By: Richard L. Smith
A New York man pleaded guilty to his role in a $38 million employment tax fraud scheme involving nursing homes across the United States, the U.S. Justice Department announced.
Federal officials said Joseph Schwartz, 64, of Suffern, New York, appeared before the U.S. District Judge Susan D. Wigenton in Newark federal court, where he admitted to willfully failing to pay employment taxes withheld from employees of his company and neglecting to file a required financial report for a 401(k) benefit plan he sponsored.
Schwartz operated Skyline Management Group LLC, headquartered in New Jersey, which managed numerous health care and rehabilitation facilities in 11 states.
From October 2017 to May 2018, he withheld taxes from employees' paychecks but failed to remit over $38 million in employment taxes to the IRS.
Additionally, he knowingly did not file the required annual financial report for Skyline’s 401(k) plan for the 2018 calendar year.
“Schwartz ran a vast, multistate nursing home empire, but cheated taxpayers out of more than $38 million so he could line his own pockets,” said U.S. Attorney Philip R. Sellinger. “Having admitted his crime, he will now be held accountable.”
The charges carry significant penalties.
The employment tax fraud count could result in up to five years in prison and a $250,000 fine, while the failure to file the financial report is punishable by up to 10 years in prison and a similar fine.
Sentencing is scheduled for April 10, 2025.