Wound care operator accused of fraud by partners - wave3.com-Louisville News, Weather & Sports

Wound care operator accused of fraud by partners

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Dr. Allen Dr. Allen
Brittany Moore Brittany Moore
Michael Mueller reacts to Troubleshooter Eric Flack. Michael Mueller reacts to Troubleshooter Eric Flack.

LOUISVILLE, KY (WAVE) - Hundreds of thousands of dollars missing, a business in ruins, and emotions boil over when the WAVE 3 Troubleshooter tracks down the guy who ran it. Troubleshooter Eric Flack spent weeks digging into the records of a local medical company after doctors and former employees told him they were misled.

The Troubleshooter investigation uncovered it isn't the first time Michael Mueller has run into financial trouble. He's millions of dollars in debt. Tax liens show the internal revenue service is breathing down his neck. And he's accused of fraud by a group of doctors who used to be his former business partners.

Meanwhile former employees like Brittany Moore claim they are owed pay never received before the company shut down operations.

"You make your bed you lie in it," Moore said. "And we just want our money."

Mueller lost a lot of money since opening a wound care business in Kentucky in 2008. Wound care is an industry that focuses on the treatment of skin after injury. Documents uncovered by the WAVE 3 Troubleshooter Department reveal Mueller has been hit with judgments from Texas and Florida by medical supply companies owed hundreds of thousands of dollars. Court records also reveal local companies are suing him for tens of thousands of dollars in unpaid services. In addition, Mueller owes the Internal Revenue Service more than $1,000,000 in back payroll taxes. The IRS has now filed liens on his homes in Prospect and Goshen.

It's Mueller's home in Goshen, in the Longwood subdivision, where we tracked him down. Mueller charged out his front door, yelling at Troubleshooter Eric Flack, ending up just inches from his face.

"Oh my god your on TV," Muller's wife Terry warned her husband from behind the door.

Mueller pulled away, banging into the door and quickly moving toward Flack and his camera man.

"This is a total invasion of my privacy!" Mueller said in an angry voice.

Harrison County Hospital in Southern Indiana had no idea about Mueller's financial problems when CEO Steve Taylor signed an agreement with him in March 2011 to operate a wound care clinic in the hospitals new rehab wing. The hospital spent between $350,000-$400,000 building office space then paid Mueller's company $93,000 to operate it. Mueller shut it down twelve months later. Taylor pulled out of an interview about what happened on the advice of attorney's.

"We were making a lot of money," Dr. Allen said. He worked at the clinic and says there was no shortage of patients. In fact, he even took Mueller up on his offer to invest $30,000 dollars of his own money to help the wound care business expand.

But months later Mueller started having problems making payroll. Paychecks to doctors and nurses bounced and Moore, the office secretary, said insurance benefits employees were paying for stopped being delivered.

Mueller blamed the payroll problems on slow medicare reimbursements and according to Dr. Allen, suggested he and two other doctors who invested in the business take out a $225,000 loan with PNC Bank to ensure employees would get paid on time.

"And then the checks continued to bounce," Dr. Allen said.

After calming down, Mueller's only explanation for what happened was that "the company went bankrupt. It lost money."

In April, Mueller and his wife filed for Chapter 7 bankruptcy protection. According to court filings. they are more than $4,200,000 in debt. If their bankruptcy is approved, all of that, except what the couple owes the IRS, will be wiped away.

Dr. Allen wants to ensure that doesn't happen. He and the other doctors who invested with Mueller filed a lawsuit in Oldham County court alleging fraud. They accuse Mueller and his wife of using their position as company book keeper to take the company's revenue and that $225,000 loan and pay off personal losses.

Troubleshooter Eric Flack asked the couple where all the money from the loan went.

"Oh my god," Mueller said as he turned to walk away without answering the question.

"You have got to be kidding me," his wife could be heard saying as the door closed.

Paul Paletti, the doctors attorney, said despite the allegations of fraud he is not aware of any criminal investigation into the Mueller's nor is WAVE 3.

Paletti said his clients simply want the court to hold Mueller responsible for paying back that loan which is now in default. And right now the bank is trying to collect from the doctors.

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Copyright 2012 WAVE News. All rights reserved.

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