“Related Entities”

Ted Sherman wrote a great article for NJ.com explaining how nursing home owner/operators hide behind shell companies and divert funds to entices with common control or ownership. The industry regulations define them as “related entities.” The article uses the infamous Skyline Healthcare chain as one example but the problem persists throughout the long-term care industry.  The nursing home industry has long used complex and layered operating agreements to avoid accountability, dissipate assets, and spread liability among multiple related entities.

Joseph Schwartz owned and operated Skyline Healthcare. He would create companies using the names of people he knew as part of a widespread scheme of fraud to increase profits at the expense of vulnerable adults.

To hide his participation and to siphon taxpayer funds, he created “separate” companies to handle staffing, human resources, management training, insurance and other aspects of the business.

Unfortunately, it remains impossible to understand the finances and profits of the nation’s nursing home industry.