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Charles J. Olson / for the press//  

Mainland’s Destin Lasco competes during his team’s victory over Scotch Plains-Fanwood for the state championship on Saturday, February 23, 2019. Photo/Charles J. Olson

Seven plead not guilty in prescription fraud case

Two Margate firefighters, a Ventnor police officer and a co-owner of Tony’s Baltimore Grill in Atlantic City were among seven arrested Friday by federal agents in an ongoing $50 million compounding medication fraud case.

The accused surrendered to FBI agents at the Northfield office early Friday morning. The defendants left the office in handcuffs, each accompanied by a federal agent, who drove them to U.S. District Court in Camden. Meanwhile, a 50-count indictment unsealed Friday revealed the structure of the local criminal organization authorities allege cheated taxpayer-funded public workers’ health insurance programs out of more than $50 million.

The alleged local ringleaders, who recruited a network of people to submit fraudulent claims for medically unnecessary prescriptions, were identified as Northfield residents William Hickman, 42, a pharmaceutical sales representative, and his wife, Sara, 42.

According to the indictment, the company formed by Sara Hickman, Boardwalk Medical LLC, received roughly $26 million in kickbacks for its role, some of which it distributed to others in the enterprise for their services as recruiters.


Also arrested and charged Friday were:

Brian Pugh, 41, of Absecon, co-owner of Tony’s Baltimore Grill and owner of BP Med 1 LLC

Thomas Schallus, 42, a Ventnor police officer, who was allegedly recruited by Pugh

Christopher Broccoli, 47, of West Deptford, Gloucester County, a Camden firefighter

Thomas Sher, 46, of Northfield, and John Sher, 37, of Margate. Both men, Margate firefighters, were allegedly recruited by their brother Michael Sher, another Margate firefighter. Michael Sher pleaded guilty in the case earlier.

The seven join a total of about 30 people charged in the case since August 2017. Most are from Atlantic County, and the list includes teachers, firefighters, police officers, state troopers and other public employees along with a doctor and pharmaceutical representatives.

According to the indictment, the Hickmans allegedly recruited Pugh, who is also accused of conspiracy to commit money laundering and individual acts of money laundering.

Hickman also allegedly recruited Michael Sher, founder of MBC Distributions LLC, who then recruited his two brothers.

All seven pleaded not guilty Friday before U.S. Magistrate Judge Ann Marie Donio in Camden. The judge set bail at $100,000 on William Hickman and issued travel restrictions on him, as he is considered a flight risk.

According to the indictment, Sara Hickman established Boardwalk Medical in her name to hide her husband’s involvement. The company was used to work with an unnamed Louisiana compounding pharmacy to cheat the New Jersey State Health Benefits Program and the School Employees Health Benefits Program, authorities said.

Sara Hickman allegedly signed a contract as president of Boardwalk Medical with the compounding pharmacy, giving her company a percentage of the amount the pharmacy received from the pharmacy benefits administrator, which paid claims for the New Jersey public workers health insurance programs.

On Friday afternoon, the defendants were led one by one into the tight federal courtroom in Camden with chains around their waists, their hands cuffed, while family members watched from the back.

A timeline of prescription fraud in South Jersey

Sara Hickman’s attorney, Lee Vartan, complained about press being present as the defendants were led out of the FBI office in Northfield in handcuffs early Friday, calling the process “wholly inappropriate.”

“That jeopardizes not only her good reputation,” Vartan said, “but our ability (to fairly defend her).”

“We do not know who tipped off the press to being there,” countered Assistant U.S. Attorney R. David Walk.

All seven were all charged with conspiracy to commit health care fraud and wire fraud and with individual acts of health care fraud and wire fraud.

The Sher brothers are only allowed to meet if there is one parent present and they do not discuss the case, Donio said. A fourth, unnamed brother is also included in the rule because he is considered a possible witness.

As the two attorneys deliberated, the Sher brothers’ mother cried in the back of the room.

All defendants must turn in their passports by noon Monday and must abstain from excessive drinking. John Sher is prohibited from drinking any alcohol and is subject to mental health treatment and drug testing and treatment as part of pretrial arrangements. Broccoli must also submit to mental health treatment.

Pugh’s attorney, Michael Baldassare, said the U.S. Attorney’s Office “smears” Pugh’s name. Pugh co-owns Tony’s Baltimore Grill.

“He is a well-respected local businessman, and he is presumed innocent. After a two-year, multimillion-dollar failure to find any evidence against the big corporate players, the prosecutors are trying to bully police officers, teachers and hard-working local business people,” Baldassare said. “That’s why they do the cheap tactic of a perp walk. This is very troubling, and it will not stand.”

Margate Mayor Michael Becker said the process for indicted public employees means they are suspended without pay.

“It’s a sad day in Margate, but we have a plan in place to ensure public safety,” Becker said.

Schallus, an acting sergeant with the Ventnor Police Department, was suspended from the department without pay effective Thursday, police Chief Doug Biagi confirmed.

A warrant used to search Dr. James Kauffman’s Egg Harbor Township medical practice named Boardwalk Medical, a suspected shell company, as the local company that split the profits after Kauffman wrote medically unnecessary prescriptions to a company in Louisiana. Kauffman was charged in his wife April’s 2012 murder and with leading an opioid ring with the Pagans motorcycle gang. He died in jail before his trial could be held. Retired Pagans member Ferdinand Augello, also charged in the murder plot and drug ring, was convicted in October and sentenced to life in prison.

News of the massive fraud ring first surfaced in July 2017 after federal authorities subpoenaed Margate, Ventnor and Atlantic City requesting information about employee health benefits.

Recruiters allegedly offered the public employees hundreds of dollars per month to agree to obtain prescription compounded medications without any examination by a medical professional.

According to the U.S. Attorney’s Office, the defendants recruited individuals from July 2014 to April 2016 asking them to get expensive and medically unnecessary compound medications from the Louisiana pharmacy.

Officials said the Hickmans then had Pugh and other conspirators recruit others, mainly public employees, whose medical benefits covered the expensive compounding medications and drugs.

William Hickman paid Dr. John Gaffney, of Margate, to reward him for signing prescriptions without examining the patients, according to the indictment. Gaffney previously pleaded guilty to conspiracy to commit health care fraud and admitted taking payments and signing prescriptions for patients he did not see, officials said.

Cedarville man gets life sentence in 2016 murder of wife

BRIDGETON — Tara O’Shea-Watson had a restraining order against her husband and planned to leave him before he stabbed her dozens of times, killing her in front of their 12-year-old son, prosecutors said Friday during his sentencing.

“She was ready to start a new life away from the abuse of the defendant,” Assistant Prosecutor Charles Wettstein said. “But the defendant was not ready to release control, and he exercised the ultimate control possible and took Tara away from her friends, from her relatives, from her mother and her children. The tables have turned, and the defendant has lost control.”

Jeremiah E. Monell, 34, of Cedarville in Lawrence Township, was sentenced to life without parole in a maximum security prison for the December 2016 murder of 35-year-old O’Shea-Watson.

Monell’s public defender, Nathan Perry, said he thought “emotionally and mentally there’s some underlying disturbance” that Monell would be able to get treatment for in the state system.

“In my conversations with Mr. Monell, I know that he is very contrite, remorseful,” Perry said. “There’s no way to un-ring the bell; there’s no way to go back in time, Judge, but if we could do that, I think that he would pursue a decidedly different course.”

Monell, shackled in an orange Cumberland County jail jumpsuit, looked down or at the judge during the half-hour appearance, attempting to hold in several burps that punctuated the silences between victim impact statements and the judge’s decision.

A jury found Monell guilty of the murder and weapons offenses after a two-week trial in January in Cumberland County Superior Court.

Candlelight vigil to honor Tara O'Shea-Watson

During the trial, prosecutors argued Monell stabbed O’Shea-Watson to death in her Commercial Township home in front of the estranged couple’s 12-year-old son before evading police for two weeks. State Police finally found him in Folsom, Atlantic County.

The medical examiner testified that O’Shea-Watson “suffered nearly 90 sharp-force injury wounds.” Investigators said she was stabbed all over her throat, chest and stomach before being covered in a blanket decorated with the two princesses from Disney’s “Frozen”.

Before the sentence was handed down Friday, a few of the more than 20 people in the courtroom gallery read victim impact statements, including O’Shea-Watson’s mother and son. They stood behind a picture of Tara that was propped up on the prosecutor’s desk.

Emily O’Shea, Tara’s mother, addressed Monell directly, telling him he “destroyed many lives without a care in the world.”

“Thank God you are going where you can never harm another person,” she said. “You are finally going to answer for all the evil, lying, cheating, stealing, cruel and abusive things you have done, and you will still have to answer to God for your crimes and broken commandments.”

Jeremiah W. Monell, son of O’Shea-Watson and Monell, did not read his statement out loud, but stood next to a victim advocate while she read from a piece of paper.

He described his mother as “honest, loyal and protective,” and added he missed her laugh and smile the most.

“Sometimes I have to wake up and remember that my mother isn’t here,” the court advocate read. “And so, I think you are right where you belong.”

Monell’s father also made a statement in court, during which he asked for his son’s forgiveness.

“You didn’t always see a godly example in me as a dad and as a husband, so I ask you to forgive me for that and know that me and Mom love you,” he said.

Monell only nodded, looking at his father in fleeting glances.

There was a restraining order against Monell at the time of the murder, Superior Court Judge Cristen D’Arrigo said during his decision, and explained that domestic violence cases are all too common.

“Often, they are initially low-level offences, but it is the specter of a case like this that haunts every judge’s mind every time when these cases come up before us,” D’Arrigo said. “It is the ultimate bad outcome.”

When D’Arrigo gave Monell the opportunity to address the court, Monell said, “I came here today to be sentenced, and I’m ready for that.”

Principle Academy Charter School fires 9 employees amid restructuring

EGG HARBOR TOWNSHIP — Nine Principle Academy Charter School employees, including four teachers, were terminated Friday by its Board of Trustees over the objections of about 100 parents, faculty, staff and children.

Parent after parent spoke during the public comment portion of the meeting and asked the board not to reduce staff during the middle of the school year and before state testing takes place.

Erwin Ashworth, 24, of Pleasantville, attended the meeting with his son Jayceon, whose kindergarten teacher was one of the employees terminated Friday. Jayceon was crying and had to leave the cafeteria before the vote was taken.

“Since he has been here, he doesn’t want to miss a day,” said Ashworth, who added the teacher firings would cause him to put his son in a different school. “I came straight from work. You have got to be supportive.”

The nine terminations and reductions of three staff members from full-time to part-time, including the Spanish and art teachers, were approved unanimously by three board members.

The trustees accepted the resignation of Jennifer Barr from the board at the start of the meeting before the vote was taken, which brought the body down to four members. Board member Darryl G. Greer was absent.

Amid litigation, renewal of its charter and a reduction in staff, a new management company made up of four former board members, including the school’s founder, has taken over Principle Academy.

The school’s founder and former board President Peter Caporilli defended the school and the changes, stating it was a normal transition, and said it was tied to a lawsuit the district is facing from its former director.

“In order to protect the board and the school and the charter, it was decided that we come off the board and not put the school in the crosshairs,” Caporilli said.

At a meeting Feb. 9, four trustees resigned, including Caporilli. The following week, the board approved a contract with a new management company, Polymath Achievement Charters, comprised of the members who resigned.

According to a copy of the agreement provided to The Press, the management company will oversee operations, offer administrative support and optimize student educational outcomes through Feb. 15, 2021. The company will receive 13 percent of the board’s total funding each year, paid monthly, in the first year of the contract.

“We looked aggressively for another management company, and none of them fit the model that we had created at our school,” Caporilli said.

Caporilli said the change-up was related to the school’s charter renewal, a process that takes place every five years, which it received Feb. 1 from the New Jersey Department of Education.

“Some of the things that were written in our renewal letter made us believe that we were looking for more sustained organizational capacity,” Caporilli said in a voicemail.

Caporilli said the Department of Education renewed the district’s charter, but not its expansion to grades 7-11 and an increase in enrollment to 1,025 students.

The letter states that although the district received a preliminary “Tier 1” rank, which is the highest a charter school can receive, the school’s organization changes over the past year cast doubt on its ability to increase enrollment.

The school, which opened in 2015 as International Academy of Atlantic City Charter School, has undergone several changes in the past few years.

Over the summer, it parted ways with its curriculum provider and management company, SABIS International, and its school director amid several lawsuits, leading to the name change.

One of the civil lawsuits was filed by former school chief Natakie Chestnut alleging retaliation, wrongful termination and defamation against both SABIS employees and the International Academy trustees, which is still pending.

Caporilli said he could not comment on the suit.

The charter school has been at its current location in the Cardiff Power Center since 2017 after moving from a church in Pleasantville.

It started out with students in kindergarten through third grade and has expanded to serve up to 450 students through sixth grade this year.

Caporilli said enrollment never reached above 401 students, however, which necessitated the reduction in force Friday.

The layoffs are complicated by the fact that the district hired Atlantic City Councilman Marty Small as its athletic director at a salary of $90,000 this school year. And in November, the board approved a contract for $75,000 for an “outdoor learning area” awarded to Tidewater Workshop, owned by Caporilli. He abstained from the vote.

Caporilli said Small’s appointment was an effort to differentiate the school from other charters by offering athletics. Small runs a basketball program for third- through sixth-graders there.

Small said his qualifications include running the Atlantic City Boys & Girls Club for 4½ years and the after-school program at Atlantic City’s elementary schools for 11 years.

“My heart goes out to the people who have been a part of the reduction in force,” Small said. “I’m grateful for the opportunity that the board gave me to serve these children. I look forward to carrying out the vision of the board and the management company.”

He added he had nothing to do with the recent changes.

“It (the terminations) was a board decision and a management company decision,” Small said. “I’m here to do a job on behalf of the school for the children as I have done my whole entire career.”

Caporilli said the contract to his company was done fairly through the public bidding process and that the outdoor learning area was a requirement of the school’s lease agreement for its building.

In addition to the board changes, school Director Ken Silver announced his resignation last week in a message to parents on the student web portal ClassDojo.

Silver is a former interim principal at William Davies Middle School in Hamilton Township. He could not be reached for additional comment.

The school’s website has listed Alvaro Cores as the acting school director. Cores could not be reached for comment.

Small said his qualifications for his job include running for four and half years the Atlantic City Boys & Girls Club and for 11 years, he ran the after school program at Atlantic City’s elementary schools.