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Nursing Home Operators Sentenced for Failing to Pay Employees’ Payroll and Medicare Taxes

April 17, 2025

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Federal District Court Judge Susan Wigenton of the District Court of New Jersey sentenced Joseph Schwartz, former owner of the now bankrupt Skyline Healthcare, to three years in prison and imposed a $100,000 fine for failing to pay workers’ employment taxes to the Internal Revenue Service. See United States of America v. Joseph Schwartz, Crim. No. 22-13 (D.N.J. Apr. 10, 2025), Minutes of Proceeding and Judgment. Judge Wigenton rejected two earlier plea deals that would have sentenced him to shorter terms in prison. A comprehensive discussion of the collapse of Skyline that resulted in the closure of facilities and multiple states getting Court-ordered receiverships over the facilities is available in a 2019 article by NBC News. 

Federal District Court Judge Kenneth Marra for the Southern District of Florida sentenced Paul Walczak to prison for failure, “for more than a decade,” to pay employees’ Social Security, Medicare, and federal income taxes to the Internal Revenue Services. Stet News reports that Walczak, owner of nursing homes and other health-related companies, had failed to comply with two earlier agreements with the IRS and then “‘tried to hide his personal wealth by starting a new business under the name of his then 20-year-old daughter.’” He bought a yacht for more than $2 million, transferred money to himself, and bought luxury goods. Rejecting Walczak’s lawyers’ request that Walczak be sentenced to probation, Judge Marra said, according to The Palm Beach Post, “‘Unfortunately, there’s a perception in this country that the criminal justice system only works in favor of the rich and against the poor. To just let Mr. Walczak walk away because he came up with $10 million to pay the debt reinforces that perception – the rich get away with it and the poor go to prison.’” Judge Marra sentenced Walczak to 18 months in federal prison.

April 17, 2025 – T. Edelman

Filed Under: Article Tagged With: Skilled Nursing Facility, Weekly Alert

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