A 58-year-old man with dementia and limited mobility died from brain injuries last fall after being severely beaten by caregivers at an assisted-living facility in northern Minnesota, according to a state investigation released this week.

The facility, Chappy's Golden Shores in Hill City, has since closed after having its license suspended by state regulators, and on Friday it drew an unusual high-level rebuke from Gov. Tim Walz.

Local police said they are investigating the alleged assault and may broaden their probe. The Minnesota Department of Health suspended its license for "multiple and repeated serious incidents affecting vulnerable persons."

According to a state investigation, Steven G. Nelson, a resident at the facility who had cognitive disabilities and depended on a wheelchair, was brutally beaten soon after being admitted to the facility. Investigators concluded that one staff member repeatedly punched Nelson in the face, while another held him down and a third employee watched but did not intervene. The beating continued until Nelson "was bleeding from his head and his face," the report said. Nelson attempted to defend himself, but was unable to do so because of his disability, according to the state report.

He suffered internal brain bleeding and died weeks later at St. Mary's Medical Center in Duluth, according to the state report and family members.

"I am outraged by the abuse exposed in this investigation," Walz said in a statement Friday. "All Minnesotans deserve safety and dignity. My administration will work tirelessly to root out elder abuse, ensure thorough oversight and investigations, and provide justice to victims and their families."

Tricia Olson, the owner of Chappy's Golden Shores, denied that an assault occurred and said the state's findings are based on false statements made by disgruntled former employees. State investigators, she said, failed to interview the alleged perpetrator and other key employees, including the owner, who could have disputed the findings. Olson said that no one reported an assault to her and that she learned about the allegation only when the Health Department moved to suspend her facility's license on Dec. 6.

"One hundred percent, this never happened," Olson said. "This client was extremely happy, and nobody had any issues or concerns about his well-being while he was here." She added: "We've been in business for 23 years and never had an issue with anything."

The state's report is just the latest in a string of maltreatment findings against Chappy's Golden Shores stemming from visits by state investigators in November. In one case, a resident suffering from Parkinson's disease and anxiety was subjected to a torrent of physical and emotional abuse, including being hit with a frying pan, when he sought to leave the facility, investigators said.

All told, the state has substantiated 10 incidents of maltreatment at Chappy's, concluding that three residents were victims of neglect, seven were abused and one was financially exploited.

In a separate state compliance report in November, the Health Department also found that Chappy's failed to ensure that employee background checks were conducted as required. Seven employees were found to have been working in violation of state law, including three who were disqualified due to criminal offenses. State investigators found that one employee was registered as a predatory offender and had been employed at Chappy's for more than a year.

"The unusual scope and nature of these findings underscore why we took the rare step of issuing an immediate suspension," said state Health Commissioner Jan Malcolm.

Hill City Police Chief Josh Kimball said his department and the Aitkin County Sheriff's Office this week opened an investigation into the Nelson incident, and expect to broaden the inquiry based on the multiple state findings of maltreatment.

"This is deeply disturbing to say the least," Kimball said.

Sister recalls 'gentle soul'

Relatives of Nelson, who received copies of the state report this week, said they want the alleged assault investigated as a possible homicide.

"I hope someone goes to jail for a very long time," said Connie Billmeier, Nelson's older sister who lives in Champlin. "If we don't hold someone accountable, then it's going to happen to someone else."

Billmeier described her younger brother as "a gentle soul" who loved fishing but who struggled since birth with a mild cognitive impairment and more recently with signs of dementia. He required help with most daily activities, including bathing and dressing, and would sometimes become confused about names and events, relatives said. As a result, Billmeier said she did not initially believe her brother when he described being assaulted.

"Steven kept saying, 'People punch me in the face,' " Billmeier said. "All I could think was: How could anyone punch my brother in the face? I should have believed him."

Mark Nelson, a brother who lives in Minnetonka, recalled being surprised by Steven's frail condition when he visited him at Chappy's in October, just before his death. He looked about half his regular weight and was staring stoically without responding to visitors, Nelson said.

State health investigators said the alleged assault was kept hidden by staff and was not immediately reported to the state's maltreatment reporting system as required by law.

"Facility leadership promoted a culture that encouraged repeated occurrences of abuse by discouraging staff from reporting suspected maltreatment, falsifying records, and failing to train staff to the needs of the client," state investigators wrote, concluding that the facility was responsible for the alleged abuse.

Founded 23 years ago, Chappy's Golden Shores had a reputation for accepting a diverse mix of residents with mental and physical disabilities who required a high level of care and often had difficulty finding stable housing. People living at the facility had a range of health conditions, including Alzheimer's, schizophrenia, depression and personality disorders, staff members said. Some had been kicked out of other facilities because of behavioral problems. At the time of its license suspension, the facility had 38 residents ranging in age from 23 to 99, Olson said.

Chappy's has appealed the 90-day suspension of its license. All of the people who were living at the facility in early December have since moved to other locations.

Chris Serres • 612-673-4308 Twitter: @chrisserres