Sheridan Pleads Guilty to $48M Medicaid Fraud
YOUNGSTOWN, Ohio – Ryan Sheridan, former owner of Braking Point Recovery Centers in Austintown and Whitehall, awaits sentencing in custody after he pleaded guilty to a 60-count indictment.
Sheridan 39, accompanied by attorney Damian Billak, entered the pleas during a Friday afternoon change-of-plea hearing before Judge Benita Pearson. In custody at Northeast Ohio Correctional Center, he stood in restraints, was clad in orange prison garb and wore a beard and graying hair tied into a ponytail.
He and five associates were charged in February with conspiracy to commit health care fraud, health care fraud, use of a registration number issued to another to obtain a controlled substance, operating a drug premises, money laundering and conspiracy to distribute controlled substances.
The charge followed raids last year on Braking Point’s recovery centers in Austintown and Whitehall, Ohio, as well as his home in Leetonia.
The government said Sheridan and his co-defendants billed Medicaid $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.
Sheridan’s responses to Pearson’s questions during the hearing, which lasted about 90 minutes, only occasionally strayed from answers of a few words to acknowledging he understood his rights and the consequences of pleading guilty.
He elaborated when asked to discuss the blood pressure and anxiety medications he was on. Asked why he was pleading guilty, Sheridan said that based on the facts of the case, going to trial didn’t “seem like a good idea.” He agreed that the facts of the case met his behavior and that he was not coerced into entering the plea.
Co-defendants Jennifer Sheridan, Kortney Gherardi, Lisa Pertee, Thomas Bailey and Arthur Smith previously entered guilty pleas to charges in the indictment.
In addition to any prison time, the government also will seek restitution of $24.48 million from the defendants on behalf of the Ohio Department of Medicaid, Assistant U.S. Attorney Mark Bennett said.
During the change-of-plea hearing, the businessman also agreed to the forfeiture of several of the assets seized from him and corporate entities he owns, including $360,066 in cash real estate holdings and vehicles and replicas of vehicles from “Back to the Future,” “Ghostbusters” and “Batman.”
Sheridan will be sentenced Jan. 23 following a pre-sentence investigation. Depending on the results of the investigation and his classification, he could face up to 14 years of incarceration if sentences are applied concurrently rather than consecutively.
Sheridan also faces a related case in Columbiana County that could impact the sentencing.
Pearson rejected without prejudice Billack’s oral request to revisit the issue of Sheridan’s detention until sentencing, but said she would consider a motion laying out his rationale for release if it made a convincing case.
Sheridan agreed to the destruction of patient records by a custodial agency.
“These guilty pleas clearly indicate these individuals intended to fraudulently bill and deceive taxpayers out of millions of dollars,” FBI special agent in charge Eric B. Smith said in a news release. “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 health-care fraud.”
“These defendants stole tens of millions of dollars from taxpayers through fraudulent billing and other crimes,” U.S. Attorney Justin Herdman said in the same release. “They used the drug epidemic plaguing Ohio as a way to line their pockets and profited off the suffering of others.”
In addition to Sheridan, Jennifer M. Sheridan of Austintown (his ex-wife), Kortney L. Gherardi Girard; Lisa M. Pertee of Sunbury; Thomas Bailey of Poland, and Arthur H. Smith of Austintown, are expected to be sentenced in January.
In addition to Braking Point Recovery Center, 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 for individuals attempting to maintain abstinence from drugs and alcohol.
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 Oct. 18, 2017.
According to federal prosecutors, 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 Suboxonein 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.
“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.”
“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,” said Ohio Attorney General Dave Yost. “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.
Copyright 2020 The Business Journal, Youngstown, Ohio.