N.J. nursing home mogul who ran $38M tax scam reaches 2nd plea deal

For the second time this year, the admitted mastermind of a $38 million tax scam aimed at expanding his nursing home empire has reached a plea deal with federal prosecutors.

Joseph Schwartz, 64, of Suffern, New York, pleaded guilty Monday to two counts of an indictment charging him with willfully failing to pay employment taxes withheld from employees of his company, and willfully failing to file an annual financial report with the Department of Labor for the employee 401K Benefit Plan he sponsored, according to the U.S. Attorney's Office District of New Jersey.

He admitted his guilt to those same offenses in January, but in May, a federal judge threw out that agreement where he faced a year and a day in prison and had agreed to pay $5 million in restitution.

"The court has had an opportunity to review the presentence report and the court hereby rejects the plea agreement," U.S. District Judge Susan Wigenton wrote at the time, without further explanation.

It was unclear what the terms of the new plea deal were, but the U.S. Attorney's Office said Monday Schwartz faced a maximum of 10 years in prison and a $250,000 fine when he is sentenced on April 10, 2025.

No attorney was listed for Schwartz.

Schwartz's Skyline Management was headquartered above a pizza shop in Wood-Ridge, and it was from there that he ran his scheme. All told, he failed to pay $38.9 million in taxes on behalf of employees at this 90 healthcare facilities around the country, investigators said.

Schwartz owned several related companies, one of which purchased an unrelated insurance company in 2015 for $22 million, in order to finance the expansion of Skyline, federal prosecutors said. At the same time, he entered into a $300,000 annual employment contract with the insurance company and also collected commissions on policies sold to Skyline-owned businesses and employees.

Skyline continued expanding with over 90 facilities in 2016 and 2017. Schwartz made himself a registered employee at many of them, and also created a series of staffing companies with an unnamed investor, the office said. Those companies provided not only staffing, but also management services to 89 of Skyline's healthcare facilities.

Schwartz later hired an unrelated company to handle payroll and he withheld the money necessary to sufficiently handle over payroll and unemployment taxes owed to the IRS between mid-2017 and June 2018, leading to the large sum tax liability, an indictment read.

Skyline Healthcare, another company owned by Schwartz under Skyline Management, operated three facilities in New Jersey: Hudson View Care & Rehab Center in North Bergen, Brookhaven Health Care Center in East Orange, and the Voorhees Care & Rehabilitation Center.

Before its collapse, Skyline was poised to acquire Andover Subacute and Rehabilitation Center in Sussex County, the same facility that made headlines for running a makeshift morgue where 17 bodies were found during the COVID-19 pandemic.

The deal ultimately fell through but Schwartz's eldest son was listed among the facility's new owners.

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