Skyline Healthcare expanded rapidly, beginning in 2015, until the New Jersey-based company was responsible for the care of more than 7,000 residents in more than 100 facilities in 11 states. Almost as quickly as the company expanded, it collapsed, between 2017 and 2019, with many facilities closing and others taken over by states to ensure that residents were cared for and employees and vendors were paid. Litigation against Skyline’s owner, Joseph Schwartz, has followed.
Most recently, the U.S. Attorney in New Jersey charged Schwartz with 18 counts of willful failure to pay employment taxes (totaling $29.1 million) and two counts of evasion of unemployment taxes (totaling $367,027) from mid-2017 through June 2018, relating to approximately 15,000 employees at 95 facilities in 11 states. Schwartz was also charged with two counts of failing to file with the Department of Labor annual financial reports (Form 5500) relating to Skyline’s 401K Retirement Plan Contributions. Each count related to employment taxes and tax evasion “is punishable by a maximum penalty of five years in prison and a maximum $10,000 fine.”
Schwartz also faces multiple criminal and civil lawsuits in other states.
The Arkansas Attorney General charged Schwartz in December 2021 with “eight counts of Medicaid fraud resulting from the submission of false statements in cost reports and other documentation to the Arkansas Medicaid Program,” alleging that “In 2018, Skyline exaggerated its costs by $6,285,216 and received an overpayment of $3,610,912 for the eight nursing home facilities in Arkansas.” The state’s 44-month investigation also led to charges that Schwartz failed to pay $2,012,177 withheld from employees’ paychecks to the state between July 2017 and March 2018.
The Nebraska Attorney General filed a civil lawsuit in 2022 charging Schwartz and Skyline Healthcare with “making false records, failing to maintain documentation and fraudulent misrepresentation” in their agreements with Medicaid, resulting in overpayments of $3 million.
The Massachusetts Attorney General sued Schwartz in June 2019, charging him with failing to pay wages totaling more than $64,749 to 106 workers at five Massachusetts nursing facilities (which the state successfully sought receiverships for and subsequently closed for endangering residents).
Litigation by residents/families and vendors is also pending.
January 27, 2022 – T. Edelman
 Laura Strickler, Stephanie Gosk, and Shelby Hanssen, “A nursing home chain grows too fast and collapses, and elderly and disabled residents pay the price,” NBC News (Jul. 19, 2019), https://www.nbcnews.com/health/aging/nursing-home-chain-grows-too-fast-collapses-elderly-disabled-residents-n1025381
 Laura Strickler, “Former owner of national nursing home chain faces 22 federal tax, labor charges,” NBC News (Jan. 20, 2020), https://www.nbcnews.com/health/health-news/former-owner-national-nursing-home-chain-arrested-federal-agents-new-y-rcna12945
 U.S. Attorney’s Office, District of New Jersey, “Insurance Producer Charged with Failing to Remit $29.5 Million in Payroll Taxes” (News Release, Jan. 20, 2020), https://www.justice.gov/usao-nj/pr/insurance-producer-charged-failing-remit-295-million-payroll-taxes
 Arkansas Attorney General, “Rutledge Announces Arrest Warrant Issued for Skyline Nursing Home Owner, Joseph Schwartz” (News Release, Dec. 20, 2021), https://arkansasag.gov/news_releases/rutledge-announces-arrest-warrant-issued-for-skyline-nursing-home-owner-joseph-schwartz/; Eric Besson, Lisa Hammersly, “Ex-nursing home chief faces fraud charges, Arkansas attorney general says,” Arkansas Democrat Gazette (Dec. 21, 2021), https://www.arkansasonline.com/news/2021/dec/21/ex-nursing-home-chief-faces-charges/
 Lori Pilger, “NY couple accused of $59.6M Medicaid fraud involving chain of Nebraska nursing homes,” Lincoln Journal Star (Jan. 20, 2020), https://theindependent.com/news/state-and-regional/crime-and-courts/ny-couple-accused-of-59-6m-medicaid-fraud-involving-chain-of-nebraska-nursing-homes/article_0b949c48-4e59-5f11-be71-b1346421873a.html#:~:text=The%20Nebraska%20Attorney%20General%27s%20Office%20has%20accused%20a,of%20a%20chain%20of%20nursing%20homes%20in%20Nebraska
 Massachusetts Attorney General, “Skyline Healthcare Owner, Five Massachusetts Nursing Homes Cited for Wage Theft” (Press Release, Jun. 27, 2019), https://www.mass.gov/news/skyline-healthcare-owner-five-massachusetts-nursing-homes-cited-for-wage-theft