On January 24, the Department of Justice announced the indictment of Joseph Schwartz, an insurance broker and the former owner of Skyline Healthcare, a network of healthcare and rehabilitation facilities. Schwartz faces 22 federal charges of labor violations and failure to pay federal taxes.

According to the DOJ, in late 2016, Schwartz and an associate allegedly created several businesses that provided staffing and management services for employees of the Skyline-owned facilities. The staffing companies were technically owned by other individuals, but Schwartz is said to have controlled their finances and operation.

The indictment, unsealed by a federal district court in Newark, New Jersey, alleges Schwartz “failed to collect, truthfully account for, and pay over millions of dollars in payroll taxes owed to the IRS on behalf of his employees as required by law.”  Schwartz allegedly failed to pay $38,982,016 in payroll taxes for the 15,000 employees he had at 95 facilities across 11 states.

In addition, Schwartz allegedly did not file required reports with the Department of Labor relating to the financial condition, investments, and operation of Skyline’s 401k retirement plan.

If convicted, Schwartz faces a maximum penalty of five years in prison for each count of willful failure to collect, account for, and pay over employment taxes, five years in prison for each count of tax evasion, and ten years in prison for each count of failure to file a benefit plan report. Schwartz already faces 10 state felony charges in Arkansas for tax and Medicaid fraud, as well as various civil suits.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.  The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with tax fraud investigations.  If you need assistance with such a matter, please contact us today.