Joseph Schwartz and wife Rosie Schwartz were operators of Skyline Health Care, a failed multi-state nursing home chain which operated more than 100 nursing homes under numerous subsidiary shell companies. The lawsuit accuses the Schwartzes of racketeering, racketeering conspiracy, negligence and other violations as well as of violating fraud laws in the four states. It seeks unspecified compensatory and punitive damages, and estimates the amount of health insurance premiums stolen at more than $2 million. They stole more than $2 million from employees’ paychecks that was supposed to pay for their health insurance, according to a lawsuit. Dozens of those facilities have been taken over by states in the last two years after the company was unable to pay vendors.
The suit claims the Schwartzes acquired more than 100 nursing homes from 2015 to 2017 in order to generate large amounts of money through Medicare and Medicaid, insurance companies and nursing home residents and their families, and then siphoned, diverted or redirected much of the money to themselves.
The class action lawsuit is on behalf of the thousands of Skyline employees that were screwed over by the Schwartzs. Employees allegedly only found out they didn’t have health insurance when they were billed for medical procedures. One woman allegedly was left with a $50,000 bill.
“Under the mistaken belief that they had health and dental insurance, Class members underwent medical and dental procedures, which would have otherwise been paid for with insurance, only to be billed for the same after being advised that no insurance had in fact been purchased,” the suit claims.
The company or its subsidiaries also operated nursing homes in New Jersey, Pennsylvania, Florida, Massachusetts, Kentucky and Tennessee, according to an Associated Press review. The Schwartzes “designed a scheme to acquire as many facilities as possible, pocket as much revenue as possible, as quickly as possible and then wash their hands of the whole thing,” the lawsuit alleges.