New Jersey Man Sentenced to Three Years in Prison and Over $9 Million in Restitution for Drug Rehab Health Care Fraud Scheme

PHILADELPHIA – United States Attorney William M. McSwain announced that Jason Gerner, 46, of Shamung, New Jersey, was sentenced to 36 months imprisonment and three years of supervised release by United States District Court Judge Wendy Beetlestone for his role in multiple healthcare fraud schemes as a co-founder of the drug and alcohol rehabilitation facility Liberation Way, which had locations in Yardley, Bala Cynwyd and Fort Washington, Pennsylvania. As part of his sentence, he was also ordered to pay restitution in the amount of $9,338,607 and ordered to forfeit $444,983.

In August 2019, the defendant pleaded guilty to charges of conspiracy to commit health care fraud and conspiracy to commit money laundering for his role as a founder and operating partner of Liberation Way. An investigation into the operations and management of the facility exposed an array of schemes, including: fraudulently purchasing premium insurance policies on behalf of prospective patients so that Liberation Way could bill for expensive “treatments” that it never provided; using pre-signed medical orders for tests and treatments for patients who were not actually seen or examined by the only doctor employed by Liberation Way; paying a different doctor to sign urine-testing orders for patients who were never seen or examined; shipping those urine samples for testing to laboratories in Florida in order to submit claims that were excessive and medically unnecessary, in order to maximize billing to insurance companies; receiving kickbacks for the insurance payments made to the laboratories for these overly frequent and expensive tests; and conspiring to hide the proceeds of the illegal urine-testing kickback scheme through a series of financial transactions involving payments to various shell companies disguised as consulting payments.

“My Office will not tolerate health care fraud in any form, especially the kind that takes advantage of at-risk patients and exploits their addictions,” said U.S. Attorney McSwain. “Those who think that they can game our health care system -- which is already strained under the weight of an ongoing opioid epidemic -- and prey upon vulnerable people will face the consequences. Gerner will rightly spend years in prison and pay millions of dollars as the result of his criminal conduct.”

 “The employees of Liberation Way looked at the opioid epidemic devastating Pennsylvania and saw an opportunity to make a buck off the backs of vulnerable people. Pennsylvanians with substance abuse disorder, who deserved care from Liberation Way, were harmed instead,” said Attorney General Josh Shapiro. “I’m proud of the work we’ve done with our partners in the U.S. Attorney’s Office to hold these scam artists accountable and get justice for the people of Pennsylvania.”

“Gerner and his colleagues operated Liberation Way under the guise of helping addicts get healthy,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In reality, the only things that benefitted were these fraudsters’ bank balances. Their elaborate, years-long swindle of the health care system victimized vulnerable patients for profit. The FBI is gratified all involved are being held accountable.”

“The U.S. Department of Labor, Employee Benefits Security Administration (EBSA), works closely with our federal and state law enforcement colleagues to bring to justice those who would, by their criminal activities, tamper with the hard–earned health benefits due the American worker,” said Employee Benefits Security Administration Philadelphia Regional Director Michael Schloss.

The case was investigated by the Federal Bureau of Investigation, the Department of Health and Human Services, the Office of Personnel Management, and the Department of Labor Employee Benefits Security Administration, in conjunction with the Pennsylvania Attorney General’s Office, and is being prosecuted by Assistant United States Attorney Nancy Beam Winter and Special Assistant United States Attorneys Robert Labar and Kristy Christ.