NEWARK, N.J. – Federal officials on Friday said they had arrested a nursing home chain owner accused of defrauding the state of Arkansas of more than $3.5 million on separate tax charges.
U.S. Attorney Philip R. Sellinger announced that 62-year-old Joseph Schwartz was charged with 18 counts of willful failure to pay employment taxes, two counts of evasion of employment taxes and two counts of failure to file annual financial reports with the Department of Labor.
The indictment accused Schwartz, the principal owner of Skyline Management Group LLC, of not paying either employment or unemployment taxes on workers in 95 different health care and rehabilitation facilities in 11 states, including Arkansas. In total, federal prosecutors said the amount of the employment tax fraud topped $29.5 million.
These new charges are on top of charges of fraud leveled at Schwartz by Arkansas Attorney General Leslie Rutledge, who claims Skyline exaggerated costs billed to the Arkansas Medicaid Program by nearly $6.29 million. The AG said that led to Schwartz’s company getting overpaid to the tune of $3,610,912.
Each count of willful failure to collect could come with a five-year sentence and up to a $10,000 fine. The counts of evasion of unemployment taxes and 401K benefit fraud each come with five and 10-year sentence maximums, as well as fines of up to $100,000.
The U.S. Attorney’s Office noted that the charges against Schwartz are allegations and that he is still presumed innocent unless and until proven guilty.