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Guidance counselor sent to prison for Medicaid fraud

ASHEVILLE — A 47-year-old elementary school guidance counselor from Tryon was sentenced to two years in prison after he pleaded guilty to billing Medicaid for more than $450,000 in false claims for mental and behavioral health services he did not provide,  U.S. Attorney R. Andrew Murray announced.

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In addition to the prison term, U.S. District Judge Martin Reidinger ordered the counselor, Joseph Frank Korzelius, to serve three years of supervised release and to pay $436,229.08 as restitution to Vaya Health, the administrator of Medicaid funds in Western North Carolina.

According to court documents and the sentencing hearing, from October 2013 to November 2016, Korzelius, a licensed professional counselor and a Medicaid-approved provider of mental and behavioral health services, owned and operated Western Carolina Counseling Services in Tryon.

Korzelius, who was also employed as a guidance counselor at Tryon Elementary School, used his position to identify students and their siblings that would be eligible for Medicaid coverage then used the information to create and submit billings for individual psychotherapy services that he never provided.

Court documents show that Korzelius had minimal documentation to support the billings for services. Further, many recipients who Korzelius billed for said they never sought or received services from either Korzelius or Western Carolina Counseling Services. Court documents showed that Korzelius controlled the bank accounts where the Medicaid approved reimbursements were deposited. During the course of his scheme, Korzelius submitted over $450,000 in false claims and received $436,229.08 in reimbursements for those fraudulent claims.

Korzelius pleaded guilty to one count of health care fraud. He will be ordered to report to the federal Bureau of Prisons to begin serving his sentence, upon designation of a federal facility. All federal sentences are served without the possibility of parole.

The investigation was handled by the North Carolina Department of Justice, Medicaid Investigations Division (MID), and was prosecuted in the Western District of North Carolina by Special Assistant United States Attorney Timothy Rodgers through the MID’s participation in the Western District’s joint Health Care Task Force. The Task Force is a multi-agency team of federal and state investigators, working in conjunction with Civil and Criminal Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system and reducing the potential for health care fraud in the future. The Task Force builds upon existing partnerships between agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

Anyone who suspects Medicare or Medicaid fraud may report it by phone at 1-800-447-8477 (1-800-HHS-TIPS), or by email at HHSTips@oig.hhs.gov. To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.