A Pennsylvania man became the 10th person to plead guilty as part of a federal investigation into a prescription drug scam that’s cost New Jersey’s public employee health care plans millions of dollars through fraud.
Pharmaceutical sales representative Michael Neopolitan, 49, of Willow Grove, admitted Friday he defrauded New Jersey state health benefits programs and other insurers out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions.
Neopolitan appeared before U.S. District Judge Robert B. Kugler in U.S. District Court in Camden on Friday morning to plead guilty to conspiracy to commit health care fraud.
In his plea, Neopolitan admitted recruiting employees covered under the state health benefits plans, getting their insurance information and filling out prescriptions for compounded medications, selecting the most expensive options “without regard to their medical necessity.”
For most public employees, New Jersey’s State Health Benefits Plan is some of the best healt…
He would then have doctors sign the prescriptions without evaluating the patients and fax the prescriptions to the compounding pharmacy, which would fill the order and bill the state’s pharmacy benefits manager.
Neopolitan must forfeit $198,671 and pay $762,519 in restitution, according to the plea deal. He faces a maximum of 10 years in prison and a $250,000 fine when sentenced Jan. 12.
More than $25 million in fraudulent prescriptions were paid out in the scam in a year, prosecutors said.
Nine other conspirators have pleaded guilty, including four South Jersey men. Matthew Tedesco, 42, a Linwood pharmaceutical representative; Michael Pepper, 45, an Atlantic City firefighter; Richard Zappala, 45, a pharmaceutical rep from Northfield; and John Gaffney, a physician in Margate, have pleaded guilty to their roles in the scheme and await sentencing.
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Many of those pleading so far have been pharmaceutical sales reps or employees, including Robert Bessey, 43, of Philadelphia; Steven Robert Urbanski, 37, of Marlton; Thomas Hodnett, 41, of Vorhees; Judd Holt, 42, of Marlton; and George Gavras, 36, of Moorestown.
Prosecutors have said the illegal scheme centers on the billing of the state’s public health benefits plan for compounded drugs. Drug compounding is a process in which a pharmacist mixes ingredients into a custom drug. While the process is legal, it’s not regulated by the U.S. Food and Drug Administration. The drug mixtures are expensive, with a tube of cream costing thousands of dollars each. Recent federal prosecutions have uncovered massive abuse in similar investigations across the country.
As part of the local investigation, federal subpoenas were issued in June to Atlantic City, Ventnor and Margate seeking information about potential fraud targeting public-employee prescription benefits.
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A separate investigation led by Atlantic County Prosecutor Damon G. Tyner also is focusing on public-employee prescription fraud, including compounded medications.
Prosecutors alleged that from January 2015 to April 2016, Neopolitan “recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy.”
The pharmacy was not identified in the information, which referred only to the “Compounding Pharmacy.”
Acting U.S. Attorney William E. Fitzpatrick credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge Timothy Gallagher in Newark; IRS–Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen in Newark; and the U.S. Department of Labor, Office of Inspector General, under the direction of Special Agent in Charge Michael C. Mikulka in New York, with the investigation leading to the guilty plea. He also thanked the Division of Pensions and Financial Transactions in the state Attorney General’s Office, under the direction of Attorney General Christopher Porrino and Division Chief Eileen Schlindwein Den Bleyker, for its assistance in the investigation.