Failed nursing home chain stole from employees, class-action suit says

Five former Skyline Healthcare employees have filed a class-action lawsuit against the failed nursing home operators, claiming the company fraudulently took funds from employees' paychecks, according to Keloland News.

The quickly growing Skyline Healthcare, owned by Joseph Schwartz, had more than 100 facilities across the country at its peak, but quickly fell apart when it struggled to come up with funding in 2018 and 2019, according to NBC News.

The new lawsuit alleges that certain Skyline nursing homes in Arkansas, Kansas, Nebraska, and South Dakota promised employees health, dental and Aflac insurance plans, with premiums directly deducted from paychecks. However, while money was taken out of employee paychecks, no insurance was ever purchased, according to the complaint.   

Former employees allege that Skyline submitted false tax forms to the IRS to prove its compliance with the Affordable Care Act. The lawsuit also claims Skyline set up a fake company, Cornerstone Quality Care, to enroll employees in various insurance plans, deduct the premiums and then pocket the money. The lawsuit accuses Skyline of violating the Racketeer Influenced and Corrupt Organizations Act.

Some states have passed new laws that mandate better screening of potential nursing home buyers.  

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