Keystone Behavioral Pediatrics former manager pleads guilty in federal fraud case, implicates CEO

The former managing member of Keystone Behavioral Pediatrics could be going to jail.

JACKSONVILLE, Fla. -- John Christopher Walcutt, 40, has pleaded guilty to falsifying patient progress notes of children with autism and other behavioral health issues, in response to a federal audit.

He faces a maximum term of five years in federal prison. A sentencing date has not yet been set.  

According to the plea agreement, Walcutt was the former managing member of Keystone Behavioral Pediatrics, a developmental center, where children with developmental, learning, and behavioral issues ostensibly received counseling and therapy.

In late 2011, Keystone received an audit request from the government for randomly selected patient files.

In submitting claims for reimbursement from TRICARE, which is a health care program for military personnel, Keystone certified that some of its pediatric patients had received “one-on-one” counseling and therapy.

Some of the patients were also represented to have received therapy for autism from licensed and credentialed providers.

In reality, many of the patients had not received “one-on-one” counseling or therapy from licensed and credentialed providers and, in some cases, had been left unsupervised in a small “play pen” area. Only some of the children had received therapy in a group setting. In most cases, non-credentialed employees, including graduate students, were treating the children.

Walcutt and others participated in the altering of patient files that were sent in response to the government’s audit request.

As a result of the falsified patient records, TRICARE paid Keystone approximately $600,000 for claims that otherwise would not have been reimbursable.

Walcutt told the court, "He took his direction from Keystone's Chief Executive officer." 

The C.E.O. is Dr. Katherine Falwell, his ex-wife.  Brian Bieber, her attorney, said each and every allegation about his client is 100% false.

"Dr. Falwell absolutely had no knowledge that Mr. Walcutt was committing the crimes he admitted to," said Bieber.

He said his client has been aware of the federal investigation and has cooperated with the U.S. Department of Justice.

"We have been aware of the investigation," Bieber said. "Dr. Falwell has been forthcoming and candid with respect to every inquiry that has been made to her."

Walcutt was unavailable and his Attorney Janet Johnson said she had no comment at this time.

As part of his plea agreement, he has agreed to cooperate fully with the United States in the investigation and prosecution of others.

If his cooperation is completed prior to sentencing, the government agrees to consider whether such cooperation qualifies as "substantial assistance" which could reduce his sentence.

© 2017 WTLV-TV


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