Joseph Schwartz, the former head of Skyline Healthcare, faced a major setback as a federal judge rejected his plea deal related to a $38 million tax scam.
Schwartz, who once oversaw a vast network of 95 nursing facilities across 11 states, had previously pleaded guilty to charges of failing to pay employment taxes and neglecting to file necessary financial reports.
According to a report in NJ.com, the plea deal had proposed a prison sentence of just over a year and $5 million in restitution. However, U.S. District Judge Susan Wigenton dismissed the agreement after reviewing the presentence report, potentially exposing Schwartz to a much harsher sentence.
“The case may be disposed of less favorably toward the defendant than the plea agreement contemplated,” Wigenton wrote. “Should the defendant wish to withdraw from the plea agreement and retract his plea of guilty, he must do so by June 21.”
Schwartz’s case will continue, with the possibility of a more severe outcome when sentencing proceeds on July 17, should he not withdraw his guilty plea.
Skyline Healthcare’s rapid expansion and subsequent collapse were marred by allegations of severe financial mismanagement and neglect. The company was accused of not paying vendors, utilities, landlords, or staff, and funneling money through shell companies to evade responsibility. These actions led to state regulators intervening and taking control of many of Skyline’s facilities.
The plea agreement was negotiated in good faith between defense counsel and experienced prosecutors in both the US Attorney’s Office and the Department of Justice Tax Division, according to Schwartz’s attorney, Kevin Marino.
“We are hopeful that when the full record is presented, the court will find that the stipulated resolution is a fair and appropriate one,” Marino said.
Skyline Healthcare was launched in 2005 with a single nursing home in New Jersey, but eventually grew to support a network of health care and rehabilitation facilities across Florida, Arkansas, North and South Dakota, Kansas, as well as New Jersey and elsewhere.
