The Department of Justice revealed Thursday that a former top executive and the person in charge of Atrium Health and Senior Living were indicted on a long list of charges related to healthcare fraud, tax fraud, and money laundering on Wednesday.
CEO Kevin Breslin and KBWB Operations, doing business as Atrium, are accused of carrying out the alleged offenses between January 2015 and September 2018 at 24 skilled nursing facilities and nine assisted living facilities in Wisconsin.
Federal officials painted a picture of a sophisticated fraud operation in which they claim Breslin and Atrium siphoned money from the Wisconsin facilities to pay the owners of Atrium and investors who were using the earnings to build new nursing homes in New Jersey.
According to the indictment, KBWB Operations billed Medicare for more than $189 million during that time and was paid more than $49 million. Additionally, it claims that the business submitted Medicaid claims totaling more than $218 million and received payments totaling more than $93 million.
However, according to federal law enforcement officials who announced the indictment by a federal grand jury in the Western District of Wisconsin, a significant portion of that income never went toward patient treatment at Atrium locations.
The defendants certified that they would adhere to all necessary quality-of-care requirements when they applied for funding from Medicare and Medicaid, but they did not, according to a statement from the Justice Department.
“The diverted money resulted in insufficient treatment for residents, including a lack of clean diapers, wound care materials, cleaning supplies, durable medical equipment, and breathing supplies,” according to the report.
Staff and Vendor Duties Not Satisfied
Prosecutors claim that because money was diverted, suppliers were not paid, which resulted in the termination of services like physical treatment, fire alarm monitoring, and phone and internet access.
According to officials, the physical plant facilities also required maintenance and repairs that were not done.
A food service provider named U.S. Foods Inc. sued Breslin’s different organizations in 2018 for more than $2.2 million in allegedly unpaid invoices, claiming in a court filing that it had ceased delivering food to his premises as a result of nonpayment.
Although the beginning of the federal inquiry into a possible fraud scheme is unknown, the U.S. Foods filing occurred near the conclusion of the time when, according to federal officials, the conspiracy was in full swing.
It wasn’t clear Thursday night how many properties Atrium might still own and manage.
33 Atrium facilities, predominantly in Wisconsin, were reported to have entered receivership by McKnight’s Long-Term Care News at the end of 2018. When an FBI raid on such facilities took place in 2019, at least two of them were about to shift to new operators.
It was also unclear on Thursday if Breslin still held a management role at Atrium or another skilled nursing facility. Kevin Bresler is listed as the executive vice president of CareOne.
a New Jersey-based corporation with skilled nursing and assisted living facilities in New Jersey, Massachusetts, Connecticut, and Pennsylvania, on a mainly inactive LinkedIn page. In numerous databases, he was also identified as the owner of other skilled nursing homes.
Other Fraud Allegations
According to the indictment, Breslin and Atrium withheld insurance premiums and 401(k) contributions from employees’ paychecks but failed to turn those funds over to the third-party administrators, preventing claims from being paid out and retirement investments from being funded.
Additionally, it is alleged in the indictment that Breslin and Atrium failed to pay state and federal income taxes withheld from employees’ paychecks as well as employment taxes to the Wisconsin Department of Revenue and the Internal Revenue Service.
The conspiracy to commit tax fraud accusation against Breslin has a maximum sentence of five years in federal prison, as well as 20 years for each of the following charges: healthcare fraud, wire fraud, mail fraud, and conspiracy to commit money laundering.
A $250,000 fine is imposed on each of the accusations of healthcare, wire, and mail fraud as well as conspiracy to conduct tax fraud; a $500,000 fine is imposed on the charge of money laundering.
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