Nursing Home Owner Pleads Guilty in $38M Fraud Scheme

( – The wheels of justice typically turn very slowly during federal prosecution despite what Americans are seeing play out with Special Counsel Jack Smith’s race to try Donald Trump before the November election. A perfect case in point is the recent guilty plea of a former nursing home owner — two years after his January 2022 indictment.

On January 17, the US Attorney’s Office for the District of New Jersey issued a press release announcing that insurance producer Joseph Schwartz pleaded guilty to charges related to his participation in a $38 million tax fraud scheme. Prosecutors accused the 64-year-old defendant of failing to pay federal employment taxes for his workers at a string of roughly 100 nursing homes. They also charged him with failing to file mandatory reports detailing his former company’s 401K Benefit Plan with the US Department of Labor.

US Attorney Philip Sellinger noted that Schwartz was required to withhold taxes associated with the 401K program’s trust fund from workers’ paychecks and then turn that revenue over to the Internal Revenue Service. Instead, he “pocketed the money he withheld.” Sellinger concluded his remarks by stating that the defendant must now pay the price for his “criminal tax violations.”

IRS Special Agent in Charge Tammy Tomlins echoed that sentiment. She also pointed out that Schwartz’s guilty plea exemplifies the federal agency’s “commitment to investigate and prosecute” individuals who fail to honor their “federal tax obligations.”

James Dennehy, the Newark FBI field office’s special agent in charge, explained that Schwartz was “basically stealing money” from his workers and the IRS — money that’s “incredibly important” to keep the government functioning properly. He also warned other fraudsters to “pay attention” to Schwartz’s decision to learn a valuable lesson “the hard way” —- “don’t cheat the taxman.”

NBC News reported that the judge overseeing Schwartz’s case scheduled his sentencing hearing in May. If the court accepts the terms of his plea agreement with prosecutors, he will receive one year in prison, three years of supervised release, and must pay restitution totaling $5 million.

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