New York Broker Pleads Guilty in $38 Million Nursing Home Tax Fraud Scandal

Joseph Schwartz, a New York-based insurance broker and nursing home operator, has admitted to his role in a $38 million tax fraud scheme involving numerous healthcare facilities under his management. Prosecutors revealed that Schwartz, through his company Skyline Management Group LLC, withheld employment taxes from employees but failed to remit the funds to the IRS, instead diverting the money for personal use and business expenses.

Skyline, which managed healthcare and rehabilitation facilities in 11 states, was financed in part by the $22 million sale of Schwartz’s insurance business. Under an employment agreement with the buyer, Schwartz continued to earn commissions on insurance policies sold to Skyline-owned facilities. Despite promises to investors and staff, Schwartz mismanaged the finances of staffing companies created to manage approximately 15,000 employees across the facilities, further exacerbating the fraud.

Additionally, Schwartz failed to file the required annual financial report for the company’s employee 401(k) plan. He now faces significant legal penalties, including up to 15 years in prison and substantial fines. Sentencing is set for April 10, 2025.