Joseph Schwartz, $38M Tax Fraud, New Jersey 2023

NEWARK, N.J. – In a shocking display of corporate greed, Joseph Schwartz, a 65-year-old insurance broker and operator of Skyline Management Group LLC, was sentenced to 36 months in prison for his role in a $38 million employment tax fraud scheme involving nursing homes he owned across the country.

According to the indictment, Schwartz willfully failed to pay employment taxes relating to numerous health care and rehabilitation facilities that Skyline operated in 11 states.

Between October 2017 and May 2018, Schwartz caused taxes to be withheld from employees’ pay but failed to then pay over more than $38 million in employment taxes to the IRS. As an administrator of the Skyline 401K plan, Schwartz further had an obligation to file an annual Form 5500 financial report with the Secretary of Labor for calendar year 2018, but knowingly and willfully failed to file the report.

U.S. Attorney Alina Habba announced the sentencing, crediting special agents of the IRS-Criminal Investigation, Investigators with the Department of Labor-Employee Benefits Security Administration, special agents of the FBI, and the Department of Health and Human Services, Office of Inspector General, with the investigation that led to the sentencing in this case.

The government is represented by Assistant U.S. Attorneys Daniel H. Rosenblum and Kendall R. Randolph of the Criminal Division in Newark and Trial Attorney Shawn Noud of the Justice Department’s Tax Division.

Defense counsel for Schwartz is Kevin H. Marino, Esq.

Schwarz, who previously pled guilty to two counts of an indictment charging him with willfully failing to pay over employment taxes withheld from employees of his company, and willfully failing to file an annual financial report (Form 5500) with the Department of Labor for the employee 401K Benefit Plan Schwartz sponsored, will serve his sentence according to U.S. District Judge Susan D. Wigenton in Newark federal court.

The case against Schwartz is a stark reminder of the consequences of corporate malfeasance and the importance of holding individuals accountable for their actions.

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