing home businesses, taking money from patient trust accounts," Michael K. Klimczak of the IRS said in court papers.

Korn also withheld payroll taxes to the tune of $700,000 from employee salaries and kept the money for his own use. "The investigation indicates that Korn has converted $900,000 to $1 million of charitable or company funds to his own use," Klimczak said.

Korn said he is innocent. He told federal agents that checks he wrote to himself from the charity's bank account were "reimbursement for expenses incurred in behalf of the charity." Korn could not account for at least $190,000 of the checks he wrote to himself.

In 2005, Korn became chairman of the American Friends group, which raised money to support the medical center in Israel. Instead of using those funds to help the hospital, Korn realized that charity begins at home, and that's what he did.

He bought himself a home worth $700,000 in 2006.

Korn, who speaks with a soft voice and weasel-like demeanor, told the Reporter he is a victim of circumstances. Yet he allowed workers who depended on their salaries to work, knowing his account was overdrawn by $20,000 and that their paychecks would bounce. Korn claimed no employee paychecks ever bounced, but employees said otherwise.

"We have families, we have bills to pay," said Tracy Radley, who worked for Korn at the Batavia Nursing Home. "And to think you can go ahead and steal all this money for so long that you've been doing this for. That's just very low."

"The residents have their Social Security checks sent to the nursing home," another employee said. "Where's the money going?"

One employee said many of Korn's employees fell behind on mortgages and car payments -- all because Korn used their money to fund his high living.

One cannot help but compare Korn with the notorious Bernie Madoff, who got 150 years behind bars. Madoff stole from the rich, but Korn stole from the poor. Korn pretended to represent charity, while he scammed money for himself.

He cheated employees out of the fruits of their labor and caused torment for elderly residents of his nursing homes -- all so he could live in a mansion, drive fancy cars, take extravagant vacations and buy expensive hair transplants.

Korn is despicable.



  Copyright © 2008 Frank Parlato Jr.