Cuyahoga County

Racketeering charges detail scam to defraud Workers’ Comp fund

10/26/2016 BWC indictment.pdf
Cleveland — A chain of Cleveland area medical clinics that specialize in treating injured workers, its former co-owner and a doctor who worked there have been indicted on criminal racketeering charges, Ohio Attorney General Mike DeWine and Cuyahoga County Prosecutor Timothy J. McGinty announced today.

A 170-count indictment returned by a Cuyahoga County Grand Jury charges that between 2008 and 2014, The Medical Care Group – which has had offices in Cleveland, North Olmsted, Parma, Warrensville Heights and Euclid – former co-owner Dianne Javier and Dr. Stephen Bernie ran a criminal enterprise that systematically defrauded Ohio’s Bureau of Workers’ Compensation (BWC) by billing it for procedures that were never done and by inflating the percentage of disability for injured workers, thereby making them eligible for higher payments from the state.

The indictment also charges that the defendants handed out prescriptions for medications including powerful opioids without examining or monitoring the individuals requesting them and routinely tampered with official records.

Dr. Bernie, 77, and the business are named in all 170 counts of the indictment. Ms. Javier, 71, is named in 75 counts.

A former employee of The Medical Care Group, Kim Seltzer, pled guilty last year to Workers’ Compensation Fraud, Tampering with Records and Drug Trafficking. All charges stemmed from his work at the chain’s North Olmsted clinic. Mr. Seltzer is currently serving a 51-month sentence at the Mansfield Correctional Institution.

The charges announced today came after a lengthy investigation by the BWC and the Westshore Enforcement Bureau.

According to the indictment, “Undercover agents and a confidential informant saw Bernie month after month and never received a proper medical examination. Dr. Bernie said that he conducted injured worker examinations when he did not. Dr. Bernie signed prescriptions that were passed out to injured workers/patients when Dr. Bernie was on vacation.”

“Ohio is in the middle of an opiate epidemic, and blatant improper prescribing, such as what is alleged in this case, is contributing to the drug crisis,” said Attorney General DeWine.

Investigators estimate that the criminal acts of the defendants cost the State of Ohio roughly $216,000.
“These defendants and their criminal enterprise stole money from the State of Ohio that was supposed to be set aside to help injured workers,” said Assistant Cuyahoga County Prosecutor Jennifer L. O’Malley of the Economic Crime Unit. “This kind of fraud is unfair to the employers whose premiums fund the system, to honest providers and to workers who deserve only the best care.”

In addition to Engaging in a Pattern of Corrupt Activity, a felony of the first degree, the indictment includes counts of Conspiracy, Workers’ Compensation Fraud, Theft, Tampering with Records, Drug Trafficking and Telecommunications Fraud.

Click here to read the indictment

Contact: Joseph Frolik, Director of Communications and Public Policy. Phone: (216) 443-7488; or Cell: 216-640-6186. Email: jfrolik@prosecutor.cuyahogacounty.us