The U.S. Attorney in New Jersey has charged Joseph Schwartz, the owner of a former chain of nursing homes, including 10 in the Philadelphia area, with allegedly failing to pay $29.5 million in payroll taxes to the IRS from mid-2017 to June 2018.
Schwartz’s Skyline Healthcare LLC, which has racked up more than 100 nursing homes across the country in less than two years, suffered a rapid collapse in the spring of 2018 as the company ran out of cash. Regulators in Pennsylvania and several other states have put in place emergency operators to protect thousands of residents.
Schwartz’s meteoric rise and fall has turned into a rallying point for advocates demanding deeper reviews of nursing home license applicants, including an assessment of an applicant’s financial strengths and capabilities. , as well as its track record in other states.
READ MORE: Skyline Healthcare’s rapid growth prompted questions from industry experts.
Now prosecutors are catching up with Schwartz, 62, a former insurance broker from Suffern, NY
Last month, Schwartz faced criminal charges in Arkansas for allegedly overcharging Medicaid by $3.6 million.
On Wednesday, Nebraska’s attorney general filed a civil lawsuit alleging Schwartz defrauded the state’s $59.7 million Medicaid program because his nursing homes failed to keep proper care records, failed to failed to disclose payments to related companies and had committed other violations of Medicaid regulations.
A spokesperson for the U.S. Attorney in New Jersey identified Schwartz’s attorney as Robert Fedor, of Cleveland, Ohio. Fedor did not respond to a request for comment on Friday. The U.S. prosecutor filed the indictment under seal on January 12. It was unsealed on Thursday.
READ MORE: Skyline has run out of money to operate.
Federal authorities arrested Schwartz on Thursday. He is now housebound in Suffern, although Schwartz is expected to face trial on criminal charges in Arkansas next week, the U.S. attorney’s spokesman said.
The businessman’s denouement has some in the industry wondering why Schwartz hasn’t retired after selling his insurance brokerage firm, Oxford Coverage Inc., in 2015 for $22 million. dollars to Hub International Northeast Ltd.
Instead, he remained an employee of Hub, with an annual salary of $300,000. Additionally, he took commissions on the insurance policies he sold to Skyline’s growing nursing home empire. Schwartz listed the company headquarters as an office above a pizzeria in Wood-Ridge, NJ
While Skyline took over dozens of nursing homes in at least 11 states — including many from a company that retained ownership of the real estate — between mid-2016 and December 2017, it made one employee employed in some of them, according to the indictment in New Jersey.
READ MORE: Chaos at Skyline nursing homes in the final days.
Such was the case at the Rosemont Care & Rehabilitation Center on the mainline, where he raised $2,500 on every bi-weekly paycheck, The Inquirer reported in 2018.
The Pennsylvania Department of Health ousted Skyline from Rosemont and eight other nursing homes in April 2018 after determining that Skyline “can no longer operate the facilities for tax purposes.” All are under new management.
In addition to failing to remit payroll taxes to the federal government, as the federal prosecutor alleges, Schwartz failed to pay health insurance premiums for employees and failed to remit union dues at certain Pennsylvania establishments. where SEIU Healthcare Pennsylvania stands for Practical Nurses and Licensed Practical Nurses. The investigator reported.