Founders of Pennsylvania Physical Therapy Chain Sentenced to Six Years in Federal Prison in Healthcare and Wire Fraud Scheme

Two founders of a regional physical therapy business in northwestern Pennsylvania have been sentenced to federal prison after admitting they orchestrated a large-scale healthcare billing fraud scheme that improperly billed federal and private health programs for treatment services that were never provided as claimed.

Aaron Hertel, 47, of North East, Pennsylvania, and Michael Brown, 49, of Erie, Pennsylvania, were each sentenced to six years in federal prison, followed by three years of supervised release, after pleading guilty to conspiracy to commit wire fraud and healthcare fraud.

United States District Judge Susan Paradise Baxter also ordered each defendant to pay a $250,000 fine. A separate hearing scheduled for April 2026 will determine the amount of restitution owed for the losses caused by the fraud scheme.

Fraudulent Billing Operation

According to evidence presented in federal court, Hertel and Brown owned and operated Hertel & Brown Physical and Aquatic Therapy, a multi-location physical therapy provider in the Erie region.

Federal prosecutors stated that the two men led and supervised a conspiracy involving numerous employees across five clinic locations that centered on systematically inflating and falsifying billing records submitted to health insurance providers.

Investigators determined the clinics routinely used unlicensed technicians to perform physical therapy treatments while billing insurers as though the services had been provided by licensed physical therapists or licensed physical therapist assistants, which carry higher reimbursement rates.

Federal healthcare programs and insurance companies were therefore billed for professional services that had not been performed by qualified providers.

Inflated Treatment Hours and Manipulated Records

Court filings revealed that the fraudulent billing extended beyond improper staff credentials.

Investigators found the clinics frequently billed more hours of therapy than the facilities were physically open, meaning the amount of treatment claimed exceeded the number of hours the clinics were operating each day.

Prosecutors also stated that patient scheduling records were manipulated to falsely reflect one-on-one therapy sessions, which are required under certain Medicare billing standards.

In practice, however, multiple patients were reportedly treated simultaneously while billing records claimed each patient had received individualized therapy sessions.

These practices allowed the company to generate substantially inflated reimbursements from Medicare, Medicaid, TRICARE, and other healthcare insurance programs.

Wider Criminal Case

The investigation resulted in a broader federal indictment filed in November 2021 charging 20 individuals along with the therapy business itself.

Seventeen defendants ultimately pleaded guilty to conspiracy charges, while another individual was convicted of healthcare fraud following a jury trial in April 2025.

Federal authorities described the conspiracy as a coordinated effort involving multiple employees who participated in falsifying treatment documentation and insurance billing records.

Impact on Employees and Taxpayers

Before imposing sentence, Judge Baxter noted the significant harm caused by the scheme, including the impact on employees working within the clinics as well as the financial losses suffered by federally funded healthcare systems.

Healthcare fraud cases involving federal programs ultimately result in losses borne by taxpayers and public health systems, which prosecutors say can drive up healthcare costs and undermine trust in medical providers.

Federal Healthcare Fraud Enforcement

Healthcare fraud remains a major enforcement priority for federal authorities. Investigations frequently involve financial record analysis, insurance billing audits, and whistleblower reports from employees within medical organizations.

Programs such as Medicare, Medicaid, and TRICARE are particularly vulnerable targets due to the large volume of claims processed each year and the complex billing structures used within healthcare systems.

Investigative Agencies

The case was investigated by multiple federal and state agencies, including:

• Federal Bureau of Investigation (FBI)
• U.S. Department of Health and Human Services – Office of Inspector General (HHS-OIG)
• Department of Veterans Affairs – Office of Inspector General (VA-OIG)
• Defense Criminal Investigative Service (DCIS)
• Pennsylvania Office of Attorney General – Medicaid Fraud Control Section
• U.S. Office of Personnel Management – Office of Inspector General

The prosecution was handled by Assistant United States Attorneys Christian A. Trabold, Paul S. Sellers, and Molly W. Anglin.

Federal authorities stated that restitution owed by the defendants and the company will be determined during the upcoming court hearing.

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