Madison: KBWB Operations LLC, doing business as Atrium Health and Senior Living (KBWB-Atrium), and Kevin Breslin, former chief executive officer and managing member of KBWB-Atrium, faced sentencing in U.S. District Court for the Western District of Wisconsin after previous guilty pleas to charges of health care fraud and tax conspiracy. These charges relate to their operation of multiple skilled nursing facilities, as announced by the Department of Justice.
According to United States Department of Justice, Kevin Breslin, aged 58 and from Hoboken, New Jersey, received a prison sentence of 90 months. He was also ordered to pay $146 million in restitution and $8.4 million in forfeiture. Similarly, KBWB-Atrium faced the same financial penalties. Breslin entered his guilty plea on December 17, 2024, while KBWB-Atrium did so on January 21. Court documents indicate Breslin as one of six owners of KBWB-Atrium, with its corporate headquarters in Little Falls, New Jersey, and a Midwest corporate office in Appleton, Wisconsin. The company operated nursing facilities in New Jersey, Wisconsin, and Michigan.
Assistant Attorney General Brett A. Shumate of the Justice Department's Civil Division highlighted the impact of health care fraud, stating that it increases prices for all Americans and can adversely affect patient outcomes. Shumate emphasized the department's commitment to collaborating with law enforcement partners to protect vulnerable Americans from exploitation.
Acting U.S. Attorney Chadwick M. Elgersma for the Western District of Wisconsin underscored the significance of safeguarding Medicare and Medicaid, not only to preserve the programs but also to protect the dignity, health, and financial security of millions of Americans. Elgersma commended the investigators and prosecutors who diligently worked to identify Breslin's fraud scheme and hold him accountable for his criminal actions.
Acting Special Agent in Charge Chris Ormerod of the FBI Milwaukee Field Office reiterated the FBI's investigative focus on individuals and companies misusing taxpayer money for personal gain, emphasizing the priority of ensuring the safety and well-being of Wisconsin residents.
Special Agent in Charge Mario M. Pinto of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), Chicago Region, noted the defendants' actions not only defrauded federal health care programs but also endangered the well-being of vulnerable nursing home residents. HHS-OIG remains committed to working with law enforcement to hold accountable those who exploit programs meant to provide essential care to at-risk populations.
Special Agent in Charge Adam Jobes of IRS Criminal Investigation, Chicago Field Office, stated that greed drove this scheme, which defrauded the health care system and violated employment tax obligations. By failing to pay withheld taxes, the defendants harmed their employees' Medicare and Social Security benefits while exploiting healthcare programs designed to protect the vulnerable.
Regional Director Mark Seidel of the Employee Benefits Security Administration in New York emphasized the importance of health care and health benefit plans in everyday lives. The agency remains committed to working with law enforcement to bring those who abuse their positions of trust while managing health benefit plans to justice.
The indictment against Breslin and KBWB-Atrium, returned on February 1, 2023, included 12 counts of health care fraud and tax conspiracy, among other charges. Court documents reveal that from January 1, 2015, to around September 2018, KBWB-Atrium operated 23 skilled nursing facilities in Wisconsin, with Breslin solely responsible for management and finances. The primary source of income for these facilities was federal Medicare and Medicaid funds from the Centers for Medicare and Medicaid Services (CMS).
The government alleged that the defendants unlawfully diverted CMS funds intended for resident care and facility operation for personal expenses. It further alleged that the defendants prioritized multi-million-dollar owner distributions regardless of KBWB-Atrium's financial situation and failed to disclose to CMS their non-compliance with federal regulations and laws. Consequently, vendors went unpaid, and residents received inadequate care.
Additional allegations included diverting health insurance premiums and 401(k) contributions from employee paychecks, along with money from resident accounts. The government further claimed that as part of the tax conspiracy, Breslin directed that employment taxes withheld from employee paychecks were not paid to the IRS, leading to inaccurate tax returns.
Trial attorneys from the Civil Division's Enforcement and Affirmative Litigation Branch prosecuted the case, with the investigation and initial prosecution led by the U.S. Attorney's Office for the Western District of Wisconsin. Assistance came from the Internal Revenue Service, Criminal Investigation, Chicago Field Office; the U.S. Department of Health and Human Services, Office of Inspector General - Office of Investigations, Milwaukee Field Office; the U.S. Department of Labor, Employee Benefits Security Administration, New York and Chicago Regional Offices; the Federal Bureau of Investigation, Milwaukee Field Office; and the State of Wisconsin Department of Justice, Division of Criminal Investigation, Medicaid Fraud Control and Elder Abuse Unit.