NJ/Fraud- $3.6M Medicaid Fraud Allegations Tied To Ex-NJ Nursing Home Owner

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[ MM Curator Summary]: A NJ nursing home operator is on the run from the law.


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Crime & Safety

Arkansas authorities are looking for Joseph Schwartz, linked to Andover Subacute’s facilities where 17 bodies piled up during the pandemic.


Jennifer Jean Miller,

Patch Staff


Posted Wed, Dec 29, 2021 at 3:41 pm ET


Arkansas authorities are looking for Joseph Schwartz, linked to Andover Subacute’s facilities where 17 bodies piled up during the pandemic. (Shutterstock)

ANDOVER TOWNSHIP, NJ — An ex-owner of a Sussex County nursing home where bodies were stacked in a makeshift morgue after COVID swept through it, is being sought in Arkansas for tax evasion and a $3.6 million Medicaid fraud.

That investigation has raised questions in New Jersey about the status of a state investigation into the Andover Subacute facilities, now known as Limecrest Subacute and Rehabilitation Center and Woodland Behavioral and Nursing Center, where Joseph Schwartz, who owns Skyline nursing homes, is linked to the ownership.

NBC Nightly News with Lester Holt aired a segment in November about what happened at the Andover Subacute facilities during the pandemic below, interviewing a former employee who spoke for the first time about what happened on Easter weekend in April 2020, when the morgue became so packed, one body was placed in a storage shed.

Find out what’s happening in Hopatcong-Sparta with free, real-time updates from Patch.

RELATED: Watch NJ Nursing Home Ex-Employee Talk About ‘Makeshift Morgue’

In the Lester Holt broadcast, interviewer Stephanie Gosk spoke about the outcome of the federal inspections at Andover Subacute after the 2020 incident, which later changed its name, referring back to NBC News’ own 2019 investigation into Schwartz’s company.

Find out what’s happening in Hopatcong-Sparta with free, real-time updates from Patch.

Schwartz’s Skyline reportedly once had a stake in the Andover facilities, with his son Louis still one of the owners, NBC News reported in its exposé below:


The Allegations From Arkansas

Arkansas’ Attorney General Leslie Rutledge said authorities are looking for Schwartz after a 44-month investigation into his company Skyline nursing homes, who Rutledge said received $3.6 million in 2018 from overbilled Medicaid payments for eight facilities that he owns in Arkansas.

According to a recent news release from Rutledge’s office, Schwartz’s company ballooned its billings to more than $6.2 million by filing bogus cost reports, statements and other documents, which resulted in an overpayment to his company of more than $3.6 million from Arkansas’ Medicaid Program.

Rutledge said Schwartz was also charged with attempting to evade taxes by taking out over $2 million in income taxes from his Arkansas employees’ paychecks between July 2017 and March 2018, without forwarding those tax withholdings to the State of Arkansas.

He additionally took in “tens of millions of dollars in gross income,” from his facilities in 2018 and 2019, for which he never filed tax returns, according to Rutledge.

“These charges come after a 44-month-long investigation into Skyline’s wrongdoings, and I will not sit idly by while anyone defrauds the State and Federal government out of millions of dollars to line their own pockets,” Rutledge said. “It’s important for Arkansans to know if they suspect Medicaid fraud, they should immediately contact my office.”

Her office referred the case to the Attorney General’s Office by the Office of Medicaid Inspector General, following a joint investigation with the HHS OIG- Office of Investigation, Nebraska Medicaid Fraud and Patient Abuse Unit, Kansas MFCU, Maryland MFCU and South Dakota MFCU.

Local Response To Allegations Against Schwartz

Members of Sussex County’s Board of County Commissioners responded to the news about the Arkansas warrant for Schwartz on Wednesday, stating they plan to draft a letter to New Jersey’s Acting Attorney General Andrew J. Bruck for an update on the state’s investigation into Andover Subacute, which the commissioners plan to present at their next public meeting.

According to a news release from the commissioners, they say that Governor Phil Murphy’s administration continues to stonewall Open Public Records Act requests that Sussex County’s attorney first submitted in May 2020.

RELATED: Still No Answers In Case Of NJ ‘Makeshift Morgue’ Nursing Home

The County Commissioners additionally say that “a yearlong investigation by the New Jersey Attorney General into Andover Subacute and other nursing homes has produced no news.”

A special public question that was on Sussex County ballots in the Nov. 2 General election, overwhelmingly had more than 34,000 votes or 82 percent of voters choosing “yes” for a deeper probe into the COVID-19 deaths in New Jersey’s nursing home, as well as further release of information related to New Jersey’s handling of nursing homes during the pandemic.

RELATED: Sussex Co. Ballot Question Calls For COVID-19 Nursing Home Probe

The commissioners say that the news about Schwartz thrusts into the spotlight the “poor management of the nursing homes in the run-up to Governor Phil Murphy’s Executive Order 103 that forced many substandard, long-term care facilities to accept COVID patients.”

“The fact that state officials were responsible for the licensing and oversight of these facilities only heightens the need for transparency and full disclosure,” wrote Samantha Gabriele, a spokesperson on behalf of the commissioners.

“The County Commissioners have cooperated fully with the state investigation, including allowing interviewing of staff members, all emails and correspondences; and emails to the state Health Department in response to what was happening at the nursing home,” said Commissioner Herb Yardley.

He called the cooperation from the state “one-sided,” indicating that rather than having an investigation conducted by the Attorney General, who Murphy appointed, it should be performed by special counsel.

“It’s been more than a year and we still have not heard anything about this investigation or how the policies, decisions and oversight directed at our nursing homes resulted in tragedy,” Commissioner Anthony Fasano said. “Transparency and accountability are so desperately needed and so noticeably missing.”

Questions or comments about this story? Have a local news tip? Contact me at: jennifer.miller@patch.com.

Clipped from: https://patch.com/new-jersey/hopatcong-sparta/3-6m-medicaid-fraud-allegations-tied-ex-nj-nursing-home-owner