Co-Founder of Addiction Center Pleads Guilty for Role in $100M Fraud Scheme

The co-founder of a Pennsylvania addiction rehab center has pleaded guilty to conspiracy to commit health care fraud for his role in an “elaborate” insurance scheme, according to the U.S. Department of Justice (DOJ).

The scheme fraudulently billed insurers for more than $100 million, local newspaper The Intelligencer reported.

Defendant Branden Coluccio entered the plea Wednesday in U.S. District Court. As part of the deal, Coluccio — co-founder of Liberation Way, a now-defunct substance abuse treatment provider in Yardley, Pennsylvania — is required to pay more than $3 million in restitution. He’s also expected to face 37 months in prison.

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The news comes after state and federal investigators uncovered a variety of fraud schemes at Liberation Way. Four other defendants connected to those have already pleaded guilty.

Specifically, Coluccio was involved in illegally buying and paying for premium insurance policies for prospective patients, according to the DOJ. Liberation Way then billed insurers for treatments allegedly provided to those patients, all the while acting as though patients had purchased the policies themselves.

Other schemes uncovered by investigators include over-billing connected with the facility’s medical director, as well as a kick-back scheme involving urine tests that weren’t medically necessary.

“Liberation Way was essentially a front for several multi-layered, years-long schemes that crossed state lines and victimized hundreds of people who needed help,” U.S. Attorney William McSwain said in a DOJ press release announcing the news. “The convictions coming out of this case send a clear message to those attempting to profit from fraud and the despair of individuals battling addiction: If you behave in this manner, you will be held accountable.”

Coluccio’s sentencing is scheduled for May 22. 

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