Ex-Nursing Home Tycoon Convicted of Medicaid Fraud and Tax Evasion, Ordered to Pay $1.8M

Joseph Schwartz (inset) operated out of offices above retail space on Marlboro Road in Wood-Ridge, New Jersey (Google Street View image)

More on Joseph Schwartz and Skyline Healthcare:
► Ex-Nursing Home Operator Faces Prolonged Legal Battle
► Ex-Nursing Home Operator Hit With $8.4M Judgment
► Ex-Nursing Home Operator Ordered to Pay $7.7 Million
► Skyline Health Target of Multimillion-Dollar Medical Bill

A former Arkansas nursing home operator on Wednesday pleaded guilty to one count of Medicaid fraud and one count related to tax evasion and was sentenced to a year in the Arkansas Department of Corrections. 

Joseph Schwartz, 72, of New York, also will have to pay $1.8 million in restitution, according to a news release from Arkansas Attorney General Tim Griffin. Schwartz received a 48-month suspended sentence. 

Schwartz was a former insurance agency owner who began operating nursing homes in 2005. His company ran more than 100 facilities in 11 states and operated above a pizza parlor in Wood-Ridge, New Jersey.

He was the majority owner and president of Skyline Healthcare LLC, which operated multiple nursing homes in Arkansas.

Schwartz was accused of submitting false statements in cost reports and other documentation to the state’s Medicaid program. Skyline Health allegedly exaggerated its costs by $6.3 million and was overpaid by $3.6 million. Schwartz was also accused of failing to pay more than $2 million withheld from his Arkansas employees’ paychecks to the state from July 2017 to July 2018.

“He also failed to pay insurance premiums for employees, neglected grocery bills—forcing staff to buy food for residents, and paid himself as an employee in multiple facilities,” Griffin said. 

In 2018, two of Schwartz’s Arkansas nursing homes were placed into receivership by the Arkansas Department of Human Services.

“Schwartz didn’t just take advantage of our vulnerable population, he also preyed on Arkansans who worked in his facilities. By submitting false information to manipulate Medicaid payments and failing to turn over employee tax withholdings, he betrayed the trust placed in him as an employer and the owner of those nursing homes,” Griffin said.

The prosecution of Schwartz also included the offices of the prosecuting attorney for the 6th Judicial District of Arkansas, Will Jones, Internal Revenue Service, Office of Inspector General for the U.S. Department of Health & Human Services and the Arkansas Department of Finance & Administration. Other agencies that collaborated on the case were the South Dakota  Medicaid Fraud Control Unit and the U.S. attorney’s office for the District of New Jersey. 

“This prosecution was the definition of a joint effort,” Griffin said.