A New Jersey man who operated Atrium skilled care centers in Shawano and Oconto Falls while defrauding employees, residents, Medicare and Medicaid out of $146 million, was sentenced Monday to 7 1/2 years in prison and ordered to make restitution.
Kevin Breslin, 50, of Hoboken, New Jersey, was the chief executive officer and a co-owner of KBWB Operations LLC, doing business as Atrium Health and Senior Living, and oversaw all operations to the point of micromanaging them, said a witness at his sentencing in federal court.
Atrium, a New Jersey-based health care company, had purchased nursing homes owned by Larry Rice in 2015 but put them into receivership by 2018 after paying the five co-owners a combined $1 million a month, according to testimony at a three-hour sentencing Nov. 17.
Former employees testified that facilities were well maintained, bills were paid on time and residents received proper care when Rice was the owner. However, in less than two years, building maintenance was neglected, employee paychecks bounced, vendors went unpaid, and patient cash accounts were drained instead of being returned to them or their surviving families.
This occurred despite KBWB receiving $49 million from billing Medicare and more than $93 million from billing Medicaid.
When businesses quit delivering food and other supplies to the acute care centers, employees said they used their own funds to buy diapers, snacks and some medical supplies but were never reimbursed.
Mike Braun, the firm’s cash management analysis, said the company’s checking accounts were continuously overdrawn and he moved funds between them to stay ahead of creditors. Meanwhile, Breslin and “his cronies” were being paid $1 million a month, Braun said.
“I asked Kevin Breslin not to take the weekly disbursements in order to help the employees, but he said to consider the payments to be their paychecks,” Braun said to U.S. District Judge William Conley.
Raeline Springstroh, who managed Atrium’s nursing center in Plymouth, said she can “put hell on my resume” after working for the company.
“Residents had their Social Security stolen from their accounts … there were no new mattresses purchased. Threadbare carpets were dirty and smelled but weren’t replaced, and potholes were so bad in the parking lots that an employee’s car’s struts were damaged,” she said.
Springstroh said she suffered a “stress-inducted heart attack,” during the months she worked for Atrium.
She told Conley that Breslin deserves the same treatment that Atrium residents received including “cold food and dirty conditions,” to deter other nursing homeowners from engaging in the same conduct.
Other employees also said that not being paid, having their health insurance and the “horrible” working conditions took a toll on them, too.
Residents also suffered and not getting the medications and therapy they needed no doubt shortened their lives, said Dr. James Williams, medical director for Atrium facilities, including Shawano and Kewaunee.
Williams said, “This experience was like no other,” in his 50 years of practicing medicine.
The owners must have been motivated by “greed” instead giving the care centers the resources they needed, according to Williams. When he learned that residential care was falling short of state requirements, he blew the whistle in 2018 and inspectors from the state Department of Health Services arrived the following day, he said.
Breslin authorized diverting withholding funds from employee paychecks but failed to pay the withheld taxes to the IRS. He also had W-2 forms issued to employees falsely claiming that the withheld funds had been paid to the IRS, according to the indictment.
That caused employees to unknowingly file tax returns listing the supposed withheld funds to the IRS.
More than 150 employees filed victim impact statements with the court and sought restitution.
KBWB owned Atrium’s three facilities in Shawano, one in Oconto Falls and 20 skilled nursing and nine assisted living centers in Wisconsin and one facility in Michigan. It was licensed for 1,900 and had 1,700 employees.
Breslin, who owned 20% of KBWB, was fired in August 2018.
He was indicted in 2023 on multiple counts of wire fraud, mail fraud, tax fraud and health care fraud.
Last December, he pleaded guilty to health care and tax fraud and faced maximum statutory penalties of 15 years in prison and three years supervised release.
On Nov. 17, Breslin apologized for the harm he caused residents, staff, vendors and lenders.
Assistant U.S. Attorney Karla Clark asked for a 10-year sentence. Conley asked her why the government didn’t prosecute Breslin’s co-owners or seek to recover money from them. Clark said Breslin micromanaged everything, and the co-owners didn’t bother to ask if the centers were functioning properly.
Conley asked Breslin why he didn’t halt the $1 million monthly payments to the co-owners as he must have known that Atrium couldn’t sustain the losses it was incurring. Breslin said he had hoped to continue to pay the co-owners and they wouldn’t interfere with his attempts to fix Atrium’s finances.
Conley said Breslin was draining money from Atrium’s facilities in Wisconsin to prop up its New Jersey locations.
In imposing the prison sentence, Conley factored Breslin’s age, lack of prior convictions and the unlikelihood that he would re-offend. The sentence was also based on the duration that the offenses occurred, the number of victims and their vulnerability.
The $146 million restitution, if ever collected, is to be distributed to the residents or their families, employees, vendors and Medicare and Medicaid.
The judge gave Breslin until Feb. 3 to report to prison.
