Joseph Schwartz, former head of Skyline Healthcare, was convicted and sentenced to three years in federal prison, followed by three years of supervised release, for his role in a multi-million-dollar tax scam.

According to court documents filed in the U.S. District Court in the District of New Jersey on Friday, Schwartz was convicted on “willful failure to pay over employment taxes” as well as failing to file the form 5500 – an annual report of employee benefit plans.

The sentence, handed down by the U.S. District Judge Susan Wigenton, also includes a $100,000 fine. Schwartz will also be liable to pay restitution of $5 million.

Schwartz’s sentencing marks a significant shift from what had been proposed in previous plea agreements in November last year.

Schwartz had pleaded guilty to a $38 million in employment tax fraud scheme in November of last year, involving nursing homes nationwide. After a previous plea deal had been rejected in May due to its leniency, Schwartz had faced up to 10 years in prison and a $250,000 fine. In the end, he admitted to willfully evading taxes and mismanaging employee 401(k) plans, causing significant financial loss to the U.S. government.

Out of the 22 original counts of criminal activity, the court dismissed 20, the court filing states.

Schwartz’s fraudulent activities involved diverting employees’ payroll tax withholdings that were meant for the IRS, severely damaging his once fast-growing nursing home empire and tarnishing the broader industry’s reputation.

Skyline Healthcare, which once operated 95 nursing homes across 11 states, collapsed under scrutiny and financial mismanagement, leaving many facilities in crisis and residents vulnerable.

The case has drawn attention not only due to the magnitude of the financial crime but also because of the cost paid by nursing home staff and residents who were left to deal with the aftermath.

Schwartz is scheduled to begin serving his sentence immediately.