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, were sentenced yesterday, in U.S. District Court for the Western District of Wisconsin following prior guilty pleas to health care fraud and tax conspiracy related to the operation of numerous skilled nursing facilities, the Department of Justice announced.
Kevin Breslin, 58, of Hoboken, New Jersey, was sentenced to 90 months in prison and ordered to pay $146 million in restitution and $8.4 million in forfeiture. KBWB-Atrium also was ordered to pay the same restitution and forfeiture amounts. Breslin pleaded guilty on Dec. 17, 2024. KBWB-Atrium pleaded guilty on Jan. 21. According to court documents, Breslin is one of six owners of KBWB-Atrium. KBWB-Atrium’s corporate headquarters was located in Little Falls, New Jersey, and its Midwest corporate office was located in Appleton, Wisconsin. KBWB-Atrium operated and/or owned nursing facilities in New Jersey, Wisconsin, and Michigan.
“Health care fraud drives prices up for all Americans and can cause serious negative outcomes for patients,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “We remain dedicated to working with our law enforcement partners to protect the most vulnerable Americans from those who would take advantage of them.”‘
“Protecting Medicare and Medicaid is not just about preserving the programs. It is about safeguarding the dignity, health, and financial security of the millions of Americans who rely on them,” said Acting U.S. Attorney Chadwick M. Elgersma for the Western District of Wisconsin. “I commend the investigators and prosecutors who identified Mr. Breslin’s fraud scheme and worked tirelessly to hold him accountable for his serious criminal conduct.”
“Today’s sentencing underscores an investigative priority of the FBI,” said Acting Special Agent in Charge Chris Ormerod of the FBI Milwaukee Field Office. “The FBI, in collaboration with its partners have not lost sight of investigating people and companies that misuse taxpayers’ money for personal gains and at the expense of people needing quality healthcare. The safety and well-being of Wisconsin residents remains our highest priority.”
“The defendant’s actions not only defrauded federal health care programs but also jeopardized the well-being of vulnerable nursing home residents,” said 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. “HHS-OIG will continue to work closely with our law enforcement partners to hold accountable those who exploit programs meant to provide essential care and services to our nation’s most at-risk populations.”
“Greed was the driving force behind this scheme, which not only defrauded our health care system but also violated employment tax obligations,” said Special Agent in Charge Adam Jobes of IRS Criminal Investigation, Chicago Field Office. “By failing to pay over withheld taxes, the defendants harmed their employees’ Medicare and Social Security benefits – while also exploiting healthcare programs meant to protect the most vulnerable.”
“Health care and the health benefit plans that provide coverage are of the utmost importance in everyday lives,” said Regional Director Mark Seidel of the Employee Benefits Security Administration in New York. “The Employee Benefits Security Administration remains committed to working with our law enforcement partners to bring to justice those who break the law and abuse their positions of trust while managing health benefit plans.”
On Feb. 1, 2023, a grand jury returned a 12-count indictment against Breslin and KBWB-Atrium charging health care fraud and tax conspiracy, among other charges. According to court documents, from approximately Jan. 1, 2015 to in or about September 2018, KBWB-Atrium operated 23 skilled nursing facilities in Wisconsin. Breslin was solely responsible for KBWB-Atrium’s management, operation, business, and finances. The primary source of income for the KBWB-Atrium Wisconsin 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 the operation, management, maintenance, and care of the residents at the KBWB-Atrium Wisconsin facilities for personal expenses and other purposes. The government further alleged that the defendants prioritized multi-million-dollar owner distributions and guaranteed payments regardless of KBWB-Atrium’s financial situation. The government alleged that the defendants knowingly and willfully failed to disclose to CMS that they were not using CMS funds for resident care, were not in compliance with applicable federal regulations and laws, and had not paid vendors or certain federal and state taxes. As a result, the government alleged, vendors went unpaid and residents did not receive adequate care.
The government alleged that the defendants also diverted health insurance premiums and 401(k) contributions from employee paychecks, as well as money from resident accounts. The government further alleged that as part of the tax conspiracy, Breslin, acting on behalf of KBWB-Atrium, directed that employment taxes withheld from KBWB-Atrium employees’ paychecks not be paid to the IRS, which caused employees to prepare inaccurate tax returns listing those withholdings.
Trial attorneys with the Civil Division’s Enforcement and Affirmative Litigation Branch prosecuted the case.
The U.S. Attorney’s Office for the Western District of Wisconsin investigated and initially prosecuted the case with assistance 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.