Former Drug Sales Reps from Galloway, Linwood Sentenced in NJ Health Care Fraud Conspiracy

Federal authorities say four people who participated in a scheme to defraud New Jersey state health benefits programs and other insurers have been sentenced to prison.

43-year-old Michael Pilate of Williamstown, who was a guidance counselor with the Pleasantville public school district, and 47-year-old Tara LaMonaca of Linwood, who was a pharmaceutical sales representative, were sentenced on Wednesday to 18 months and eight months in prison, respectively.

40-year-old George Gavras of Moorestown and 43-year-old Andrew Gerstel of Galloway, who were also both pharmaceutical sales reps, will be spending the next 13 months and 12 months plus one day in prison, respectively.

All four had previously pleaded guilty to conspiracy to commit health care fraud.

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Acting U.S. Attorney Rachael Honig says,

From January 2015 through April 2016, Pilate, LaMonaca, Gavras and Gerstel, and others, served as recruiters in the conspiracy and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy. . . . The conspirators also learned that some New Jersey state and local government and education employees ... had insurance coverage for these particular compound medications. . . . The conspirators recruited public employees and other individuals covered by [a] Pharmacy Benefits Administrator to fraudulently obtain compounded medications from [a] Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid the conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to other members of the conspiracy.

According to authorities, the pharmacy benefits administrator paid the compounding pharmacy that was identified in this case over $50 million for compounded medications mailed to people in New Jersey.

As part of their plea agreements, Pilate must forfeit $392,684 in criminal proceeds and pay nearly $3.5 million in restitution, LaMonaca must forfeit almost $90,000 and pay over $523,000 in restitution, Gavras must forfeit $204,000 and pay $677,000 in restitution, and Gerstel must forfeit $184,389 in criminal proceeds and pay restitution of $483,946.