Federal courthouse in Asheville
The federal courthouse in Asheville seen from its south entrance. Carolina Public Press file photo

A former Polk County Schools counselor has admitted to using student information to defraud the federal government of more than $400,000 in Medicaid reimbursements.

Joseph Frank Korzelius, 46, pleaded guilty Wednesday in federal court in Asheville to one count of health care fraud for “submitting false and fraudulent reimbursement claims” for patients who “never sought or received services from either Korzelius or Western Carolina Counseling Services,” the Tryon-based counseling service he owns, according to a press release from the U.S. Attorney’s Office.

Federal officials said Korzelius, a former Tryon Elementary School counselor, operated the scam from 2013 to 2016. He admitted to using student information to bill the Medicaid program for counseling services that he never provided. Federal officials said Korzelius submitted more than $450,000 for reimbursement and received more than $436,000 from the state.

Carolina Public Press has found that the North Carolina Secretary of State’s office doesn’t have a listing for a business called Western Carolina Counseling Services based in Tryon, or any record of Korzelius owning such a business. Several businesses in Western North Carolina have operated under the name “Western Carolina Counseling Services,” though none appear to have any connection to Korzelius. He is, however, a licensed counselor, according to North Carolina Department of Health and Human Services records.

Polk County Schools superintendent Dr. Aaron Greene told CPP Thursday that the school system wasn’t aware of the investigation until the U.S. Department of Justice announced its plea deal with Korzelius on Wednesday. The school system hired Korzelius in 2007 and terminated his employment when the DOJ announced his guilty plea.

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

The Polk County Schools system is hoping to gain more information from the Department of Justice about what exactly Korzelius admitted to, so that school officials can then assess whether there are additional measures that can be taken to secure student data in the future, Greene said.

“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,” Greene said in a statement. 

In Greene’s interview with CPP, the superintendent explained that his concern to protect students is paramount: “We will continue to make efforts to keep student information, and employee information, for that matter, private.”

Federal court documents show that the summons and plea agreement in the case were issued on May 31. Federal authorities have not stated when their investigation began or when they made Korzelius aware that he was the subject of their investigation and could face criminal charges. They have also not said whether any other individuals have potentially been implicated in criminal wrongdoing in the matter.

North Carolina Attorney General Josh Stein joined federal law enforcement officials in announcing the plea agreement.

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

Korzelius was released on bond following his plea hearing. Federal officials said the health care fraud charge carries a maximum penalty of 10 years in prison and a $250,000 fine. A date for the sentencing hearing has not yet been set.

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Michael Gebelein was an investigative reporter with Carolina Public Press. To contact Carolina Public Press, email info@carolinapublicpress.org or call 828-774-5290.

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