NEWARK, N.J. – Joseph Schwartz, 64, of Suffern, New York, pleaded guilty to two counts of employment tax fraud, totaling over $38 million, U.S. Attorney Philip R. Sellinger announced today. The hearing took place in Newark federal court before U.S. District Judge Susan D. Wigenton.
Schwartz, owner of Skyline Management Group LLC, admitted to not paying over employment taxes and failing to file an annual financial report for his company’s employee 401K Benefit Plan. U.S. Attorney Sellinger stated Schwartz’s actions defrauded the United States by withholding payroll taxes but failing to submit them to the IRS.
Tammy Tomlins, IRS – Criminal Investigation Special Agent, emphasized the seriousness of Schwartz’s crimes, highlighting the impact on taxpayers. James E. Dennehy, FBI – Newark Special Agent in Charge, pointed out the significance of these taxes for government revenue and warned others against similar fraud.
Court documents reveal that between October 31, 2017, and May 30, 2018, Schwartz neglected his duty to pay over $38.9 million in trust fund taxes for Skyline Management Group employees. He also failed to file the required Form 5500 financial report for the 2018 calendar year.
The maximum penalty for the employment tax fraud count is five years in prison and a $250,000 fine, or twice the gross gain or loss. The failure to file the Form 5500 carries a potential 10-year prison sentence and similar fines. Schwartz’s sentencing is set for May 22, 2024.