Former Primary Health Network execs accused in $2M fraud scheme
A federal grand jury has handed up indictments accusing former executives and two others of taking part in a series of schemes to defraud the Sharon-based non-profit Primary Health Network out of more than $2,000,000 through sham contracts, inflated bids, and kickbacks.
The 17-count indictment issued in Pittsburgh names former Primary Health Network CEO and CFO, 55-year-old Drew Pierce of West Middlesex; former PHN facilities director, 56-year-old Mark Marriott of Sharpsville; another former PHN CEO, 70-year-old John Laeng of West Middlesex, as well as two Masury, Ohio men, 60-year old John O’Brien, and 58-year-old Christopher O’Brien.
The Primary Health Network, a private, non-profit organization that works with local communities to develop and implement a Community Health Center, boasts more than 150 physicians, dentists, physician assistants, certified nurse practitioners, and other health professionals, serving tens of thousands of patients in Pennsylvania.
According to the Indictment, the alleged fraud took place from 2011 through 2019 using among other entities, Topcoat Plus, a company described by investigators as a “purported” management firm owned by Marriott, Pierce, and Laeng.
Other companies that the government says were also operated by the three were allegedly involved in a plot involving submitting invoices to PHN for work that was never performed, or agreeing to pay inflated amounts for work that, if completed at all, would be performed by other companies at a lower cost.
John O’Brien, who controlled Masury-based telecommunications company Tele-Data, allegedly submitted an inflated bid to PHN for CCTV and data wiring installation at a health center in Lewiston, Pennsylvania. Marriott, Pierce, and Laeng would pay O’Brien’s company less than bid and O’Brien would pay kickbacks to Marriott, according to the indictment.
Christopher O’Brien, who owned Excel Construction of Masury, would allegedly enrich himself as well as Pierce and Marriott by charging PHN inflated amounts for general contracting.
In addition, the indictment alleges that Marriott and Pierce used PHN funds for personal expenses, including the installation of windows at Pierce’s private home, and also allegedly used PHN employees on company time to perform labor at Pierce’s and Marriott’s homes.
Among the charges laid out in the 17-count indictment are Conspiracy to Commit Mail/Wire Fraud, Wire Fraud, Conspiracy to Commit Money Laundering, and Mail Fraud.
“Defrauding a non-profit medical organization not only harms that organization, but it also does great indirect harm to the patients these organizations are created to help,” said Acting United States Attorney Troy Rivetti.
On each of the mail fraud, wire fraud, and conspiracy to commit mail/wire fraud counts, the law provides for a maximum total sentence of not more than 20 years in prison and a fine of not more than $250,000.
“Today’s indictment describes elaborate and egregious schemes to steal money from a non-profit organization,” said FBI Pittsburgh Special Agent in Charge Mike Nordwall.
As of Friday, Pierce, Laeng, and both O'Briens had pleaded "not guilty" to the charges.