2 More Plead Guilty In Bucks Co. Drug-Treatment Scam

YARDLEY, PA — Two more of the 11 people charged in a Bucks County-based drug-treatment center scam have pleaded guilty in the case, prosecutors announced.

Michael Armstrong and Muhammad Hadi were charged in March 2019 for their involvement with Yardley-based Liberation Way, Pennsylvania Attorney General Josh Shapiro said.

Armstrong was Liberation Way's chief networking officer and recruited clients, tricking many into getting treatment with fraudulently obtained insurance coverage, prosecutors say. Hadi owned and operated "sober homes" for Liberation Way patients.

"As Pennsylvania was being bludgeoned by the opioid epidemic, these individuals saw an opportunity to capitalize and make money on the backs of those struggling with addiction," Shapiro said. "I’m proud of our work here today and, by shutting down this network of scam artists who preyed upon our most vulnerable, we are serving justice for the people of Pennsylvania."

Hadi’s sober homes were named Prestige Worldwide, Legacy House, and Liberation House.

Liberation Way, based in Yardley, operated facilities in Bala Cynwyd and Fort Washington, in Montgomery County. With its holding company, Liberation Behavioral Health, the company’s founding members, various employees, and investors, illegally secured and paid premiums for patients’ insurance policies so it could bill insurance companies for substandard, medically unnecessary, or sometimes non-existent treatment.

In August, Liberation Way's co-founder and former CEO, Jason Gerner, 46, of Shamong, N.J., pleaded guilty for his role in the fraud.

The charges in the case were the result of an 18-month grand jury investigation into nine businesses associated with Liberation Way. Prosecutors say the investigation unveiled "a sophisticated, multi-layered scam that took advantage of vulnerable people."

While doing so, Liberation Way became a $40 million company in less than three years, with billings to various insurance companies in excess of $100 million.

Prosecutors say patients would be directed to live at the unlicensed, company-owned "sober homes" so Liberation Way could maximize the amount of treatment time it could bill to insurance companies.

The company ran daily shuttles from the sober homes to treatment locations and patients were forced to adhere to the drivers' schedules and not free to come and go, as is typical for outpatient treatment, the AG's office said.

One location on Stump Road in North Wales was known as "the party house," prosecutors say.

There, patients encountered "unsavory or even unsafe situations where the temptation to relapse was rampant," according to prosecutors.