![]() Judge Wigenton also ordered Schwartz to forfeit $75 million. In addition to the prison term, Judge Wigenton sentenced Schwartz to three years of supervised release and ordered him to pay $80 million in restitution. At one point during an August 2010 conversation between Schwartz and the “supplier,” Schwartz commented that the financial institutions had fallen “hook, line and sinker” for the false explanation given to bank examiners who asked why the purported supplier used his home address on certain invoices. At times, when financial institutions sought to review documentation regarding Allied’s leasing of the ventilators to its customers, Schwartz falsely told the financial institutions that the information was protected by Health Insurance Portability and Accountability Act regulations. Schwartz admitted that in advance of expected inspections by financial institutions, he directed others to alter serial numbers or create fraudulent serial numbers on existing ventilators to match fraudulent invoices he had supplied to the various financial institutions. To deceive bank examiners who wanted to inspect the non-existent medical equipment, which had been purchased by the financial institutions. Schwartz and the medical equipment “supplier” undertook efforts throughout the scheme Schwartz admitted that more than 50 victim financial institutions lost a total of between $50 and $100 million as a result of the scheme. Losses from the scheme now total at least $80 million. Allied and Schwartz were forced into involuntary bankruptcy in August 2010 and September 2010, respectively. By August 2010, several financial institutions from which Schwartz had obtained loans filed lawsuits against Schwartz and Allied, claiming he owed them at least $20 million. In addition to spending millions of dollars on properties in New Jersey and New York, including a horse farm, Schwartz used the money in Ponzi-scheme fashion to repay earlier bank loans that were a part of the scheme. The “supplier” then sent the money received from theįinancial institutions (minus his 3 to 5 percent payment) to an entity created by Schwartz to Which they immediately leased to Schwartz and Allied – and sent payment for the medicalĮquipment to the purported supplier. Pursuant to these arrangements, the financial institutions purchased the medical equipment – The “supplier,” Schwartz convinced the financial institutions to enter into leasing arrangements. Them that Allied needed to lease particular medical equipment. Instead, the “supplier” created phony invoices which appeared to reflect legitimate transactions.Īs part of the scheme, Schwartz approached various financial institutions and informed In reality, the purported medical equipment supplier did not provide Schwartz and Allied with any equipment during that time. (“Allied”), convinced financial institutions to pay more than $135 million by telling them that the money would be used to lease valuable medical equipment. ![]() ![]() The health care industry is a vital part of New Jersey’s fabric, and those who criminally exploit our success will not be tolerated.”Īccording to documents filed in this case and statements made in court:įrom at least 2002 through July 2010, Schwartz, through Allied Health Care Services, Inc. “It is particularly offensive that he claimed to be leasing medical equipment that is used by people with significant healthcare needs, and his deception justifies his 16-year sentence. “Charles Schwartz, who once bragged that victims fell for his fraud ‘hook, line and sinker,’ stole tens of millions of dollars from financial institutions and bankrupted his own company to float his Ponzi scheme and luxury lifestyle,” said U.S. Wigenton, who also imposed the sentence today in Newark federal court. Schwartz entered his guilty plea before U.S. He has been in federal custody since that time. Schwartz was previously charged by Complaint and arrested by special agents of the FBI on September 2, 2010. Schwartz, 58, of Sparta, N.J., pleaded guilty on April 13, 2011, to one count of mail fraud. – The former owner and president of Allied Health Care Services, Inc., an Orange, N.J., durable medical equipment corporation, was sentenced today to 195 months in prison for organizing and executing a $135 million phony lease scheme that caused losses of more than $80 million and victimized more than 50 financial institutions, U.S. ![]() Charles Schwartz Also Ordered to Pay $155 Million in Restitution and Forfeiture
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