NJ Cops and Teachers Part of $25M Benefits Scam — But Feds Not Naming Them
TRENTON — Nine people have pleaded guilty to federal charges linking them to a prescription drug scam that cost New Jersey taxpayers at least $25 million over two years.
The conspiracy involved pharmaceutical employees recruiting public school teachers, police officers, state troopers and paid firefighters while paying kickbacks to doctors and the recruiters in order to bilk the state's State Health Benefits Program for expensive drugs that the employees didn't need.
Although several sales representatives, a doctor and an Atlantic City firefighter have been named in the charges, federal prosecutors have not publicly identified any other public employees or doctors — or even said how many of them there are.
A spokesman for the U.S. Attorney's Office for New Jersey, which is prosecuting the case, said he could not comment on the case beyond what's been included in publicly available court documents.
It is not clear whether more people will be charged. The U.S. Attorney's Office says the investigation has not been closed.
A criminal complaint says pharmaceutical sales representative Richard Zappala conspired with others to recruit the state workers and doctors, who aren't named.
Zappala, a 45-year-old Northfield resident, this week became the ninth person to cop a plea in this case, pleading guilty to conspiracy to commit health care fraud.
Zappala must forfeit $1.49 million that he made off the scheme and pay restitution amounting to more than $4.3 million.
Last week, John Gaffney, 55, a Linwood resident with a doctor's practice in Margate, pleaded guilty for his alleged role in selling phony prescriptions. He must repay $25,000 in criminal proceeds and pay restitution amounting to $24.9 million.
The conspiracy involved so-called compounded medications from an out-of-state pharmacy. Compounded drugs are made by a licensed pharmacist who alters the ingredients of a medication in order to tailor it to a patient's special needs.
Such drugs are more expensive, sometimes costing thousands of dollars for a months' supply. Last year and in 2015, compounded medications filled through the State Health Benefits Program cost the state more than $50 million, officials said. The defendants were charged with scamming the state from January 2015 through April 2016.
The feds say Zappala and his conspirators recruited the public workers to obtain the medication. Zappala would fill out the prescription paperwork himself, selecting the most expensive options. The conspirators also would use doctors who did not bother to evaluate the patients to see whether they needed the drugs.
The out-of-state pharmacy, which the feds do not identify by name in public court records, paid Zappala a cut of what New Jersey paid for the drugs. The doctors also got a cut, paid by Zappala.
The public court documents and news releases by the U.S. Attorney's Office do not say whether other public workers recruited by the conspirators received any compensation for their cooperation.
The other people who have been charged and pleaded guilty:
Matthew Tedesco, 42, a pharmaceutical sales representative from Linwood, pleaded guilty last month with conspiracy to commit health care fraud. Prosecutors say he scammed the state benefits program out of $25 million by filling compounded drug prescriptions. Tedesco earned $11.17 million.
Robert Bessey, 43, of Philadelphia, pleaded guilty last month, admitting his role as a recruiter who earned $486,000.
Michael Pepper, 45, the Atlantic City firefighter, pleaded guilty last month. As a recruiter, he earned $114,000 in the scheme.
Thomas Hodnett, 41, a pharmaceutical sales representative from Voorhees, pleaded guilty last month. He received $270,000 for submitting prescriptions.
Steven Urbanski, 37, a pharmaceutical sales representative from Marlton, pleaded guilty last month. As a recruiter, he earned $114,000.
Judd Holt, 42, a pharmaceutical sales representative from Marlton, pleaded guilty last week. He earned $95,574 as a recruiter.
George Gavras, 36, a pharmaceutical sales representative from Moorestown, pleaded guilty last week. He earned $204,000 as a recruiter.