Jury acquits 2 therapists, convicts another of lesser charge in Hertel & Brown fraud trial

Yahoo

25-04-2025

(This story has been updated to add new information.)
A jury has reached a split verdict in the case of three defendants who went to trial in the 21-defendant Hertel & Brown federal health care fraud case.
After deliberating about 11½ hours over two days, a jury of nine men and three women on April 23 acquitted two of the defendants, Abigayle J. Fachetti and Marissa S. Hull, of all charges against them — the felonies of health care fraud and conspiracy to commit wire fraud and health care fraud.
The jury convicted the third defendant, Julie A. Johnson, of health care fraud and acquitted her of the conspiracy count. The fraud count is the lesser charge.
The jury issued the verdict after a monthlong trial in which the defense never denied that widespread billing fraud occurred at the Erie-based Hertel & Brown Physical & Aquatic Therapy, where Johnson, Fachetti and Hull worked for years. Johnson, 43, is a licensed physical therapist. Hull, 31, and Fachetti, 34, were physical therapy assistants.
The defendants argued they were caught up in the scheme unwittingly and never intended to commit fraud.
Closing arguments were on April 21. The jury deliberated about eight hours on April 22 and about 3½ hours on April 23.
U.S. District Judge Robert Colville read the verdicts at 1 p.m. on April 23 in federal court in Erie. He let Johnson remain free on an unsecured bond of $10,000, the same bond terms for all the defendants. Colville scheduled Johnson's sentencing for Sept. 3.
The health care fraud charge of which Johnson was convicted carries a maximum sentence of 10 years in federal prison. She is all but certain to face far less time under the federal sentencing guidelines, which account for lack of a prior record and other factors.
Johnson, Hull and Fachetti would have faced a maximum sentence of 20 years in federal prison had they been convicted of the conspiracy count. The conspiracy count was the first of the two counts listed in the indictment, issued in 2021.
Johnson's conviction on the felony count puts her at risk of losing her physical therapy license. Fachetti and Hull are no longer working in the physical therapy field, according to testimony.
Hull, Fachetti and Johnson cried and hugged their lawyers and family members after the verdict.
"Although we are disappointed in the outcome, we feel vindicated by the jury's verdict as to count one, and are grateful for their efforts in this case," one of Johnson's lawyers, Efrem Grail, of Pittsburgh, said in an interview. Johnson's other lawyer is Julia Gitelman, also of Pittsburgh.
Erie lawyer Elliot Segel represented Hull in what he said is the last case he will handle as he retires from his 45-year legal career. In his closing argument, he told the jury that "liberty has been his client" in all his cases, and that, in Hull's case, he was fighting "for the freedom of a good person."
"I'm happy," Segel said after the verdict. "It took a lot for her to stand up and, with the family support, decide to go to trial. We always felt it was the right decision.
"She spent four years going through this," Segel said. "It's life-changing, regardless of the outcome."
Fachetti's lawyers were Jeffery Carr and Sarah Levin, both assistant federal public defenders. They declined to comment on the verdict.
The lead prosecutor, Assistant U.S. Attorney Christian Trabold, also declined to comment.
The 18 defendants who declined to go to trial in the Hertel & Brown case included business owners Aaron W. Hertel and Michael R. Brown. All 18 pleaded guilty only to the conspiracy count. Many of those defendants, especially those listed lower in the 21-defendant indictment, are expected to be eligible for probation at their sentencings over the summer, according to information presented at their plea hearings over the last several months.
Hertel and Brown each face a recommended sentence of six years in federal prison when they are sentenced on Aug. 28.
Johnson was listed as seventh-highest in the indictment, in which the lead defendants were Hertel & Brown as a business and Hertel and Brown as individuals. Fachetti was listed 17th and Hull 19th.
At trial, the defense argued that Johnson, Fachetti and Hull had no intent to be part of the scheme, and that their superiors, including the owners, lied to them and duped them into carrying out what the three said they later learned was fraudulent behavior. The defense said the three believed that what they were doing was correct under the operational norms at Hertel & Brown.
The U.S. Attorney's Office argued that the three defendants knew what they were doing was wrong at the time and that they willingly participated in the fraud. Trabold emphasized that three learned about proper procedures and billing practices in physical therapy school, and that the three were required to follow state regulations for physical therapists.
The U.S. Attorney's Office said the $22 million fraud occurred over 14 years, starting when Hertel & Brown was founded in 2007 and ending about a month before all 21 defendants were indicted in November 2021 in the largest-ever prosecution of white-collar crime in Erie.
The main element of the fraud, according to undisputed evidence, was Hertel & Brown's use of low-paid, unlicensed technicians to treat patients and billing Medicare, Medicaid and private insurers as if licensed physical therapists and physical therapy assistants did the work.
Hertel & Brown also billed for more treatment hours than its clinics were open, billed for services that were never provided, billed for one-on-therapy when patients were treated in less expensive group therapy and billed for treatment on behalf of physical therapists who were on vacation at the time, including in Cancun, Mexico. Evidence showed the fraud was designed to boost revenue to offset decreased insurance reimbursements.
A trial, Fachetti and Hull took the stand and admitted that they participated in fraudulent activity, such as completing treatment notes for physical therapists when unlicensed techs had actually provided the therapy.
But Fachetti and Hull, who both primarily worked at what was Hertel & Brown's office in Harborcreek Township, said they had no idea what they were doing was wrong. They said they were following the lead of their superiors.
"I felt manipulated," Fachetti testified.
Johnson worked mainly at what had been Hertel & Brown's headquarters in the West Erie Plaza in Millcreek Township, where she specialized in women's health. Johnson did not testify, though she gave a statement to the FBI in which agents said she said fraud was widespread at Hertel & Brown and that all the employees "turned a blind eye" to it.
The defense relied on expert witnesses and character witness to try to show that the defendants were law-abiding and well-regarded clinicians who would have never knowingly set out to commit fraud.
At trial, the U.S. Attorney's Office called 19 witnesses over 12 days. They included five former Hertel & Brown employees who pleaded guilty. Hertel and Brown did not testify.
Trabold and the other prosecutors, Paul Sellers and Molly Anglin, both assistant U.S. attorneys, also called physical therapy professors. Those witnesses said the defendants would have learned about proper billing practices in physical therapy programs, including those at Gannon University, where Johnson received her doctorate, and Mercyhurst University, where Fachetti received her associate's degree as a physical therapy assistant.
Trabold highlighted the professional obligations of the three defendants. He said they knew that they were breaking the law when they participated in the fraud at Hertel & Brown. He cited their educational backgrounds and the "mountain of evidence" against them.
In his closing argument, Trabold summarized what he saw as the defense's case: "I am a licensed medical professional. All this fraud is occurring around me for years, and I have no clue what is happening."
Trabold urged the jury to reject the claims.
"You know what went on here," he said.
The defense countered that Johnson, Fachetti and Hull never intended to be fraudsters.
"Proof of intent is not here," Levin, one of Fachetti's lawyers, said in her closing argument. "Just being around a conspiracy is not enough."
Ed Palattella at [e-mail] or 814-870-1813.
This article originally appeared on Erie Times-News: Jury acquits 2 Hertel & Brown defendants, convicts 3rd of lesser count