A federal grand jury in the Western District of Wisconsin has charged a New Jersey man and company that operated 24 Atrium Post Acute Care facilities in the state with fraud.
Kevin Breslin, 56, of Hoboken, New Jersey, and KBWB Operations LLC, which operates Atrium Health and Senior Living in Park Ridge, New Jersey, are facing charges of health care fraud, six counts of wire fraud, three counts of mail fraud, conspiracy to commit tax fraud and conspiracy to commit money laundering.
According to the indictment, Breslin was the chief executive officer of Atrium, which operated 24 skilled nursing homes and nine assisted living facilities in Wisconsin and Michigan. These facilities included:
The locations where the Atrium facilities were located include Appleton, Black River Falls, Bloomer, Chetek, Chilton, Ellsworth. Kewanee, Lancaster, Little Chute, Marshfield, Menominee, Mineral Point, Neenah, New Holstein, Oconto Falls, Plymouth, Shawano, Stevens Point, Two Rivers, Weston, Williams Bay and Wisconsin Rapids.
Breslin allegedly schemed to defraud Medicare and Medicaid in connection with the delivery of or payment for health care benefits, items, or services.
The indictment alleges that the scheme operated from January 2015 to September 2018. Atrium Health & Senior Living had been in financial trouble, according to reports.
Atrium reportedly owed $13.5 million to its lenders in Wisconsin, and when it couldn’t pay, all of its facilities in that state and one in Michigan went into receivership in 2018.
The indictment charges the defendants with health care fraud, six counts of wire fraud, three counts of mail fraud, conspiracy to commit tax fraud, and conspiracy to commit money laundering.
The indictment alleges that from January 2015 through September 2018, Atrium billed Medicare for over $189,000,000 and received over $49,000,000 and that they billed Medicaid for over $218,000,000 and received over $93,000,000. The indictment alleges that when the defendants obtained money from Medicare and Medicaid, they certified that they would follow all required quality of care standards, but they did not do so, and that they would operate their facilities with adequate staffing, supplies, and services, but they did not do so.
The indictment alleges that as part of the scheme to defraud, Breslin and Atrium diverted funds from the Wisconsin facilities through guaranteed payments to Atrium owners, guaranteed monthly return-on-investment payments to investors that were financing the construction of skilled nursing facilities in New Jersey, and construction costs for the New Jersey facilities.
The indictment further alleges that the diversion of funds caused inadequate care of residents, including a shortage of clean diapers, inadequate wound care supplies, inadequate cleaning supplies, and a lack of durable medical equipment and respiratory supplies.
In addition, the diversion of funds caused non-payment to vendors, which caused numerous services to be cut off, including physical therapy for residents, fire alarm monitoring services, phone and internet services preventing staff from obtaining prescription orders and accessing electronic medical records systems, and necessary repairs and maintenance of the physical plant facilities.
In addition, the indictment alleges that Breslin and Atrium withheld insurance premiums from employees’ paychecks but failed to pay those monies over to the third-party administrator for use in paying health claims, causing payment of employees’ health claims to be stopped. The indictment further alleges that the defendants withheld 401(k) retirement savings account contributions from employees’ paychecks but failed to pay those monies over to the third-party pension administrator.
The indictment also alleges that Breslin and Atrium evaded payment to the Wisconsin Department of Revenue and the Internal Revenue Service of state and federal income taxes and employment taxes withheld from employees’ paychecks.
If convicted, Breslin and Atrium face penalties of five years in federal prison on the conspiracy to commit tax fraud charge, and 20 years on each health care fraud, wire fraud, mail fraud, and conspiracy to commit money laundering charge.
The conspiracy to commit tax fraud charge and each of the health care, wire and mail fraud charges carry a $250,000 fine; the money laundering charge carries a $500,000 fine. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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