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.

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Six people from Ohio pleaded guilty in federal court to crimes related to a health care fraud conspiracy in which Medicaid was billed $48 million for drug and alcohol recovery services, many of which were not provided, not medically necessary, lacked proper documentation, or had other issues that made them ineligible for reimbursement.

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, are expected to be sentenced in January 2020. All six pleaded guilty to crimes related to their work at Braking Point Recovery Center, which operated drug and alcohol rehabilitation facilities in Austintown and Whitehall, Ohio.

According to the 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, 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, Pertee, Bailey and Smith 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.

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 made 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 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.”

“Patients trust that providers of medical services are putting their best interests at heart and are not using them as pawns for profit” said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General – Chicago Region. “That trust was cast aside by these defendants as exhibited by their guilty pleas. 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 at patient and taxpayer expense are held accountable”.

“These guilty pleas clearly indicate these individuals intended to fraudulently bill and deceive taxpayers out of millions of dollars,” said FBI Special Agent in Charge Eric B. Smith. “This should send a strong message to anyone who intends to cheat the system for their own benefit. The FBI and our law enforcement partners are focused on stopping those that commit healthcare fraud.”

“Ryan Sheridan and his co-defendants wreaked havoc on the integrity of our health care system for their own personal gain,” said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Health care fraud affects every American and today’s announcement illustrates that the IRS and our law enforcement partners are steadfast in our commitment to detecting and dismantling health care fraud schemes and holding perpetrators of these crimes accountable.”

“Health care fraud and the diversion of prescription medications are an increasing threat to our community,” said DEA Special Agent in Charge Keith Martin. “Dishonest and greedy healthcare providers who abuse the system for their own personal gain will not be tolerated and remain a priority for the DEA.”

“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.”

The U.S. Department of Health and Human Services – Office of Inspector General, Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigations, Drug Enforcement Administration and the Ohio Attorney General’s Medicare Fraud and Corruption Unit investigated this case. It is being prosecuted by Assistant U.S. Attorneys Mark Bennett, Jason Katz and Special Assistant U.S. Attorney Jonathan Metzler.

 

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.