Six people from Ohio were indicted in federal court for their roles in a health care fraud conspiracy in which Medicaid was billed $48 million for drug and alcohol recovery services which were not provided, not medically necessary, lacked proper documentation, or had other issues that made them ineligible for reimbursement.
Named in the 60-count indictment unsealed in U.S. District Court in Cleveland are: Ryan P. Sheridan, 38, of Leetonia; Jennifer M. Sheridan, 40, of Austintown; Kortney L. Gherardi, 29, of Girard; Lisa M. Pertee, 50, of Sunbury; Thomas Bailey, 44, of Poland, and Arthur H. Smith, 54, of Austintown.
All six are charged with conspiracy to commit health care fraud related to their work at Braking Point Recovery Center, which operated drug and alcohol rehabilitation facilities in Austintown and Whitehall, Ohio.
Additional counts include health care fraud, money laundering, operating a drug premises, conspiracy to distribute controlled substances, use of a registration number issued to another to obtain controlled substances, and other offenses.
According to the indictment:
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, various 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 Bailey dispensing of Suboxone even though Bailey 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.
The Sheridans, Gherardi, Bailey and Smith are also accused of conspiring to develop 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.
The Sheridans, Gherardi and Bailey used Smith’s DEA data waiver license to dispense more than 3,000 doses of Suboxone in 2017 alone without Smith having seen the patients. Smith held himself out to be Braking Point’s medical director but only went to Braking Point approximately twice a month.
Ryan Sheridan is also accused of making numerous financial transactions involving money derived from unlawful activities, including health care fraud and conspiracy to commit health care fraud.
Prosecutors are also seeking for 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 are accused of stealing tens of millions of dollars from taxpayers through fraudulent billing and other crimes,” U.S. Attorney Justin Herdman said. “Treatment for people struggling with drug and alcohol addiction is vitally important, but, as alleged in this case, these defendants profited off the suffering of others. We will hold accountable anyone who tries to illegally take advantage of the drug epidemic.”
“Individuals who are recovering from opioid and alcohol abuse that seek assistance need to have the utmost confidence and trust in those who are providing their care”, said Lamont Pugh III, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “That trust and confidence was violated by these defendant’s in order to pursue their own financial gain and waste vital taxpayer dollars. The OIG will continue to work with our federal, state and local partners to ensure that those who commit criminal acts to unjustly enrich themselves are held accountable.”
“While patients from the community were receiving treatment for their addictions, these individuals were allegedly engaged in fraudulent billing and other financial schemes to bilk taxpayers out of millions of dollars,” said FBI Special Agent in Charge Eric B. Smith. “The FBI will continue to work with our law enforcement partners and healthcare industry to identify those illegally cheating the system for the benefit of their own pockets.”
“The conduct detailed in this indictment is egregious and exposed these defendants for who they really are, thieves. They defrauded the health care system for their own personal gain," stated Ryan Korner, Special Agent in Charge, IRS-Criminal Investigation, Cincinnati Field Office. “IRS-CI is committed to collaboratively working to unravel complex fraud and money laundering schemes and ensuring those responsible are deprived of the fruits of these crimes.”
“While the vast majority of the healthcare professionals in this country are committed to saving lives, there are a few who are merely drug dealers hiding in plain view, and driven by greed,” said DEA Special Agent in Charge Timothy J. Plancon. “These arrests reiterate the Drug Enforcement Administration’s commitment to making our communities safer from illicit drugs, diverted pharmaceuticals, and fraud.”
“These scams are a sucker punch in the face to every family with loved ones struggling with addiction,” Ohio Attorney General Dave Yost said. “We will work with our partners to achieve justice — and get our money back.”
This case was investigated by the U.S. Department of Health and Human Services – Office of Inspector General, the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigations, the Drug Enforcement Administration and the Ohio Attorney General’s Medicare Fraud and Corruption Unit. It is being prosecuted by Assistant U.S. Attorneys Mark Bennett and Maritsa Flaherty and Special Assistant U.S. Attorney Jonathan Metzler.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal records, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
An indictment is only a charge, and the defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.