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Press Release


For Immediate Release
U.S. Attorney's Office, Northern District of Ohio

Ryan P. Sheridan, 39, the owner and operator of Braking Point Recovery Center, which operated in the Youngstown and Columbus areas, was sentenced to 7 ½ years in prison for crimes related to a health care fraud conspiracy where Medicaid was billed $48 million for drug and alcohol recovery services, much of which were not provided, not medically necessary, lacked proper documentation, or had other issues that made them ineligible for reimbursement.

Sheridan was also ordered to pay $24,479,939 in restitution. He pleaded guilty last October to one count of conspiracy to commit health care fraud, seven counts of health care fraud, one count of conspiracy to distribute Suboxone, twenty-two counts of use of another’s registration number of another to obtain controlled substances, one count of operating a drug premises, and twenty-eight counts of money laundering.

On January 21, 2020, co-defendants Dr. Thomas Bailey and Dr. Arthur Smith were sentenced to 2 years of probation with 6 months of community service and a $5,000 fine.  Co-defendant Lisa Pertee was sentenced to 1 year of probation with 60 days of community service, and order to pay $2,200 in special assessments. 

According to court documents:

Ryan Sheridan was the sole owner of Braking Point Recovery Center, which operated drug and alcohol rehabilitation centers in Austintown and Whitehall, Ohio, that provided detox, intensive outpatient treatment, day treatment and residential living rehabilitation.

Sheridan also owned and operated numerous other businesses, including Breaking Point Health and Fitness LLC and Braking Point Recovery Housing LLC, which owned recovery houses (or “sober houses”) for individuals attempting to maintain abstinence from drugs and alcohol.

As part of being a certified provider, Sheridan agreed to follow the rules and regulations of the Ohio Medicaid Program and the Ohio Department of Mental Health and Addiction Services.

Between January 2015 and October 18, 2017, Sheridan and various other defendants submitted or caused to be submitted billings to Medicaid for drug and alcohol services that were: coded to reflect a service more costly than was actually provided; without proper documentation; without proper assessment documents containing valid diagnosis; billings for patients whose records did not contain diagnosis by a physician; related to treatment at unlicensed inpatient beds; billings related to dispensing of Suboxone, even though the treating physician did not have the authority to do so; for case management services when, in fact, the clients were working out at Sheridan’s gym; billings based on quotas provided to the nurses by the defendants to bill four to five hours of treatment daily, even if the services were not medically necessary; billing for in-patient detox and drug treatment services that were, in fact, provided in an out-patient setting, among other violations.

Braking Point submitted approximately 134,744 claims to Medicaid for more than $48.5 million in services it claimed to provide between May 2015 and October 2017.  The claims caused Medicaid to pay Braking Point more than $31 million.  Medicaid suspended payments to Braking Point on October 18, 2017.

Sheridan and other defendants developed a standard protocol of distributing the same amount of Suboxone to every patient seeking drug treatment immediately upon entering Braking Point’s detox program without being evaluated by a properly licensed physician to determine the medical necessity for the use of Suboxone.  Sheridan had the treating physician use another physician’s DEA data waiver license to dispense more than 3,000 doses of Suboxone in 2017 alone without the data waiver physician having seen the patients.

Sheridan also made numerous financial transactions in excess of $6 million, involving money derived from these unlawful activities, including health care fraud and conspiracy to commit health care fraud.  As such, Sheridan was ordered to forfeit property and proceeds obtained as a result of these crimes, including nearly $3 million, property in Columbiana, Mahoning and Trumbull counties, and eight automobiles, including replicas of vehicles used in the movies “Back to the Future,” “Ghostbusters,” and “Batman.”

“These defendants stole tens of millions of dollars from taxpayers through fraudulent billing and other crimes,” U.S. Attorney Justin Herdman said. “They used the drug epidemic plaguing Ohio as a way to line their pockets and profited off the suffering of others.”

“That beacon of hope for the addicted turned out to be a bonfire of our tax dollars. Heartless,” Ohio Attorney General Dave Yost said.

“Regardless of position, title, status, or degree, no one is above the law,” said DEA Special Agent in Charge Keith Martin.  “DEA will continue to work with U.S. Attorney Herdman’s office to bring those who blatantly violate drug dispensing laws to justice.”

“Ryan Sheridan and his co-conspirators deserve the sentences handed down in federal court for their fraudulent and deceptive criminal behavior,” stated FBI Special Agent in Charge Eric Smith.  “These individuals preyed on a healthcare system that is in place to help those in need and not to be used as an ATM to cipher millions of dollars from the taxpayers for their own pleasures.”

“These sentences send a clear message that those who choose to exploit Medicaid for illegal personal gain will pay the price for those criminal acts.  Taking advantage of a program set up to assist low-income people and the disabled will not be tolerated,” said Lamont Pugh III, Special Agent in Charge of the Chicago Region for the U.S. Department of Health and Human Services, Office of Inspector General. “The OIG will work tirelessly with our law enforcement partners to combat fraud in the health care system and protect vital tax payer dollars.” 

“Ryan Sheridan’s actions put our health care system at risk for his own personal gain which in unfathomable,” IRS Criminal Investigation SAC Bryant Jackson said. “Not only is Ryan Sheridan going to jail, but the government has seized a portion of the illegal proceeds through asset forfeiture which is one of the government's most powerful weapons in combating crimes of this magnitude.  IRS criminal investigation followed the flow of money in this case in order to uncover the fraud and we are proud to work with our law enforcement partners to investigate health care fraud schemes.”

This case was prosecuted by Assistant United States Attorneys Mark S. Bennett and Jason M. Katz, and Special Assistant United States Attorney Jonathan Metzler following an investigation by the Department of Health and Human Services -- Office of the Inspector General, the Federal Bureau of Investigation, the Drug Enforcement Administration, the Internal Revenue Service, and the Ohio Attorney General’s Medicare Fraud and Corruption Unit.



Bridget M. Brennan
(216) 622-3810

Updated January 22, 2020