Nursing home CEO indicted on federal fraud charges in Wisconsin

MADISON, Wis. (WBAY) - A senior living facility CEO has been indicted in Wisconsin on federal charges that he committed fraud against the government and employees and his alleged crimes led to a decline in the quality of care for patients at nursing homes.

A grand jury in the Western District of Wisconsin returned a 12-count indictment against Kevin Breslin, 56, managing member and CEO of KBWB Operations, LLC doing business as Atrium Health and Senior Living. The company had skilled nursing facilities (SNFs) in New Jersey, Wisconsin, and Michigan.

“The defendants certified that they would operate their Wisconsin SNFs with adequate staffing, supplies, environment, and ancillary services, which they did not do. The defendants certified that they would operate their Wisconsin SNFs in a manner that would enhance the resident’s quality of life by providing them services and activities to attain and maintain the highest practicable physical, mental, and psychosocial well-being of each resident in accordance with a written plan of care, which they did not do,” reads the indictment. “Instead of using their Medicare and Medicaid reimbursement funds to take care of the residents in their Wisconsin SNFs, and ensure that the Wisconsin residents attained or maintained the highest practicable physical, mental, and psychosocial well-being, as required by Title 42, the defendants diverted these funds for other purposes.”

The indictment alleges defendants diverted funds from the skilled nursing facilities to guaranteed payments to Atrium owners totaling $37 million; guaranteed monthly return-on-investment payments to investigators who had invested over $20 million to finance new SNFs in New Jersey; and construction costs on three new facilities in New Jersey.

The indictment says funds were diverted to personal expenses including payments to the IRS for unpaid taxes, loan repayments, and mortgage debts.

It is alleged that the scheme to defraud caused insufficient staffing of Certified Nursing Assistants and facilities failed to meet the quality of care standards that led to bed sores, ulcers, rashes, soiled linens, and “loss of dignity” for patients.

The indictment also says lack of food deliveries to unpaid vendors led to the need to buy replacement groceries and dietary needs were not monitored by a registered dietician as required.

The indictment alleges there were, “Periods of time when there was no phone and fax service. This prevented staff from obtaining prescriptions/ orders faxed in from doctors. Door alarms did not work during the disruption of phone services. Staff had to monitor exit doors to guard against vulnerable residents leaving the facility ... Periods of time when there was no Internet service. As a result, staff could not readily access the electronic medical records system to update resident records or readily access residents’ medication lists to disb·ibute medication ... Periods of time when there was no trash pickup resulting in unsanitary conditions.”

“Roofs and windows leaked. Water came into residents’ rooms and caused ceiling and wall damage, as well as mold in the buildings. Pails were put in residents’ rooms to collect the water. Mold was found in resident room walls and windows, as well as in air ducts.”

The defendants are accused of attempting to hide the quality of care from state investigators by “artificially increasing the staffing” during state surveys and proposing plans of correction they couldn’t pay for.

Defendants are also accused of defrauding Atrium employees. The complaint states he withheld health insurance premiums from Wisconsin employees but failed to pay them to the third-party administrator for paying health claims.

The administrator stopped paying claims in March 2018, leaving employees liable for those costs. The indictment states the employees thought they had health insurance coverage.

The indictment also alleges the defendants withheld 401K retirement savings from employee paychecks but never paid the funds over to the pension administrator.

The defendants are also accused of scheming to defraud vendors by getting services on credit and failing to pay.

Defendants are accused of scheming to evade paying Wisconsin employee state income tax withholdings to the Wisconsin Department of Revenue for the first three quarters of 2018.

Breslin was a 20 percent owner of Atrium. He started with Atrium in June 2014 and was fired in August 2018. He was in charge of accounting, finance, treasury, payables, payroll, budgeting, and staffing, according to the indictment.

Atrium Post Acute Care facilities were located across Wisconsin, including communities in the WBAY viewing area.

In 2018, the Wisconsin and Michigan facilities were placed into receivership.

Atrium generated revenue from skilled nursing facilities through private pay, private insurance, Medicare, and Medicaid.

From January 2015 through September 2018, Atirum’s Wisconsin SNFs billed Medicare over $189 million in services and received over $49 million. The SNFs billed Medicaid over $218 million in services and received over $93 million.

No court date has been set for Breslin, a resident of Hoboken, NJ.

“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,” reads a statement from the government.

Atrium operated the following locations in Wisconsin and Michigan:

• Atrium Post Acute Care of Appleton, Wisconsin;
• Atrium Post Acute Care of Black River Falls, Wisconsin;
• Atrium Post Acute Care of Bloomer, Wisconsin;
• Atrium Post Acute Care of Chetek, Wisconsin;
• Atrium Post Acute Care of Chilton, Wisconsin;
• Atrium Post Acute Care of Ellsworth, Wisconsin;
• Atrium Post Acute Care of Kewaunee, Wisconsin;
• Atrium Post Acute Care of Lancaster, Wisconsin;
• Atrium Post Acute Care of Little Chute, Wisconsin;
• Atrium Post Acute Care of Marshfield, Wisconsin;
• Atrium Post Acute Care of Menominee, Michigan;
• Atrium Post Acute Care of Mineral Point, Wisconsin;
• Atrium Post Acute Care of Neenah, Wisconsin;
• Atrium Post Acute Care of New Holstein, Wisconsin;
• Atrium Post Acute Care of Oconto Falls, Wisconsin;
• Atrium Post Acute Care of Plymouth, Wisconsin;
• Atrium Post Acute Care of Shawano, Wisconsin, at Birch Hill,
• Atrium Post Acute Care of Shawano, Wisconsin, at Evergreen,
• Atrium Post Acute Care of Shawano, Wisconsin, at Maple Lane,
• Atrium Post Acute Care of Stevens Point, Wisconsin;
• Atrium Post Acute Care of Two Rivers, Wisconsin;
• Atrium Post Acute Care of Weston, Wisconsin;
• Atrium Post Acute Care of Williams Bay, Wisconsin; and
• Atrium Post Acute Care of Wisconsin Rapids, Wisconsin.

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