6 face charges in $31M Medicaid fraud case


By Justin Dennis

jdennis@vindy.com

CLEVELAND

A 60-count federal indictment alleges a recovery home owner handed out opioids indiscriminately while raking in $31 million in fraudulent Medicaid claims.

Ryan P. Sheridan, 38, of Leetonia, the former owner of Braking Point Recovery Center, and five Braking Point workers face charges including conspiracy to commit health care fraud, health care fraud, money laundering, operating a drug premises, conspiracy to distribute controlled substances and improper use of drug distributor registrations, according to a release from Justin Herdman, U.S. Attorney for the Northern District of Ohio.

Braking Point operated state-licensed drug and alcohol rehabilitation centers in Austintown and Whitehall, a Columbus suburb.

Also named in the indictment are Jennifer M. Sheridan, 40, of Austintown, Sheridan’s ex-wife and Braking Point’s medical records and billing coordinator; Kortney L. Gherardi, 29, of Girard, and Lisa M. Pertee, 50, of Sunbury, near Columbus, both of whom oversaw day-to-day operations at the facilities; and Thomas Bailey, 44, of Poland, and Arthur H. Smith, 54, of Austintown, both of whom were the center’s state-licensed physicians.

According to the 38-page indictment, Braking Point submitted about 134,744 fraudulent Medicaid claims totaling more than $48.5 million between May 2015 and September 2017, of which Medicaid paid about $31.1 million.

The indictment alleges the bills were inflated, didn’t correspond to proper Medicaid codes or were for patients who didn’t have a physician’s diagnosis or drug purchases made without proper Drug Enforcement Agency authorization, among other violations.

The Ohio Department of Medicaid suspended payments to Braking Point in October 2017, around the same time federal agents raided several of Sheridan’s area properties.

In 2017, Bailey is alleged to have used Smith’s DEA registration to dispense more than 3,000 doses of Suboxone, an opioid medication used to treat withdrawal symptoms. Sheridan continued to use the registration belonging to another, unnamed center doctor for five months after that doctor resigned in April 2017, purchasing more than 8,000 dosage units of various opioid medications from Austintown pharmacies.

The defendants didn’t establish individualized treatment plans for each patient, as required by law – and Smith was rarely at the facility to determine whether they actually needed Suboxone – “instead every patient entering detox was given the standard protocol of Suboxone and same medical treatment,” the indictment states.

According to the indictment, Sheridan paid for patients’ rent at area sober homes, provided they continued to return to Braking Point for treatment “and, if the patients did not, Braking Point would no longer pay the patients’ rent at that sober home.”

“Treatment for people struggling with drug and alcohol addiction is vitally important, but these defendants profited off the suffering of others,” Herdman said in the release.

The indictment alleges Sheridan laundered more than $6.2 million in Braking Point proceeds, which he used in investments, property deals including his $792,000 Leetonia home and various vanity items such as a $158,000 “Batmobile” vehicle, a $140,000 Cadillac hearse popularized by the “Ghostbusters” franchise and a $58,000 replica of the DeLorean from “Back to the Future.”

The indictment seeks forfeiture of about $2.6 million in account funds and cash seized during the 2017 raids.

“While the vast majority of the health care 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,” DEA Special Agent in Charge Timothy J. Plancon said in the release.

Authorities did not specify the length of the investigation into Sheridan and Braking Point, but Mike Tobin, spokesman for federal prosecutors, said it predates the facility’s October 2017 closure.

FBI Special Agent Vicki Anderson declined to comment on the investigation, as to not harm Sheridan’s prosecution, and the search warrants executed at Sheridan’s properties in 2017, which are still sealed.

Sheridan also faces 14 felony counts and a single misdemeanor count of drug possession in Columbiana County court. Investigators found large quantities of anabolic steroids and stimulants such as cocaine and amphetamines during the October raid of Sheridan’s Leetonia home.

That case is set for a jury trial May 6.

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