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Six people working at rehabilitation facilities in Ohio have pleaded guilty to a Medicaid fraud.

By Chris Mosby, Patch Staff

CLEVELAND — This month, six Ohio residents pleaded guilty to perpetrating a Medicaid fraud for $48 million. The group billed Medicaid for drug and alcohol recovery services, but did not actually provide any rehabilitation, the Department of Justice said.

“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.”

The six people who pleaded guilty are: Ryan P. Sheridan, 39, of Leetonia; Jennifer M. Sheridan, 41, of Austintown; Kortney L. Gherardi, 30, of Girard; Lisa M. Pertee, 51, of Sunbury; Thomas Bailey, 45, of Poland, and Arthur H. Smith, 55, of Austintown. All six were working at Braking Point Recovery Center, with facilities in Austintown and Whitehall.

Sheridan is the sole owner of Braking Point Recovery Center. The facilities provide detox, intensive outpatient treatment, day treatment and residential living rehabilitation, according to court documents.

Beside the recovery centers, Sheridan also owned other businesses like Breaking Point Health and Fitness LLC and Braking Point Recovery Housing LLC, which ran “sober” houses for people trying to abstain from drugs and alcohol.

Between January 2015 and October 2017, members of Braking Point Recovery Center submitted billings to Medicaid for drug and alcohol services that were costlier than the services actually provided. According to court documents, the billings frequently lacked proper documentation or assessment documents. Other billings lacked a diagnosis from a doctor or related to unlicensed inpatient beds or the improper distribution of Suboxone (a drug used to treat opioid addiction) by staffers who could not prescribe the drug.

Over the two-year span, Braking Point submitted nearly 135,000 claims to Medicaid, billing more than $48.5 million. Medicaid paid Braking Point more than $31 million but suspended payments on October 18, 2017, court documents said.

All six defendants worked together on a protocol for distributing the same amount of Suboxone to every patient seeking drug treatment. The prescriptions were filled out as soon as the patient entered treatment, without being properly evaluated by a licensed doctor, court documents said.

The court documents said Braking Point dispensed more than 3,000 doses of Suboxone in 2017 alone, court documents said. Those prescriptions were made without patients being seen by Smith, Braking Point’s “medical director,” who only went to the facilities approximately twice a year, according to court documents.

Sheridan would use the money he got from the fraud to buy property in Columbiana, Mahoning and Trumbull counties and eight automobiles including replicas of cars used in “Batman,” “Ghostbusters,” and “Back to the Future,” according to court documents. Prosecutors want all of the property and cars forfeited.

Charges were filed against the Braking Point staff after an investigation by the U.S. Department of Health and Human Services – Office of Inspector General, FBI, IRS – Criminal Investigations, DEA and the Ohio Attorney General’s Medicare Fraud and Corruption Unit.

“The victim here isn’t just the health care system, it’s the people struggling with addiction who needed a beacon of hope but instead found themselves at the center of a shady scheme,” Ohio Attorney General Dave Yost said. “I’m grateful for U.S. Attorney Herdman’s work to secure justice for these victims and their loved ones.”

All six defendants are expected to be sentenced in 2020.