According to the lawsuit, filed last month against the West Babylon facility, Bernice Youngblood's son found a photograph in January 2013 of the stripper gyrating in front of the woman.
The image also shows Youngblood shoving dollar bills into the dancer's underwear.
It is not known who shot the photo or when it was taken, and other patients are also in the picture.
A nurse reportedly said the performance was part of an entertainment event.
Youngblood's attorneys say she has lived 85 years as a traditional Baptist, hard-working, lady who has now been defiled. They argue she lacks the mental and physical capacity to protect herself.
Youngblood also spoke at a press conference Tuesday, saying she feels "terrible about it and ashamed."
Her sons are furious, although they have chosen to keep their mother in the facility more than a year after finding the picture in her room.
"I know he wouldn't want anyone standing in front of his mother like that," said Franklin Youngblood.
An attorney for the nursing home said the event was organized by a 16-member planning council of residents who decided to have the strippers, and that Bernice willingly attended. The lawyer also says if you look a little closer at the picture, you'll see a woman smiling next to Bernice.
"She happens to be the live-in girlfriend who holds herself out as the wife of Mr. Youngblood, who is complaining about how his mother was treated," said attorney Howard Fensterman.
The family denies that, saying the woman is a member of the staff.
But East Neck says the woman has always identified herself as Bernice's daughter in law.
"This does not appear to be anything but consensual," said Fensterman.
"Bernice's dignity was destroyed when this disgraceful event occured," said the family's attorney John Ray.
Ray handed over more legal papers today, and quickly tempers flared.
"You submitted a bogus power of attorney in January, you're going to have to answer for that Mr. Ray," said Fensterman.
"And you're going to have to answer for defamation of character," said Ray.
But no one is as angry as Bernice's sons.
"That's wrong, this is not the place to be doing this stuff," Franklin Youngblood said.
But not exactly, says Maryann Russo, whose mother lives here.
She says the event brought out the best in the residents and it was done tastefully.
"They were excited, the ones who were very depressed were happy and smiling, they had a good time," said Russo.
In fact, those with East Neck say the 16 residents who make up the planning council at the home voted unanimously to bring the stripper in as part of an activity program.