11 Charged In Yardley Drug Treatment Center Scam: AG

YARDLEY, PA — Eleven people, including the co-founder of a Yardley-based drug and alcohol treatment center, have been charged in a fraud scheme in which prosecutors say they scammed millions of dollars while providing shoddy care that made patients prone to relapse.

Liberation Way co-founder Jason Gerner and others face state and federal charges in the case, including insurance fraud, identity theft and creating a kickback scheme for services that weren't medically necessary.

The charges are the result of an 18-month grand jury investigation into nine businesses associated with Liberation Way. Prosecutors say the investigation unveiled "a sophisticated, multi-layered scam that took advantage of vulnerable people."

While doing so, Liberation Way became a $40 million company in less than three years, with billings to various insurance companies in excess of $100 million.

"The owners and operators of Liberation Way showed blatant disregard for the well-being of the people they were supposed to help, and for the opioid epidemic that is ravaging our communities," said state Attorney General Josh Shapiro. "This public health emergency is my top priority, and our actions to combat this crisis include prosecuting those who illegally profit off substance use disorder."

Based in Yardley with locations in Bala Cynwyd and Fort Washington in Montgomery County, Liberation Way and associated companies illegally secured patients' insurance policies, then provided "treatment that was sub-standard, medically unnecessary, or sometimes nearly nonexistent," prosecutors say.

One of the techniques prosecutors describe is the use of so-called "sober homes." Patients, they say, would be directed to live at unlicensed, company-owned residences so Liberation Way could maximize the amount of treatment time it could bill to insurance companies.

The company ran daily shuttles from the sober homes to treatment locations and patients were forced to adhere to the drivers' scheduled and not free to come and go, as is typical for outpatient treatment, the AG's office said.

One location on Stump Road in North Wales was known as "the party house," prosecutors say. There, patients encountered "unsavory or even unsafe situations where the temptation to relapse was rampant," according to prosecutors.

Some of the housing was co-ed and it was discovered that employees were engaging in sexual relationships with patients in treatment, the attorney general's office said.

Prosecutors also accuse Liberation Way of specifically targeting out-of-network patients who it could bill their insurance more and concocting a kickback scheme with a Florida company to conduct unnecessary urine tests on patients, sometimes as often as four times a day.

Often, the lab results for the tests weren't even entered onto a patient's records, according to prosecutors.

The grand jury heard testimony that Philadelphia-based Independence Blue Cross alone was billed more than $115 million by Liberation Way between July 2015 and early 2018. Some of the billing was for polices that Liberation Way had schemed to secure just days, or even hours, before the billing and $17 million of that was overbilling, prosecutors say.

Patients who relapsed under Liberation Way's care would re-enter treatment at a higher level of care, resulting in even higher billing rates. Prosecutors say patients were cycled through treatment as many times as possible, sometimes as many as eight times.

By 2018, Liberation Way and its founders had profited more than $44 million from illegal schemes, prosecutors claim. In December 2017, the company was sold to a private equity firm for $41.6 million.

Those arrested and facing state charges are:

• Jason Gerner, 46, of Shamong, NJ
• Brandon Coluccio, 31, of Doylestown, PA
• Michael Armstrong, 36, of Cherry Hill, NJ
• Jesse Peters, 44, of Lake Worth, FL
• Dr. Domenick Braccia, 57, of Perkasie, PA
• Dr. Ramesh Sarvaiya, 64, of Voorhees, NJ
• Muhammad Abdul-Hadi, 33, of Philadelphia
• Scott Collins, 45, of Marlton, NJ
• Michael Sarubbi, 53, of Cherry Hill, NJ
• Dana Fetterman, 35, of Haddon Township, NJ
• Elsie Concepcion, 40, of Pennsauken, NJ.

Sarvaiya and Peters also are facing federal charges in the case.

The businesses facing state charges are Liberation Way, Liberation Behavioral Health, Liberation House, LEAF Healthcare Financial, Philly 180, Alban, Legacy House, Prestige Worldwide and Hope for Families.

Authorities seized $14.6 million from the investment accounts of Gerner and Coluccio, with more seizures anticipated.