On February 13, 2025, Aaron Hertel and Michael Brown pled guilty to a multi-million dollar health care scheme that was determined to be the largest ever white-collar crime in the history of Erie, Pennsylvania. “Avarice,” considered a deadly sin that makes the getting and keeping of money a purpose, was argued as the motive for Hertel and Brown when establishing the Hertel and Brown’s Physical & Aquatic Therapy facility. While neither Hertel and Brown shared what motivated them to steal over $22 million from the U.S. taxpayer, it was apparent that their business had been founded on the basis of fraud and not patient services.
Starting from when they opened the physical therapy company in 2007, Hertel and Brown conspired to overbill insurance companies as well as Medicare and Medicaid with more than $20 million in fraudulent claims for services that the practice never provided. Their intent, supported by documented exchanges between Hertel and Brown, acknowledged the need for what they called “creative billing” to help the business. For Hertel and Brown that included the use of unlicensed employees giving unlicensed treatments to patients, who were billed as if a physical therapist conducted those treatments. They also allegedly circumvented Medicare by never billing customer care as group treatment, despite many patients being worked on at the same time – all while employing a compliance officer who willingly turned a blind eye to the fraud.
Hertel and Brown agreed to be sentenced to six years in federal prison and three years of supervised release when they are sentenced August 28, 2025.
Great job by the Department of Health and Human Services in this case.
Today’s Fraud of The Day is based on article “Hertel & Brown Physical Therapy Founders Plead Guilty in Federal Fraud Case” published by WENY News on March 3, 2025.
The founders of Hertel and Brown Physical and Aquatic Therapy both pleaded guilty Monday in a federal fraud case. Aaron Hertel and Michael Brown entered the plea to a count of attempt and conspiracy, which federal prosecutors filed against the business. Hertel pleaded guilty to the same charge on behalf of the business.
Hertel and Brown must also forfeit their interest and equipment for the Avonia Rd. location in Fairview. The same goes for a residence in Florida. Sentencing is set for Aug. 28. A former billing specialist Patricia Berchtold also entered a guilty plea to attempt and conspiracy, admitting her involvement in the case. Prosecutors read emails which showed her involvement.
