55°
Joseph Schwartz, 64, of Suffern, owned Skyline Management Group, which was based in the Wood-Ridge and amassed 95 nursing homes across 11 states.
These once included Hudson View Care & Rehab Center in North Bergen, Brookhaven Health Care Center in East Orange and the Voorhees Care & Rehabilitation Center.
Over a period of only seven months, beginning at the end of October 2017, Schwartz withheld $38.9 million that he was required to forward to the IRS through taxes on his 15,000 or so employees, U.S. Attorney for New Jersey Philip R. Sellinger said.
Schwartz also failed to file an annual Form 5500 financial report with federal authorities for calendar year 2018, which he was obligated to do as an administrator of the Skyline 401K plan, the U.S. attorney said.
Schwartz stiffed vendors, utilities, landlords -- even his staffs -- authorities charged. He diverted Skyline-generated profits, instead, into a string of shell companies that existed in name only, they said.
It wasn't long before the company began bleeding cash and collapsed, flinging the care of 7,000 residents -- as well as the futures of the employees -- into limbo, investigators said.
Authorities in states closed some facilities while forcing others into receivership or simply finding new operators themselves. Meanwhile, employees and vendors went unpaid.
Schwartz, meanwhile, became a poster boy of sorts for advocates demanding greater scrutiny of people applying for nursing home licenses.
Arkansas authorities accused Schwartz of overbilling Medicaid by $3.6 million. Their counterparts in Nebraska charged him, his wife and the company with nearly $60 million worth of Medicaid fraud.
Civil suits were also filed against Schwartz and his businesses in several states.
One of them, filed in federal court in Newark by some of his former employees, accuses Schwartz of stealing more than $2 million in payroll deductions that were to help fund their health insurance. Several said they ended up burdened by tens of thousands of dollars in surprise medical debt.
And that's not all.
Schwartz’s son, Louis, was an officer with Andover Subacute and Rehabilitation Center, a nursing home in Sussex County where the bodies of 17 residents were found stacked in a makeshift morgue during the initial days of COVID in 2020. The elder Schwartz failed in a bid to buy the facility.
IRS agents arrested Schwartz at his five-bedroom, four-bath gated home in Rockland County last January. A U.S. District Court judge in Newark allowed him to remain free on home detention while the case against him proceeded.
Rather than risk the potential outcome of a trial, Schwartz ended up taking a deal from the government.
He pleaded guilty in federal court in Newark on Wednesday, Jan. 17, to willfully failing to pay over employment taxes withheld from employees of his company and willfully failing to file the annual Department of Labor financial report for the employee 401K benefit plan.
U.S. District Judge Susan D. Wigenton scheduled sentencing for May 22. Schwartz remains free until then on a $2 million bond secured by his house.
Sellinger credited special agents of the IRS-Criminal Investigation; investigators with the Department of Labor-Employee Benefits Security Administration; and special agents of the FBI with the investigation leading to the guilty plea secured by Assistant U.S. Attorney Kendall Randolph of his Criminal Division in Newark and Trial Attorney Shawn Noud of the Justice Department’s Tax Division.
Click here to follow Daily Voice Parsippany-Troy Hills and receive free news updates.
