Three years after his nursing home operations imploded, leaving thousands of residents in danger and staff unpaid, former Skyline Healthcare owner Joseph Schwartz is facing criminal charges in Arkansas.
Even without their former empire, Schwartz and his family have continued to operate some nursing homes — with questionable success and seeming legal impunity. But Schwartz now faces eight counts of Medicaid fraud related to the submission of false statements regarding $6 million in cost reports sent to the Arkansas Medicaid Program. He also faces one count of attempting to evade or defeat taxes and one count of willful failure to pay or file tax returns.
“These charges come after a 44-month-long investigation into Skyline’s wrongdoings,” Arkansas Attorney General Leslie Rutledge announced Monday. “I will not sit idly by while anyone defrauds the state and federal government out of millions of dollars to line their own pockets.”
Schwartz is set to turn himself in by early January, NBC News reported Monday. If eventually convicted on any of the charges, all of which are felonies, Schwartz would likely be precluded from Medicare and Medicaid participation for years to come.
That could do what public outrage and civil suits in states from Massachusetts to South Dakota have so far failed to do: force Schwartz, a former insurance salesman, out of the nursing home business.
Industry observers have used Schwartz’s ongoing involvement in at least four nursing home ownership structures to urge more transparency within the sector, noting that state governments have little information that allows them to weed out bad actors.
And Skyline’s actions, as outlined by public health officials and prosecutors, haven’t frequently fueled scorn and criticism. Under Schwartz’s ownership, Skyline moved into more than 100 nursing homes between 2015 and 2018, when its collapse came hard and fast.
In Arkansas, Rutledge alleges Skyline exaggerated its costs by $6.3 million and received $3.6 in excess payments for services at eight nursing homes. Schwartz is also charged with failing to pay more than $2 million withheld from Arkansas employees’ paychecks to the state from July 2017 to March 2018.
In May 2018, Pennsylvania officials appointed new operators for nine facilities after it determined that Skyline “could no longer fiscally operate” them. In South Dakota, officials placed 19 Skyline buildings where residents were at risk of running out of food and medication into receivership. And before that, Skyline made headlines for failing to make payroll at 36 nursing homes in Nebraska and Kansas. Skyline cooperated in the receivership process there.
Skyline also had facilities in Tennessee, Florida, and Massachusetts. In the latter, state officials closed five nursing homes and Attorney General Maura Healey cited the company $84,950 in penalties for failing to pay 106 workers there.
Some of the Skyline properties that didn’t go into receivership either closed or were taken over by previous owners.
But Schwartz is still connected to at least four facilities, according to records, and relatives also operate several nursing homes. Among them is an Andover, NJ, facility that was ravaged by COVID-19.
Schwartz’s son, Louis, once a vice president at Skyline, is listed as a partial owner of the former Andover Subacute II nursing home. It was the scene of one of the nation’s worst COVID-19 outbreaks; officials last April found 17 bodies stacked in a tiny morgue there after receiving an anonymous tip.
Regulators later fined the owners $221,115 for compliance issues, and the New Jersey attorney general began investigating.
A spokesperson for the Arkansas attorney general office Tuesday declined to say whether the state is investigating other Schwartz family members or whether officials are working with other states to gather more evidence. NBC reported, however, that several states may be banding together to bring civil charges.
A message left with Schwartz’s attorney Monday was not returned by deadline, but Little Rock-based Bill James previously told local media he expects his client to plead not guilty.