NEWARK, N.J. (AP) — The former operators of a failed multi-state nursing home chain stole more than $2 million from employees’ paychecks that was supposed to pay for their health insurance, according to a lawsuit.
The suit filed last week in U.S. District Court names Joseph Schwartz and wife Rosie Schwartz and their company, Skyline Health Care, which operated more than 100 nursing homes under numerous subsidiary companies. Dozens of those facilities have been taken over by states in the last two years after the company was unable to pay vendors.
Five plaintiffs who worked at Skyline-operated facilities in South Dakota, Kansas, Nebraska and Arkansas filed the suit, which seeks class-action status for what it estimates were more than 1,000 employees who were affected.
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 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.
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 redirected much of the money to themselves.
