A New Jersey-based company that operated 23 nursing homes throughout Wisconsin, and its former chief executive officer are facing federal charges of health care fraud, money laundering, wire fraud, and more following an alleged scheme that involved defrauding Medicare and Medicaid.
An indictment filed Feb. 2 in the U.S. District Court for the Western District of Wisconsin charges Kevin Breslin
of Hoboken, New Jersey and Park Ridge, New Jersey-based KBWB Operations, LLC
with 10 varying counts of fraud. KBWB did business as Atrium Health and Senior Living.
Atrium operated 24 skilled nursing and 9 assisted living facilities in Wisconsin and Michigan, including facilities in Appleton, Black River Falls, Bloomer, Chetek, Chilton, Ellsworth, Kewaunee, Lancaster, Little Chute, Marshfield, Mineral Point, Neenah, New Holstein, Oconto Falls, Plymouth, Shawano, Stevens Point, Two Rivers, Weston, Williams Bay, and Wisconsin Rapids.
Breslin was the managing member and chief executive officer of Atrium from June 2014 until August 2018 when he was fired. He received a yearly salary of approximately $1 million, as well as weekly guaranteed payments of between $30,000 and $40,000.
The indictment alleges that from January 2015 through September 2018, Atrium billed Medicare for over $189,000,000 and received over $49,000,000. The company also allegedly billed Medicaid for over $218,000,000 and received over $93,000,000.
The indictment alleges that when Atrium received money from Medicare and Medicaid, the company certified that it would follow all required quality of care standards, but it did not do so. Atrium failed to operate its facilities with adequate staffing, supplies and services.
As part of a scheme, Breslin and Atrium allegedly 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 also 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.
A lack of funds also led to vendors not being paid, 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 provide that money to a third-party administrator for use in paying health claims, causing payment of employees’ health claims to be stopped. The indictment further alleges that Breslin withheld 401(k) retirement savings account contributions from employees’ paychecks.
Breslin and Atrium also allegedly 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 faces 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.