All we can say is, it is about time. We have complained for several years that something needs to be done about the bad apples (criminals) that have given the nursing home industry a bad reputation, and sullied the reputations of all those who are trying hard to provide the best care they can, given the tough environment.
Probably the worst abuser of the system, and someone who should have been put in jail a while ago and never allowed to own, operate or get a license for a nursing home ever again, has finally agreed to plead guilty to a $38 million tax fraud. We are referring, of course, to the notorious Joseph Schwartz, owner of Skyline Healthcare, who walked away from about 100 nursing homes several years ago, having sucked all the cash out of them that he could, leaving cupboards and meds cabinets empty.
One “easy” way to steal from the system is to deduct employment taxes from your employees’ paychecks but never send the money in, keeping it enriching your own bank account and that of your family. Schwartz admitted to this. He also pleaded guilty to not filing Form 5500 related to the company’s 401(K) plan, and we assume that means he kept some of those funds as well. Think about it, how much of a scumbag do you have to be to do this to employees who are just struggling to get by? Usually, this crime is committed by a company owner who is about to go bankrupt, as a last-ditch effort to survive. But not in this case. This was willful stealing for self- enrichment.
Unfortunately, the employment tax fraud count is punishable by only a maximum penalty of five years in prison and a $250,000 fine. They should try to recover everything that Schwartz stole. The failure to file Form 5500 for the retirement plan carries a maximum penalty of 10 years. We are sure this was a plea deal with the promise to get out early for good behavior. He may only end up spending a few years in prison, but we hope he gets the maximum and then be made to work in a nursing home for a few years afterward changing diapers and cleaning bedpans. A message has to be sent to the bad guys out there who have usually just laughed it off, all the way to the bank.
So, thank you to FBI Special Agent in Charge, James Dennehy, and U.S. Attorney Philip Sellinger. You succeeded in removing one of the most rotten of all apples out there, but there is still more work to be done. And we are sure many nursing home operators are glad you did it.
