evidence sheet with money in it
(Credit: Peter Dazeley / Getty Images)

An assisted living community and nursing home operator was indicted by a Wisconsin grand jury Wednesday on multiple fraud charges in a scheme connected to diverting millions in Medicare and Medicaid funds from facilities in Wisconsin and Michigan.

Kevin Breslin of Hoboken, NJ, and KBWB Operations LLC, doing business as Atrium Health and Senior Living in Park Ridge, NJ, were charged with healthcare 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 US Department of Justice on Thursday, Breslin was CEO of Atrium, which operated nine assisted living communities and two dozen skilled nursing facilities in Wisconsin and Michigan, at the time of the alleged crimes.

The indictment maintains that between January 2015 and September 2018, Atrium diverted Medicare and Medicaid funding from the Wisconsin facilities through payments to Atrium owners, guaranteeing monthly return-on-investment payments to investors who were financing the construction of and construction costs related to skilled nursing facilities in New Jersey. That diversion of funds reportedly led to inadequate care of residents, including a shortage of clean adult briefs, inadequate wound care and cleaning supplies, and a lack of durable medical equipment and respiratory supplies. 

When vendors weren’t paid, numerous services were cut off, including physical therapy for residents, fire alarm monitoring services, and necessary repairs and maintenance to the facilities, the Justice Department said. A lack of phone and internet services also prevented staff members from obtaining prescription orders and accessing electronic medical records systems.

Atrium reportedly billed Medicare more than $189 million and received more than $49 million. The company also reportedly billed Medicaid more than $218 million and received more than $93 million. 

Breslin and Atrium also allegedly withheld insurance premiums from employees’ paychecks but did not pay a third-party administrator to pay health claims. Contributions to employee retirement savings accounts also allegedly were not paid. In addition, Breslin and Atrium evaded paying state and federal income taxes, as well as employment taxes, which were withheld from employees’ paychecks, the Justice Department said.

Breslin faces five years in federal prison on the conspiracy to commit tax fraud charge and 20 years each on the healthcare fraud, wire fraud, mail fraud and money laundering charges. Breslin and Atrium also face a $250,000 fine on each of the tax, healthcare, wire and mail fraud charges, whereas the money laundering charge carries a $500,000 fine. 

As McKnight’s Senior Living previously reported, 33 Atrium facilities — nine senior living communities and 23 skilled nursing facilities in Wisconsin, as well as one SNF in Michigan — went into receivership in 2018 and were transferred to new operators. The company sought a receiver to “stabilize the company.”

At the time, Atrium also listed three other senior living communities and nine SNFs in New Jersey on its website, and they were not included in the receivership. The company website no longer is operational. It was unclear Thursday how many facilities, if any, Atrium still might own or operate.

Breslin was brought on in 2014 as managing member of Atrium to “further the company’s commitment to steady growth and to leading the senior care industry,” according to Atrium’s LinkedIn page. That same year, the New Jersey-based company expanded into Michigan and Wisconsin through the acquisition of six senior living communities and 17 skilled nursing facilities from Rise Health Care Facilities and its affiliates.

A list of facilities that Atrium owned is included in the Department of Justice press release.