Maryland officials announced yesterday that they would shut down children's group homes run by a company whose executive director expensed Caribbean cruises, luxury SUVs and meals while residents endured what they and former staff described as inadequate medical attention and other mistreatment.

Taking unusually drastic action, the Department of Human Resources decided against renewing the license of Evershine Residential Services Inc. after an inspector found that the Owings Mills company wasn't providing proper care or clean facilities.

"It demonstrates the seriousness of purpose we have, and I think will send a message to anyone that we have heightened our expectations for performance," DHR Secretary Christopher J. McCabe said.

An investigation by The Sun documented lax regulation of care, spending and staffing at Evershine and other companies.

DHR has barred Evershine from accepting any more youths. It told caseworkers responsible for the 23 abused and neglected children living in Evershine's nine homes in western Baltimore County about its shutdown decision. The workers can put the youths in other facilities or can wait to see whether Evershine loses its licenses, which expire in November.

Evershine representatives vowed to appeal. They said the company had been working "desperately" to correct problems since its executive director, Joseph Skariah, and his wife, Lillykutty Joseph, resigned earlier this year but that state officials didn't give the company time to make all the changes.

The representatives said Evershine provides the same quality of services and facilities as other group home companies but is being singled out so DHR can counter scrutiny and criticism of its oversight of group homes.

"The company believes this is in response to the negative publicity DHR has come under and Evershine is being made an example of," said Quinton Roberts, its lawyer. Roberts said Evershine "will hold its record up in comparison with other group homes."

Abused and neglected

Group homes in Maryland care for 2,700 abandoned, abused, delinquent, neglected and medically fragile children. DHR and two other state agencies are responsible for licensing and monitoring the 500 privately run homes.

As part of its investigation, the newspaper found that Skariah and several other group-home owners used state funding to pay high salaries, rents and other expenses to themselves, relatives and friends without state regulators knowing or checking.

Skariah drove a $41,000 Acura sport utility vehicle expensed to the company and made $135,275 in salary. In 2002, he expensed a $24,000 settlement in a sexual-harassment complaint. He and his wife have been renting two houses to Evershine for $32,400 a year. She also received a $74,813 salary from Evershine for what former employees have called a light-duty job.

Former staff and residents have complained of inadequate medical care, shortages of food and supplies, and mistreatment.

Last year, the company waited until after a 14-year-old boy was killed to report that he had run away from one of its group homes. The company did not file its report within 48 hours, as required by state regulations. The report did not mention that the boy fled Evershine after a counselor assaulted him.

Lawmakers, children's advocates and community leaders who are pushing the Ehrlich administration to make major changes to state oversight of group homes praised DHR's move to shut down Evershine but said it wasn't enough.

"There needs to be systemic reform," said Sen. Ulysses Currie, a Prince George's Democrat who is chairman of the Senate Budget and Taxation Committee. The influential committee has held two hearings on changing the regulatory system and has scheduled a third next month. Sen. Delores G. Kelley, a Baltimore County Democrat, called for consolidation of oversight in a single state agency.

Ella White Campbell, a Randallstown community activist who served on a governor's task force that four years ago recommended consolidation, expressed hope that the state would take action against facilities that are "more harmful to children than helpful."

$104,115 per child

Skariah, who could not be reached for comment, started Evershine in 1999, and the tax-exempt company grew into one of the state's larger operators, earning millions of dollars annually. During a company Christmas party in 2003, McCabe praised the company's work. The state pays Evershine $104,115 a year to take care of each child.

In a July 19 inspection, a DHR inspector complained that Evershine lacked a licensed social worker and nurse on staff and that it did not have plans of care for residents. The inspector also said the company failed to promptly report when a counselor allegedly slapped a youth in the face.

The agency's letter to Evershine notifying the company of the shutdown decision said employee files lacked documentation of training and background checks, and the homes didn't meet cleanliness requirements.

Bonnie Meeks, the acting executive director, asked how DHR could move within a matter of months to shut down Evershine when the director of the agency's licensing and monitoring office didn't find serious violations while inspecting it in 2003 and 2004. The department began finding problems after another inspector took over.

"If we're not aware of [problems], we can't fix them. And when we were made aware of them, we tried to fix them," Meeks said.

Pattern of poor care

Instead of revoking licenses, DHR prefers to help companies improve their practices. It has forced five companies to close during the past five years. But McCabe said in an interview that Evershine demonstrated an "ongoing pattern" of inadequate care that warranted the move.

The secretary said he has been following the company's actions for months and approved the decision when it became clear to him that the company couldn't satisfy the department's expectations for care and facilities.

McCabe said that DHR was taking other steps to bolster oversight, including hiring a consultant to review its licensing and monitoring practices. He said he expects a report within a month.