Club Owner Pleads Guilty to Health Care Fraud

HATFIELD, PA -- The owner of Hatfield (PA) Athletic Club and a Philadelphia-area chiropractor recently pleaded guilty to health care fraud and mail fraud.

Michael Karp, the club owner, and chiropractor Raymond Brozek entered their pleas in late May and are scheduled to be sentenced in September, according to Philadelphia’s Intelligencer. They each face a maximum sentence of 30 years in prison and a $500,000 fine. Because each pleaded guilty, Karp and Brozek could face shorter prison terms, the newspaper reports.

A former owner of the club, Mark Levin, is expected to plead guilty today in the U.S. District Court for the Eastern District of Pennsylvania in Philadelphia. Levin is charged with health care fraud in connection with the operation that cost Independence Blue Cross (IBC) $1.9 million in fraudulent medical bills, according to the newspaper. Levin faces a maximum of 10 years in jail and a $250,000 fine.

Karp and Levin ran a chiropractic and rehabilitation facility inside Hatfield Athletic Club called Rehab One, which is no longer in operation. Brozek was hired by Karp and Levin to perform chiropractic treatments at Rehab One, which fraudulently billed IBC for treatments that patients never received. The treatments also were deemed medically unnecessary and not reimbursable.

In March, Hatfield Athletic Club general manager Frank Borusiewicz who retains all management responsibility of the club, would not comment on the future of the club’s ownership situation. Borusiewicz did say that Hatfield Athletic Club’s three tenants—a martial arts academy, a dance studio and a gymnastics program—are under separate ownership have not been affected by the case.

In a separate case in Philadelphia, federal authorities last week charged the owner of a club in Horsham, PA, of defrauding eight insurance companies by submitting $3 million worth of fraudulent bills, the Intelligencer reports. Joseph Lerner, a chiropractor who owns the Horsham Fitness Club, allegedly ran the fraud from January 2007 to March 2010 and collected almost $2 million, according to the newspaper.

Lerner allegedly told people they could receive massages and personal training for the price of a $10 insurance co-payment by having their insurance companies pay for the services, prosecutors say. Lerner submitted the bills even though insurers do not cover those services, according to the newspaper.

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