Former Nursing Home Chain Owner Charged with Tax Fraud
The former owner of Skyline Healthcare, a company that owned or operated over 100 skilled nursing facilities in 11 states, is facing new charges in Arkansas—a total of 10 felony charges. Former owner Joseph Schwartz is being charged by the Arkansas Attorney General’s office with two counts of tax fraud and eight counts of Medicaid fraud. Over the past several years, Skyline Healthcare facilities across the country have been investigated for numerous allegations, including fraud, resident neglect, unpaid staff wages, bounced checks, short staffing, wrongful death, missing payroll documentation, inadequate COVID-19 prevention measures, and a host of other issues, causing many of the facilities to close their doors.
As early as 2015, the Arkansas Attorney General’s office was already investigating reports that residents of Skyline Healthcare nursing homes were being neglected—a mere six months after the company opened long-term care facilities in the state. Arkansas is not the only state to have taken measures against Skyline Health. States including Massachusetts, Nebraska, Kansas, and Pennsylvania were also forced to take legal action against the company responsible for the well-being of over 7,000 older adults nationwide. In Tennessee, one particular case of gross neglect resulting in death prompted the federal agency Centers for Medicare & Medicaid Services (CMS) to terminate Medicare certification for Skyline facilities in Tennessee.
The most recent charges against Brooklyn, NY resident Joseph Schwartz will require the former company owner to arrive in Arkansas in early January of 2022 to turn himself over to local authorities. Skyline Healthcare was once responsible for the operation of 21 nursing homes in Arkansas, including locations in Little Rock, Fort Smith, Batesville, and West Memphis. Among the charges, it is alleged that Skyline Health failed to pay its bills during the chain’s collapse between 2017 and 2019, and, at the same time, defrauded state and local governments “out of millions of dollars to line their own pockets,” according to Arkansas Attorney General Leslie Rutledge.
After 44 months of investigations by state officials in Arkansas, charges are being brought that allege false monthly statements reporting inaccurate Medicaid costs to the state, and a failure to pay both state income taxes and the state funds that were withheld from employee paychecks. In 2018 and 2019, Skyline’s Arkansas nursing homes brought in tens of millions of dollars in income that was not reported for state taxation purposes. In Medicaid misreporting alone, Schwartz’s former company was able to defraud the state of Arkansas out of $3.6 million. In addition to the criminal charges, the Arkansas Attorney General’s office is reportedly collaborating with other state attorney generals’ offices to discuss possible civil action against Schwartz.
Joseph Schwartz entered the skilled nursing facility industry roughly a decade ago after selling the insurance company he previously owned in Florida. Most of the 100+ nursing home facilities owned or operated by Skyline Healthcare were co-owned by Schwartz’s wife Rose and presided over by their sons Michael and Louis. After receiving the warrant for his arrest last month, it is expected that Joseph Schwartz will be present for a video arraignment hearing scheduled for January in front of Pulaski County District Court Judge Wayne Gruber.
