S.C. man convicted in scheme to defraud insurers Physical therapy clinic submitted false claims

March 14, 1998|By Michael James | Michael James,SUN STAFF

A South Carolina man was convicted yesterday for his part in what federal prosecutors called "a fraud factory" that swindled $3 million in an elaborate insurance scheme.

Maurice Wilson, 72, helped run the business with his daughter, Deborah S. Kolodner, who pleaded guilty last fall to mail fraud and is awaiting sentencing. Kolodner masterminded a thriving fraud operation from 1992 to 1995 out of Industrial Medical, her physical therapy clinic in downtown Baltimore.

A U.S. District Court jury in Baltimore deliberated about three hours yesterday before convicting Wilson of three counts of mail fraud and two counts of tax evasion. The case was the culmination of a federal investigation conducted by the Internal Revenue Service and FBI.

"Industrial Medical was one big scheme to defraud," said Special Assistant U.S. Attorney Michael DiPietro of the Maryland State Insurance Crime Task Force. "It was a fraud factory, and Mr. Wilson was a foreman on the day shift."

The business made a small fortune by defrauding insurance companies that thought they were reimbursing the company for physical therapy it supposedly provided to victims of traffic accidents. Industrial Medical -- through Kolodner and Wilson -- was submitting false claims for services it never rendered.

For instance, the clinic often outfitted patients with $5 foam cervical collars for neck injuries but charged insurers $125 each for them, claiming they were high-quality "Philadelphia collars" of sturdier material. The foam collar scheme alone grossed $153,483 from insurers in the 2 1/2 years the clinic was open, court papers said.

Clinic officials also double-billed insurance companies for X-rays, inflated costs of therapy, filed false legal claims through their law office and cheated a Florida factoring company of more than $2 million by selling off accounts receivable that it didn't have.

Kolodner and Wilson, who will be sentenced later, used the bulk of the money on high living and expensive automobiles.

Pub Date: 3/14/98

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