Feds: Nursing home operator failed to pay $29.5M in taxes

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NEWARK, N.J. (AP) — The operator of a failed multi-state nursing home chain failed to pay $29.5 million in payroll and unemployment taxes for his employees at 95 facilities he operated in 11 states, federal prosecutors said.

Authorities on Thursday arrested Joseph Schwartz, 62, of Suffern, New York, and charged him in federal court in New Jersey with willful failure to pay over employment taxes, evasion of unemployment taxes and failure to file annual financial reports.

According to authorities, his New Jersey-based Skyline Management Group had approximately 15,000 employees and Schwartz failed to pay their taxes from mid-2017 through June 2018.

Prosecutors also alleged Schwartz failed to file annual financial reports related to Skyline's 401K retirement plan contributions that are automatically withdrawn from an employee's gross pay.

“Each count of willful failure to collect, account for, and pay over employment taxes and tax evasion is punishable by a maximum penalty of five years in prison and a maximum $10,000 fine,” prosecutors said. Evasion of unemployment taxes is punishable by a maximum of 5 years in prison and each count of 401K benefit plan fraud is punishable by up to 10 years in prison.

Court documents did not list a lawyer who could speak on his behalf and telephone calls to the company's office were not answered.

Schwartz was also sued in federal court in 2020 by former employees in multiple states who claimed they were left without health insurance even though money had been deducted from their paychecks.

Employees allegedly only found out they did not have health insurance when they were billed for medical procedures. One woman allegedly was left with a $50,000 bill.

Five plaintiffs who worked at Skyline-operated facilities in South Dakota, Kansas, Nebraska and Arkansas filed the suit. Skyline facilities were also in New Jersey, Pennsylvania, Florida, Massachusetts, Kentucky and Tennessee, according to an Associated Press review.

Nebraska's attorney general on Thursday filed a lawsuit accusing Schwartz and his wife of committing Medicaid fraud involving several nursing homes in the state.

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