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You tell them that the money is mom's. She needs some things. You could tell them you will contact the authorities. Keeping it, I would think, may be fraud.
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Look for Elder Abuse Legal Advice. Your state governor's office probably has an Elder Protective Agency. Do things politely after becoming informed. If you don't get the desired reaction and your mother is entitled to all or some of the funds, move to commencing with legal action by qualified people.

Remember, this is business. Remain positive and friendly because your mother will be living there. Let the lawyers get vicious if necessary to get results. You are doing what you have to do to take care of your mom. Don't make it personal, don't make enemies. By-the-way, some elder abuse services are free. Believe and it will work out.
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According to a June, 2020 advisory from the IRS, a care facility cannot seize or keep a resident’s stimulus check. This was published in the Washington Post.
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Have you asked them? What did they say?
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I am assuming the check was deposited to her Personal Needs account. This money has to be spent by next May? whenever we got the checks. If not, it will effect her Medicaid unless you are under the 2k allowed. (Or whatever the cap is in your state) PNA accounts are part of the 2k.

You need to see the person who handles giving out the money. You will need receipts. I would also transfer that 1200 out of her PNA account. Hope you you have POA to do this.

Here's info on the PNA

https://www.cga.ct.gov/PS99/rpt%5Colr%5Chtm/99-R-0025.htm

I have an article concerning the Stimulus. First thing is it cannot be used for Moms care. NH is not entitled to it. This is how you can use it:

"Are There Restrictions on How I Can Spend the Stimulus Money?

In general, a resident can spend the stimulus money as they wish, including gifts and charitable contributions. This is the resident’s money to spend on their wants and needs."

I think this is the correct addy for the stimulus check and that NHs can't touch it.

https://www.google.com/url?sa=t&source=web&rct=j&url=https://ncler.acl.gov/getattachment/Resources/Nursing-Home-Residents-and-Stimulus-Checks-(1).pdf.aspx%3Flang%3Den-US&ved=2ahUKEwjKoqSR8sDsAhU_lXIEHZuoA7cQFjABegQIAhAB&usg=AOvVaw2oRhhdl0rbH0uJdTv3Jia2
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