MONTCLAIR, NJ – A Montclair man was recently charged by the Acting Attorney General Robert Lougy in an elaborate insurance fraud scheme.
Chiropractor John Langeraap, charged with conspiracy to commit insurance fraud, was the front man for Philip Potacco’s South Orange Medical Facility Consulting Group, LLC.
Attorney, Mark Gertner of Montclair, was also arrested in the medical fraud ring.
Charges were jointly investigated with the AG’s office and the Insurance Fraud Prosecutor’s office.
Kinnelon resident Potacco had been stripped of his license to practice in 2002. He was also charged as being the mastermind of the scheme, according to a statement released by the attorney general’s office. The Morris County Superior Court indictment charges Potacco with conspiracy, money laundering and “a host of other crimes in connection with the scheme.”
The medical fraud scheme is reported to have “bilked $4 million from numerous insurance carriers.” Potacco is alleged to have hired Langeraap to act as the owner while Potacco actually ran the South Orange Medical Facility. Potacco is also alleged to have hired people known as runners to “recruit accident patients to the facility, including people who had staged their accidents,” according to the report.
The Acting Attorney General’s statement said Potacco submitted phony insurance claims, including claims for services that were never rendered for these solicited patients, relying on Langeraap’s license.
Potacco is reported to have moved $3,991,812 from the fraudulent insurance claims into an account of another company he had set up called Medical Consulting Group, LLC. Potacco then took the money from this shell company for his personal use.
In another part of the fraud scheme Potacco acted as a runner directing patients from his South Orange Medical Facility Consulting Group to a South Orange personal injury attorney for a fee. The attorney Gertner, then filed the insurance claims for them, based on Potacco’s falsified medical reports, according to prosecutors.
The attorney, Gertner, was arrested.
“This was an elaborate web of lies and deceit allegedly spun by one disgraced medical practitioner who cloaked himself in the identity of a licensed practitioner to steal millions of dollars from insurance companies,” said Acting Attorney General Lougy. “It is especially disturbing that this bad apple was able to entice professionals in good standing to join his criminal endeavors.”
The 37 year-old chiropractor Langeraap pleaded guilty to conspiracy to commit insurance fraud.
The 66 year-old attorney Gertner pleaded guilty to criminal running.
Lougy’s statement said Potacco was charged with conspiracy, money laundering, theft by deception, health care claims fraud, insurance fraud, criminal running, falsifying medical records, official misconduct, unlicensed practice of chiropractic. The business entities were also charged. Two others were charged with running.
“This case sends a message that conspiracy to corrupt and victimize the healthcare insurance system will not be tolerated in New Jersey,” said Acting Insurance Fraud Prosecutor Christopher Iu. “Anyone who plays a part in defrauding insurers – from the mastermind to the middlemen to the minions - will be prosecuted.”