Club Owner Expected to Plead Guilty to Health Care Fraud


HATFIELD, PA -- The attorney for the owner of a Philadelphia-area health club said his client expects to plead guilty to charges of health care fraud.

Attorney Donald J. Goldberg represents Michael Karp, owner of the Hatfield (PA) Athletic Club and former owner of Rehab One, a chiropractic and rehabilitation facility that had been housed inside the club but is no longer in operation. Mark Levin, a former owner of Hatfield Athletic Club and Rehab One, and Raymond Brozek, a chiropractor hired by Karp and Levin, all were charged last week in connection with a $1.9 million scheme to defraud Independence Blue Cross (IBC).

“Michael has owned up to his responsibility and can be expected to plead guilty,” Goldberg told The Reporter of Lansdale, PA.

The Hatfield Athletic Club fitness center has three other tenants—a martial arts academy, a dance studio and a gymnastics program—all of which are under separate ownership and have not been affected by the case, says Frank Borusiewicz, general manager for the club, which is located 30 miles north of Philadelphia. A Spinning studio has replaced the space formerly occupied by the rehabilitation center, Borusiewicz adds.

U.S. Attorney Michael Levy announced the charges last week. The Federal Bureau of Investigation and the U.S. Postal Inspection Service investigated the case.

Between 2004 and 2006, Levy alleges, Rehab One fraudulently billed IBC for chiropractic treatments that Brozek performed that were not medically necessary. Levy also alleges that Brozek, Levin and Karp knew that Brozek—or any other licensed medical professional—not only did not perform the services but they all knew the services were not reimbursable. In addition to seeing patients at Rehab One, Brozek allegedly saw some patients at a gym located in the basement of Levin’s home, known as Rehab Two, and at the homes of Levin’s friends.

Brozek allegedly prepared fraudulent bills for Hatfield Athletic Club employees who signed Rehab One’s patient log but did not receive treatment. Brozek also allegedly completed forms that Levin and Karp provided him containing the names of Hatfield Athletic Club employees and family members who purportedly received weekly chiropractic treatment. Further, Brozek allegedly prepared bills that included fictitious procedure codes and false representations of patient symptoms and clinical findings.

The submission of fraudulent medical bills to IBC totaled about $1.9 million, resulting in payments from IBC totaling close to $400,000.

If convicted, Karp and Brozek each face a maximum sentence of 30 years in prison and a $500,000 fine. Levin faces a maximum sentence of 10 years in prison and a $250,000 fine. All three may also be ordered to pay restitution to IBC.

Borusiewicz would not comment on the current ownership situation, nor would he speculate on who the owner would be should Karp face prison time. Borusiewicz will continue to retain all management responsibility of the club, he adds.

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