Arkansas AG says pardoned nursing home operator should serve state sentence

Arkansas’ attorney general is seeking to have a former nursing home operator who was pardoned by President Donald Trump to serve time in state prison for Medicaid fraud and tax evasion.

Tim Griffin asked a Pulaski County judge in a court motion Tuesday to order Joseph Schwartz to report to prison to serve 31 days before he is eligible for parole under his state conviction. Griffin asked the judge to give Schwartz seven days to report.

Schwartz pleaded guilty in federal court last year for his role in a $38 million employment tax fraud scheme involving nursing homes he owned across the country. Trump pardoned him last month.

As part of a plea agreement with the state, Schwartz was sentenced to one year to run concurrently with his federal prison time. Griffin, a Republican, said in court filings that Schwartz still has a debt to the state.

“In addition to his prison time, he still owes more than $1 million to the state in restitution and fees,” Jeff LeMaster, a spokesperson for Griffin’s office, said in a statement. “We will ensure he fulfills all of his obligations to the state.”

Griffin also said Schwartz should be considered a flight risk.

Kevin Marino, an attorney for Schwartz, said the state should not succeed in its request.

“We do not believe that motion is well-made, and we’re confident Mr. Schwartz will prevail,” Marino said.

Under Arkansas law, Schwartz is required to serve a third of his sentence before he becomes eligible for parole. He previously served 90 days in state custody.

Federal prosecutors said Schwartz, who operated New Jersey-based Skyline Management Group, willfully failed to pay employment taxes relating to numerous health care and rehabilitation facilities that Skyline ran in 11 states.

Between October 2017 and May 2018, Schwartz caused taxes to be withheld from employees’ pay but then failed to pay over more than $38 million in employment taxes to the IRS, according to the Justice Department.