North Carolina Medicaid Program defrauded over $400,000

TRYON – Tryon Elementary School Guidance Counselor Joseph Frank Korzelius pleaded guilty in federal court on Wednesday, June 7 for defrauding the North Carolina Medicaid Program of over $400,000, according to the U.S. Department of Justice.

Korzelius, 46, of Tryon, appeared before U.S. Magistrate Judge Dennis L. Howell and pleaded guilty to one count of health care fraud.

Korzelius owns Western Carolina Counseling Services as well as being a school counselor at Tryon Elementary School.

From October 2013 to November 2016, Korzelius identified students and their siblings from Tryon Elementary and used those potential beneficiaries’ information to access their personal information, then used that information to create and submit billings for individual psychotherapy services, when, in fact, no such services were provided, according to court documents.

“The defendant abused his position as an employee of the Polk County school system to access and misuse children’s identities to enrich himself, with funds stolen from a government funded program,” said U.S. Attorney Jill Westmoreland Rose. “His actions are reprehensible and he will be punished for them.”

Court documents showed that Korzelius had minimal documentation to support his billings for services he fraudulently represented, according to a press release from the U.S. Department of Justice. The release also states that many recipients who Korzelius billed for indicated they never sought or received services from either Korzelius or Western Carolina Counseling Services.

“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,” states the release.

“Using children’s personal information to defraud taxpayer is unconscionable,” said North Carolina Attorney General Josh Stein. “I will not tolerate Medicaid fraud, and my office will continue to work with the federal government to bring justice to anyone who is stealing from taxpayers.”

Korzelius was released on bond Wednesday.

The health care fraud charge carries a maximum prison term of 10 years and a $250,000 fine, according to the U.S. Department of Justice.

A sentencing date for Korzelius has not yet been set.

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 through the MID’s participation in the Western District’s joint Health Care Task Force. The task force is made up of federal and state investigators who work in conjunction with Civil and Criminal Assistant United States Attorneys, who are dedicated to identifying and prosecuting those who defraud the health care system and reducing the potential for health care fraud in the future, states the release.

The Bulletin reached out to the Polk County School system and to Korzelius for comment. Look for an update to this article in Friday’s paper and online.

UPDATE: June 8, 2017 11:36 a.m.

The Bulletin received a statement early Thursday morning from Aaron Greene, superintendent of the Polk County School system.

“Polk County Schools learned yesterday that Joseph Korzelius, a former school counselor at Tryon Elementary School, plead guilty to health care fraud. In addition to being a school counselor, Korzelius owned and operated his own counseling practice, Western Carolina Counseling Services. Western Carolina Counseling Services is not affiliated in any way with Polk County Schools,” said Aaron Greene.

“Based on the information provided by the Department of Justice, Korzelius sought Medicaid billing reimbursements through his personal counseling business for mental health services he never provided to clients.

“Mr. Korzelius is no longer a Polk County Schools employee. Until yesterday, Polk County Schools was not aware that Korzelius used any student information to submit reimbursement claims for his personal practice.

“Polk County Schools is requesting information from the Department of Justice to determine whether there is any direct impact on the District or our students as a result of Mr. Korzelius’s actions.”

Korzelius was employed with Polk County Schools from Aug. 24, 2007 through June 7, 2017.

The Bulletin also reached out to Korzelius who said he could not comment.