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Unlicensed South Orange Chiropractor Accused of Bilking Nearly $4M from Insurance

South Orange

Acting Attorney General Robert Lougy and the Office of the Insurance Fraud Prosecutor announced today that a former North Jersey chiropractor who was stripped of his to license to practice more than a decade ago, has been charged with masterminding a medical fraud ring that allegedly bilked nearly $4 million from numerous insurance carriers.

In an indictment handed up in Morris County Superior Court, Philip Potacco was charged with conspiracy, money laundering, and a host of other crimes in connection with the scheme he allegedly ran from his South Orange Medical Facility Consulting Group LLC (“SOTC”), 2010 to 2015.

Potacco, whose chiropractic license was revoked in 2002, allegedly hired a licensed chiropractor to act as a straw owner of SOTC while he ran it covertly. Potacco allegedly used illegal “runners” to recruit accident patients to the facility, including people who had staged their crashes. Potacco then fraudulently submitted insurance claims for those patients, using the billing information of the licensed chiropractor he had hired, prosecutors said. Some of those claims were for services that were never rendered, according to prosecutors.

Potacco funneled approximately $3,991,812 in claim money into SOTC’s account, prosecutors said. He then allegedly laundered the lion’s share of that money through a shell company called Medical Consulting Group LLC, (“MCG”). Once he transferred the money into the MCG account, Potacco used the account for personal use, withdrew thousands of dollars in cash, and wrote checks to deposit in his own name and his wife's name.

Potacco also acted as a runner, collecting money for referring SOTC patients to a South Orange personal injury attorney who filed insurance claims on their behalf, prosecutors said. Potacco, under the name of SOTC’s straw owner, provided falsified medical reports to support those claims, prosecutors said.

The chiropractor who acted as the front man for SOTC, John Langeraap, 37, of Sparta, has pleaded guilty to second degree conspiracy to commit insurance fraud. The attorney who paid for SOTC referrals, Mark Gertner, 66, of Montclair, has pleaded guilty to third-degree criminal running. Also pleading guilty to third-degree running in the case were Anulet Josaphat, 62, of Union, and Wilguere Rezan, 44, of Irvington.

The defendants charged in this indictment were:

Philip Potacco, 62, of Kinnelon

Jude M. DiManche, 41, of East Orange

Andre J. Richemond, 41, of East Orange

South Orange Trauma & Rehab, LLC

Medical Consulting Group, LLC

Potacco, SOTC, and MCG were all charged with conspiracy (1st degree), three counts of money laundering (1st degree), theft by deception (2nd degree), health care claims fraud (2nd degree), and insurance fraud (2nd degree), and criminal running (3rd degree). Potacco and MCG were also charged with falsifying medical records (4th degree). Potacco was also charged official misconduct (2nd degree), and unlicensed practice of chiropractic (3rd degree). DiManche was charged with two counts of criminal running (3rd degree). Richemond was charged with one count of criminal running (3rd degree).

In 2006 Potacco was sentenced to serve three years’ probation and to pay more than $48,000 in restitution after pleading guilty to theft by deception. In pleading guilty, Potacco admitted he continued to see patients after the state Board of Chiropractic Examiners revoked his license for misconduct in 2002. He also admitted he submitted nearly $100,000 in billings to insurance companies for medical services and treatments provided to patients while his license was revoked.

First degree charges carry a sentence of 10 to 20 years in state prison and a fine of up to $500,000; second-degree charges carry a sentence of five to10 years in state prison and a fine of up to $150,000; third-degree charges carry a sentence of three to five years in state prison and a fine of up to $15,000; fourth-degree charges carry a sentence of up to 18 months in state prison and a fine of up to $10,000.

People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline at 1-877-55-FRAUD, or visiting the Web site at http://www.njinsurancefraud.org. State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.

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