Nursing home operator failed to pay $29.5 million in taxes


NEWARK, NJ (AP) — The operator of a bankrupt multistate nursing home chain has failed to pay $29.5 million in payroll taxes and unemployment taxes for its employees at 95 facilities that he operated in 11 states, federal prosecutors said.

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

Authorities say his New Jersey-based Skyline management group had about 15,000 employees and Schwartz failed to pay his taxes from mid-2017 to June 2018.

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

“Each count of willful failure to collect, account for and pay employment taxes and tax evasion carries a maximum penalty of five years in prison and a maximum fine of $10,000 “, prosecutors said. Evading unemployment contributions carries a maximum of 5 years in prison and each count of 401K benefits plan fraud carries a maximum of 10 years in prison.

Court documents did not mention an attorney who could speak on his behalf, and phone calls to the company’s office went unanswered.

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

Employees reportedly only found out they didn’t have health insurance when they were billed for medical procedures. A woman reportedly ended up with a $50,000 bill.

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

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


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