Ohio Clinic Owners Plead Guilty in Fraud Case:

The owners of the former MedBack chiropractic clinics in Toledo and Northwest Ohio have entered into plea agreements in federal court for a conspiracy and money-laundering scheme to defraud $4.8 million from federal and private insurers.

Chiropractor Paul M. Neumann, 46, and his brother, Timothy D. Neumann, 44, pleaded guilty in U.S. District Court to one count each of conspiracy to commit health-care fraud and conspiracy to commit money laundering.

They are accused of employing medical doctorsto submit false claims to public and private health-care insurers, concealing that patients were receiving noncovered chiropractic services.

In exchange for the pleas, the Neumanns agreed to cooperate in the investigation and testify at the trial of James N. Altiere III, a Monroe lawyer who was the in-house legal counsel for the company.

Altiere, 42, has pleaded not guilty to an eight-count indictment for his alleged involvement in the billing practices. No trial date has been set.

The agreements call for sentences of 37 and 31 months, respectively, for Paul Neumann and his brother. They will be sentenced by Judge Carr after the prosecutor’s case against Altiere is resolved.

The plea deal also requires the Neumanns to pay $1.7 million in restitution to the insurers for false billing claims and forfeit nearly $1.6 million in property and money to the government.

In addition, they must reimburse $550,000 to the government for the cost of the investigation and each is to pay $75,000 in fines. The agreement also calls for the Neumanns to be excluded from participating in federal health-care programs for 15 years.

The offices of MedBack were searched in October, 2000, when federal agents seized 973 boxes of records and the contents of nearly 20 computers. Agents interviewed 80 people associated with the former MedBack, including staff, physicians, chiropractors, and patients.