A New York resident, Joseph Schwartz, has been sentenced to 36 months in prison for participating in a $38 million employment tax fraud scheme associated with nursing homes he owned nationwide. U.S. Attorney Alina Habba announced the sentence, following Schwartz's previous guilty plea to charges of not paying employment taxes withheld from employees and failing to file an annual financial report.
Schwartz, an insurance broker and the operator of Skyline Management Group LLC, with headquarters in New Jersey, did not fulfill his tax obligations for health care and rehabilitation facilities operated by Skyline in 11 states. The indictment highlighted Schwartz's requirement to collect, account for, and pay withheld taxes to the Internal Revenue Service (IRS). He withheld taxes from employees’ pay from October 2017 to May 2018 but did not pay over $38 million to the IRS.
Additionally, Schwartz had a duty to file an annual Form 5500 financial report for the Skyline 401K plan but failed to comply for the 2018 calendar year. The investigation, leading to Schwartz's sentencing, involved collaboration between several agencies, including the IRS-Criminal Investigation, the Department of Labor-Employee Benefits Security Administration, the FBI, and the Department of Health and Human Services.
The case was prosecuted by Assistant U.S. Attorneys Daniel H. Rosenblum and Kendall R. Randolph, alongside Trial Attorney Shawn Noud of the Justice Department’s Tax Division.
Defense was represented by Kevin H. Marino, Esq.
