Sometime in the early morning of March 23, 2000, Theresa Gugliano, a legally blind 77-year-old, and Hugh Fearon, 22, argued in the kitchen of the upstate boarding house they shared. Fearon, a Queens native, had a history of mental illness and refusing medication. He stabbed Gugliano, then dragged her limp body into the backyard, where he bludgeoned her with a brick.

Late last year, Frank Cuttita, who owned their boarding house and two others in the tiny town of Liberty, New York, was found guilty of operating “adult care facilities” without a license. He escaped jail time, but was fined $405,000 by the state attorney general after a lengthy investigation.

An adult care facility is defined in state law as a home for tenants who “are unable or substantially unable to live independently.” They might need help with basic tasks like grooming, transportation or taking medication, but don’t necessarily require round-the-clock care.

Cuttita’s lawyer, Albert Gaudelli, argues that his client never intended to run adult homes, just boarding houses. If any of his residents needed more services, their doctor or social worker could have found them a better placement. The case is now on appeal. “Everyone is looking to point the finger at someone else and they don’t look at themselves,” says Gaudelli. “Are you interested in the condition of the patient or are you interested in covering your ass?”

But Andrew Weiss, special assistant to the attorney general, says Cuttita knew he was serving a vulnerable population. “He was driving them to their medical appointments, filling their prescriptions,” says Weiss. “For him to put his head in the sand goes against the weight of the evidence.”

Paul Leroy, a Liberty police dispatcher familiar with the case, says Cuttita’s houses suffered a rash of incidents over the years, including an apparent suicide. “There was no supervision,” he recalls. “No staff.” Leroy says he tried in vain to draw the state’s attention, but the Department of Health, which regulates adult homes with five or more people, took an interest only after Gugliano’s death.

If this is an extreme example, it underscores a very common problem–and a dangerous gray area in the law. While several government agencies are charged with monitoring the health and well-being of adults with mental illness, the rules are somewhat vague when it comes to tracking and penalizing unlicensed facilities.

In 2002, a Pulitzer Prize–winning New York Times series by Clifford J. Levy put the Health Department in the hot seat for failing to protect residents of licensed adult homes. At 26 of the city’s largest facilities, Levy documented 326 deaths of residents under age 60 between 1995 and 2001. But the series barely touched the issue of unlicensed homes. And neither, it seems, has the state Department of Health.

City Limits has learned of more than 40 private homes in the five boroughs suspected of being unlicensed adult care facilities, much like Cuttita’s boarding houses. But although the Department of Health has known of many of them for years, it has taken little action. According to its records, only one unlicensed home has been closed down in New York City over the past three years.

In the course of this investigation, we visited 10 unlicensed homes and gained access to six. Those we entered ranged in quality from abysmal to inspirational. Some seemed to pose an active danger to their residents, while others appeared healthy and safe.

Figuring out how to advocate for residents of both is a tricky task for Claudia Wilner, a fellow sponsored by the law firm Skadden Arps to work with the Mental Health Project of the nonprofit Urban Justice Center. Hired last fall, Wilner is charged with researching unlicensed adult homes and helping to improve living conditions for those inside. “We realize there’s a shortage of housing for people with psychiatric disabilities, so we don’t want to try to shut down homes unless it really seems like the residents are in danger,” Wilner explains. Nor do they want to patronize capable adults. “But there’s another group who need help to take meds, prepare meals, get around,” she says. “They are dependent on their landlords for every aspect of their lives. Those are the people for whom unlicensed adult homes are really a bad idea.”

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Adult homes sprung up in the 1960s and 1970s, as states began to close psychiatric wards and institutions. Motivated in part by new ways of thinking about mental health, and the availability of new psychotropic medications, the change also reflected a funding shift. The federal government had created new programs like Supplemental Security Income and Medicaid, and entrepreneurs were eager to make the most of them.

Until 1997, adult homes were monitored by the state Department of Social Services. Today, homes with five or more adults fall under the purview of the Department of Health, while smaller “family-type” homes are licensed by the Office of Children and Family Services. The Office of Mental Health, arguably the most appropriate agency to track psychiatric placements, has little to do with adult homes. But it does help certify “community residences” and supported housing, both of which are linked with services like case management and health care.

Confused? So were many of the adult home residents and owners we interviewed. While having a range of housing models provides flexibility, it also muddies the distinction between boarding houses and adult homes.

In either case, rent is generally paid for by the federal Social Security Administration, which provides roughly $650 in Supplemental Security Income each month to 429,000 disabled New Yorkers. Mental health or medical services are paid for with Medicaid. Most adult homes operators charge $500 or so in rent for a room or a bed, and sometimes more for meals. Whatever is left over goes to the residents as allowance.

If an individual can’t handle his or her own finances, the Social Security Administration helps find a “representative payee,” preferably a family member or close friend. But often, adult home operators present themselves as care providers, rather than landlords–giving them full control over their tenants’ finances. The agency will visit homes to make sure payees are up to snuff, but it doesn’t routinely check to see if they are licensed. “The licensing isn’t our business,” says John Shallman, the Social Security Administration’s communications director. “That’s the state.”

Unlicensed homes are not inherently illegal–unless the health department determines that one or more residents are disabled enough to require special care. In the past few years, the Department of Health has inspected several homes suspected of flouting the law. “If we’re made aware of a situation, we go in immediately,” says spokesperson Robert Kenny. Once an owner is cited for operating illegally, he or she is ordered to apply for a license or transfer out residents who need more help. If the charges are more serious, the department can remove the residents itself.

But because the homes are unlicensed, the department doesn’t have the authority to fine illegal operators or shut them down, Kenny says. And while it can refer cases to the attorney general for investigation, it has done that only once, with Cuttita.

A 1999 audit by then-state Comptroller Carl McCall found that the Department of Health and the Office of Children and Family Services were often slow to investigate unlicensed facilities. “Officials at both the department and OCFS told us they do not actively try to identify these facilities because identification of such facilities is not mandated by law and is not considered a priority,” the audit states. A 2002 follow-up found that the department had done more outreach, but still had no written procedures for finding unlicensed homes.

Hospitals, however, seem to have no trouble locating them. Despite state law that requires appropriate placements and Office of Mental Health regulations that preclude the release of patients to homes cited for operating illegally, many hospitals continue to use them. Most of the unlicensed home operators interviewed for this story rattled off lists of hospitals that regularly referred clients, including Interfaith Medical Center in Brooklyn, South Beach Hospital in Staten Island and St. John’s Episcopal Hospital in Queens. Interfaith declined to comment on its procedures; South Beach referred us back to the Office of Mental Health. St. John’s did not respond to repeated calls for comment.

The Department of Health now posts a “Do Not Refer” list on its web site, but it only contains six addresses in the five boroughs, a far cry from the 40 or more that advocates have identified.

One of those homes is Iyageh House, a three-story brownstone on Kosciusko Street in Bed-Stuy. In a 2003 report to the city Department of Buildings, the Health Department relayed a laundry list of concerns, including overloaded electrical circuits, no sprinkler system and sleeping quarters located in the windowless basement. Another letter from the Health Department to the owner’s attorney noted “numerous documented medication errors.” But our surprise visit in February found the home still running. Kenny says the department continues to “closely monitor” the situation.

The tangled web of agencies involved in adult home regulation makes it tricky for a neighbor who suspects an illegal adult home to know whom to contact. It also makes it easy for the agencies to point fingers at each other when something goes wrong.

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Something went very wrong at 738 Snediker Avenue, a three-bedroom apartment in East New York. Although its owner, Mary Smith, was once certified to run a family-type home, that license was revoked in 1992 when she refused to limit the operation to two beds.

Yet Smith continued to rent out rooms to adults with mental illness. Roger arrived in 1999, after he was discharged from Interfaith Medical Center. Severely agoraphobic, he was effectively stranded in his room, which he describes as barely livable. His Polaroids reveal overflowing garbage, mouse droppings, peeling paint and walls covered with mold. The city’s Department of Housing Preservation and Development found 11 violations during a single inspection in July 2001.

And the problems ran deeper. House staff referred to the residents as “patients” and treated them like children, Roger says, intruding without knocking and denying food as punishment. He later testified that when he complained, a staff member called him “faggot” and “bastard,” and the owner threatened to evict him. Smith and her lawyer could not be reached for comment.

Roger, a stocky 57-year-old given to shy smiles and quick tears, says he wrote and called every agency he could think of, but it wasn’t until he found Bill Lienhard of the Urban Justice Center that anyone took him seriously.

In early 2001, the Urban Justice Center had just exposed Joe Clarke, the owner of another unlicensed home. Roger read a Daily News story about the incident, realized that his situation was similar and contacted Lienhard for help. Lienhard admits that some of Roger’s claims seemed outlandish at first, but he was able to verify most of them first-hand.

Even with mounting evidence, however, it was nearly impossible to figure out where to turn. Lienhard’s files reveal a seemingly endless paper trail in which agency after agency said it couldn’t intervene because the home was unlicensed. “It’s a Catch-22 that enables them not to do anything,” Lienhard says. In the meantime, Roger fought off four attempted evictions.

He finally won his countersuit against Smith in August 2002. Roger collected $10,000 in damages and moved, but still fears that Smith’s associates will try to track him down. Worse, perhaps, he spent his portion of the court award on temporary housing and still hasn’t found a permanent home.

The frustrations of Roger’s case pushed Lienhard and Wilner to take a broader approach to the problem of unlicensed homes. “We realized it wasn’t an anomaly at all,” Lienhard says, “but a real cottage industry.” Rather than target the operators, Wilner helps clients understand their rights so they can solve discrete problems without getting evicted. Soft-spoken yet tough, she travels around the city by subway, giving workshops at day treatment centers, meeting with clients, and collecting information for her upcoming report. In the course of her investigation, she discovered Home Sweet Home.

Located on a desolate strip of Beach Channel Drive in Far Rockaway, Home Sweet Home is the kind of place you’d rather not have to visit. A black garbage bag stretches unevenly across the front window, and all the shades are drawn. Trash and discarded lawn chairs are piled in the ice behind a high picket fence.

Inside, it’s not much better. White walls are smudged with dirt, the teal pleather couch is cracked and peeling, and bare mattresses sit in rickety bunk beds. But mostly, the house just looks stripped: Once home to 10 or more mentally ill adults, it now houses only four or five. Its owner, Tony Yoon, plans to close it down within the next few months.

Yoon, who also runs a convenience store on nearby Mott Avenue, is the first to admit that he originally thought of the home as a business venture. “I had a dream: to start this one and then another–one Korean, one Chinese,” says Yoon. “But when I got into it… it’s not easy.”

Yoon says he first got the idea from a local doctor, who was running a home for around 30 adults, collecting roughly $12,000 in SSI payments each month. But when some residents refused to pay rent, Yoon says, the home disintegrated, and eventually lost heat and hot water. Desperate, the doctor encouraged Yoon to buy a house near the store and take some residents off his hands. Yoon says the doctor, whom he would not identify, didn’t have a license, so he assumed he didn’t need one either.

Yoon had no prior experience in the mental health field, but he liked the idea of taking care of people. A brochure for Home Sweet Home reflects his inexperience. “Anyone at anytime can be chosen for a urine test,” it states. “It is not a personal issue so do not be offended. Please just cooperate with the urine test.” Another rule addresses intimate relations: “Because this is a co-ed facility, we ask that you dress accordingly. Any female caught sexually acting out in or outside will be terminated from the Home Sweet Home program.”

Yet the clients, most of whom spent their days in outpatient programs and their evenings chain-smoking, turned out to be the least of his problems, says Yoon. His workers, on the other hand, were trouble from the start. One stole the house TV and VCR to feed an addiction. Another brought four kids to live in the house and wouldn’t leave until Yoon threatened to call the Administration for Children’s Services. As City Limits went to press, another former staffer, La’Mere Love, had taken over the basement, along with his white pit bull.

“The clients are terrified,” says Margaret, the mother of a former resident. In October, her son called in a panic, claiming Love had threatened his life. (Love describes it as a misunderstanding.)

Kigh Walker, who helps run the house in exchange for rent, says he knows it’s not perfect, but “everyone is like family.” His housemate, Tyrone Sheard, who does odd jobs for Tony, describes Yoon as fair and generous. At the end of the month, when their SSI checks have dwindled, he brings them free groceries from the store.

Sheard used to work at Al-Noor Light Home, another unlicensed facility, which closed down last year following a Health Department investigation. He doesn’t understand why the state seems to target some homes, and lets others slide. “As hard as it is to get housing for people with mental illness,” Sheard says, “they go to these little places and shut them down.”

Wilner sympathizes with the tenants’ concerns, but she isn’t shedding any tears for Tony Yoon. “Home Sweet Home is a grim and sordid residence run by unscrupulous individuals who prey on poor people with psychiatric disabilities,” she wrote in a January 2004 letter to the Health Department. “I believe that residents of this facility are in imminent danger.”

The Health Department has actually known about Home Sweet Home for quite a while. In December 2002, its inspectors recorded an array of code violations and told Yoon that he had to get a license, transfer the clients, or risk a fine. The department doesn’t offer landlords seeking licenses any help with their applications or in seeking grants. “The onus is on them,” says Kenny.

In February 2003, Yoon sent an application to the department and even paid a lawyer $2,000 for help. But his application was incomplete, and the lawyer, he says, turned out to be a scam artist who made off with his payment.

For now, Home Sweet Home is still open for business. Wilner asked the Health Department to immediately place the home on its Do Not Refer list. But, as of press time, it still wasn’t up there. We faxed her letter to the department’s Albany office, which sent an inspector the very next day. “If any of these allegations are sustained,” Kenny says, “we’ll take action to transfer the residents.”

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For every Home Sweet Home-type debacle, there are also success stories, unlicensed homes that seem to operate at least as well as their licensed counterparts. Less than a mile from Beach Channel Drive, Cynthia Bryant, pastor of the JUSTICE (Justice Unity Strength To Improve Community Economics) organization, runs one of those.

Bryant started small in 1990, running a bible study and food program out of a Baisley Projects apartment in Jamaica, Queens. But Bryant didn’t stop there. When she and her husband moved their budding church to Far Rockaway, she noticed that many of the neighborhood’s large frame houses were empty. The former tourist haven was increasingly crime- and drug-ridden, and many of the old-timers couldn’t take it. Geraldine Papathomas’ parents were among those who fled. “It turned into a dump,” she says.

Bryant, who had worked at Creedmoor Psychiatric Hospital, approached Papathomas and her husband about converting their parents’ house into a mini-shelter. SSI would guarantee them stable rent, and Bryant would make sure the home was well maintained. At first, Papathomas was skeptical. “We didn’t know who these people were or what we were getting into.” But the mortgage on the home was already paid off, so they felt they had nothing to lose.

Meanwhile, Bryant began to approach other local owners with the same proposition, and slowly built a social service empire, providing housing, meals, clothing, counseling, and prayer. In and around her church on Beach 15th Street, she now has four homes: one for women, one for working men, one for families and one for those “who need more supervision.” In total, she runs 20 homes in Jamaica and Far Rockaway, and says she’s served over 10,000 people since 1990 “without the help of the city, state or federal government.” She has no paid staff, just volunteers, and doesn’t collect SSI checks. If necessary, she has residents, who also staff and clean the homes, act as representative payees for each other. This keeps her hands clean if the group is ever audited.

Bryant’s houses aren’t “adult homes” in the conventional sense. But it’s hard to say what, exactly, they are. Her clients are a mix of homeless people, recovering substance abusers and the mentally ill, three categories that often overlap. Dawn Simmons, 36, a petite woman with a dark scar on her forehead, came to JUSTICE after addiction landed her in South Beach Hospital. “I never had my own keys. I never paid rent before I came here,” she says. “The only time I thought about God, I thought, ‘Please God, help me get $5 so I can get another hit.'” Now four years clean and sober, Simmons is moving to North Carolina with her new husband, another resident, to help run a branch of the JUSTICE mission there.

Bryant doesn’t take credit for Simmons’ success–or even for her own. She attributes the strength of the organization directly to God. “Every day is a fight,” she says. “I thank God for equipping me to do what I’m doing.”

Government, on the other hand, seems to be working against her. Bryant says she’s tried to get support for her work but keeps getting turned down when she applies for funding. The city Department of Buildings tried to close Papathomas’ home in 1998, charging that it was illegally converted to a single-room-occupancy hotel (SRO). “They don’t think you should house people unless you follow the building code to a T,” she explains. Eventually they were fined, but the home, now smaller, survived.

Whether it’s God or good luck, JUSTICE seems to be working. The houses we saw were spotless; the clients seemed engaged and happy. “We don’t need a license,” Bryant says. “When they come here, this is their home. These are my children, and I love them very much.”

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Most of the unlicensed homes we visited seemed neither as dangerous as Home Sweet Home nor as impressive as JUSTICE, but somewhere in between. On Greene Avenue in Bed-Stuy, we found three men with obvious disabilities left alone in a darkened

brownstone. In another home nearby, a bewildered-looking woman with a vertical shock of slept-on hair warned us that we were not allowed to tour the house.

On Kingston Street, just across Atlantic Avenue, several men wandered in and out of Hall and Evans, which looks from the outside like any SRO. Its owner, Darrell Evans, was featured in a 1993 New York Times Neediest Cases story, which described the home as a “boarding house for mentally ill men.” But although Evans has operated in the open for more than 10 years, and houses 40-odd men, he doesn’t have a license.

What he does have is a home that will take virtually anyone, offering the city’s hardest-to-place an escape from homeless shelters and county hospitals. “We give them a chance to go out, to walk around the community, get a cup of coffee,” he says. “This gives them back some kind of control.”

Michael Swinton is one of Evans’ clients. Raised in foster care in the Bronx, the slow-moving 24-year-old was transferred in and out of hospitals and halfway houses before landing here. He’d much rather have his own place, he says, but a doctor told him “it was too stressful” to live alone. Now he bides his time at Hall and Evans, hoping to find a computer job and move on.

Tanya Kessler, a community organizer with the Coalition of Institutionalized Aged and Disabled, which works with residents of adult homes, says that people like Swinton deserve a chance to stay in the least restrictive setting they can handle. In fact, a pending lawsuit, Disability Advocates Inc. v. Pataki, demands that the state move mentally ill clients out of larger adult care facilities and into smaller, more integrated homes.

But that doesn’t mean lowering standards. “To live someplace because you have no other choice, because that was a place to put you, it’s just unconscionable,” Kessler says. “We’re pushing for housing that provides a decent quality of life, where you can live with dignity.”

Most providers point to supportive housing, which emphasizes rehabilitation, as the model. The Edgecombe, for example, run by the nonprofit Center for Urban Community Services, offers 21 formerly homeless, mentally ill residents each their own bedroom with a common kitchen and a vegetable garden outside. Housed in a giant, red former mansion in Harlem, it also provides on-site case management and help with medication and life skills.

Advocates have long pushed for more housing like the Edgecombe. New York/New York I and II, joint city and state programs that serve the formerly homeless mentally ill, have created nearly 5,000 supportive housing units since 1990. In 2002, the Governor’s Adult Home Work Group called for an additional 6,000 beds to provide alternatives to inappropriate homes.

In addition to lobbying for increased funding, providers are now teaming up to educate the public. The New York State Campaign for Mental Health Housing Reform, which kicked off in March, is backed by 38 advocacy groups and service providers. Their three-year crusade envisions more new housing, but also the preservation of existing homes through stricter oversight, physical renovations, and improved services. Some day, Kessler hopes, better options could eliminate the need for unlicensed adult homes and questionable boarding houses.

Evans disagrees. “There’s always going to be that population that needs somewhere to go,” he says. But while he sees an essential role for unlicensed homes, he’d rather go legit. Evans yearns for acceptance and respect from the social workers and case managers who quietly send residents his way. So he recently applied for a license from the Department of Health. “I just want the right to exist,” he says. “I’m tired of being an outlaw.”

To report problems in unlicensed homes, call Claudia Wilner at the Mental Health Project at 646-602-5683.

some names in this story have been changed.