YOUNGSTOWN — The case against the six people connected to the now-closed Braking Point Recovery Center indicted in a $48 million Medicaid fraud took a big step toward completion with guilty pleas from three defendants Tuesday at the Thomas A. Lambros Federal Courthouse.

Two Mahoning doctors and the former Austintown rehab facility manager appeared before U.S. Northern Ohio District Court Judge Benita Y. Pearson, who set sentencing for late January.

Scheduled for change-of-plea hearings later this week in Pearson’s courtroom are Ryan P. Sheridan, 39, of Leetonia, who is expected to appear before Pearson at 3 p.m. Friday; his wife, Jennifer M. Sheridan, 41, of Austintown, whose hearing is set for Thursday afternoon, and Braking Point’s Whitehall office manager Lisa M. Pertee, 51, of Sunbury, who is scheduled to be in court 1:30 p.m. Friday.

Dr. Thomas Bailey, 45, of Poland, was the first defendant to change his plea Tuesday, admitting to administering Braking Point patients 3,104 units of the anti-opioid drug Suboxone without certification from the Drug Enforcement Agency. Dr. Arthur H. Smith, 55, of Austintown, Braking Point’s former medical director, later admitted allowing Bailey to administer the Schedule 3

narcotic knowing he wasn’t certified to do so.

Both doctors face up to six months in prison when they are sentenced by Pearson on Jan. 21, 2020. However, the judge pointed to sentencing guidelines that indicated the doctors probably will get a two-year probation that essentially will keep them from practicing medicine.

Pearson told the doctors they would not be able to participate in federal Medicaid or Medicare programs during the probation period, effectively keeping them from practicing.

When asked why he changed his plea, Bailey told the judge: “The facts (of the case) meet my behavior, and I thought it was in my best interest.”

Smith told the judge he should have “kept better track of things.” The initial indictment noted that Smith was frequently absent from Braking Point except for twice-a-month visits.

The fraud conspiracy charges against the doctors were dismissed, and bond for both was continued until sentencing.

Pleading guilty to one count of conspiracy to commit Medicaid fraud was Kortney L. Gherardi, 30, of Girard, who is expected to be sentenced Jan. 23, 2020.

Gherardi, whose bond also was continued, was Braking Point’s office manager in Austintown who was accused of billing Medicare for medical services at the facility’s gymnasium when the patients were just working out.

“There was no treatment,” Gherardi told the judge.

Sentencing guidelines show that Gherardi will probably serve some jail time, but not more than 48 months, but the final decision is up to the judge. Lead prosecutor, U.S. Attorney Mark Bennett, said Gherardi’s action cost Medicaid a loss of $1.5 million, although the judge said she will be responsible for a joint restitution of about $2.4 million with Ryan and Jennifer Sheridan.

Medicaid was billed $48 million for drug and alcohol recovery services that were not provided, not medically necessary, lacked proper documentation, or had other issues that made them ineligible for reimbursement.

All six were originally charged with conspiracy to commit health care fraud. Other 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.

Ryan Sheridan, who remains in federal custody, was the sole owner of Braking Point Recovery Center and owned and operated numerous other businesses, including Breaking Point Health and Fitness LLC and Braking Point Recovery Housing LLC, which owned recovery houses for individuals attempting to maintain abstinence from drugs and alcohol, according to the indictment.

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, according to the indictment.

Prosecutors also are looking at a forfeiture of $3 million of 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.” Gherardi told the judge she does not own the property mentioned.

The case was investigated by the U.S. Department of Health and Human Services — Office of Inspector General, FBI, IRS criminal investigations, DEA, and Ohio Attorney General’s Medicare Fraud and Corruption Unit.

gvogrin@tribtoday.com