A New York man admitted to a $38 million employment tax fraud scheme involving the nursing homes he owned across the country, officials say.

Joseph Schwartz, 64, of Suffern, pleaded guilty in Newark federal court to two counts, one being the failure to file an annual financial report for the employee 401K Benefit Plan he sponsored to the Department of Labor. The other count was the failure to pay over employment taxes withheld from the employees of his company, according to U.S. Attorney Philip R. Sellinger.

Schwartz was the owner of Skyline Management Group LLC., originally maintained headquarters in Wood-Ridge, which ran 95 nursing homes across 11 states and employed approximately 15,000 people. Three of these nursing homes were located in New Jersey before he sold them.

The New York man was able to rapidly expand his nursing home business by selling an insurance brokerage he owned for $22 million.

At the time he owned the company, from Oct. 31, 2017, through May 30, 2018, another company kept payroll records, and calculated the withholding for individual income taxes, Social Security, Medicare and unemployment taxes, but Schwartz admittedly failed to transfer the funds needed to pay those taxes.

The chain was responsible for over 7,000 residents. A great chaos was caused after its collapse in 2018. Some homes were closed, others were forced into receivership by state regulators and other vendors went unpaid.

FBI Newark Special Agent in Charge James E. Dennehy said, “Schwartz admits he willfully failed to pay over employment taxes, basically stealing money from his employees and the IRS.”

The employment tax fraud count is punishable by a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. The failure to file a Form 5500 related to the retirement plan count carries a maximum potential penalty of 10 years in prison and same fine amount as the other count.

This article originally appeared on NorthJersey.com: Owner of failed NJ nursing home chain pleads guilty to tax fraud