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Charles J. Olson 

Vineland's Robert Miller hurdles to a first place finish during the Buena Relays on Saturday, April 6, 2019. Photo/Charles J. Olson

Residents charged in ongoing fraud case were hiding in plain sight

Two years ago, William Hickman, a dedicated volunteer in Northfield youth baseball, took a step back from the league.

He told other coaches he needed to “step aside for the betterment of the league,” former Northfield Little League President Jason Yard said, without providing any more explanation.

On March 15, Hickman was led out of the FBI field office in Northfield in handcuffs, his head down. His wife, Sara, followed soon after. The two were charged by prosecutors as the alleged ringleaders in an ongoing $50 million prescription fraud scheme running from July 2014 to April 2016.

The Hickmans are accused of contributing to a pyramid of fraud in which public employees were recruited to secure prescriptions for expensive and medically unnecessary medications in exchange for kickbacks.

Many of the 30 South Jersey residents charged in the case were active, contributing members of their communities. They held public jobs. They coached youth sports. They were siblings, spouses, friends. And their reputations as pillars of the community seem to have withstood the allegations.

Who's been charged in prescription fraud case?

What allows white-collar crime to take root, and to proliferate, in an otherwise unassuming environment?

The Sher brothers, three of whom were charged in the case, were not easily pegged as would-be criminals, and those who knew them were caught off guard by investigators’ allegations.

“It’s quite a shock to see somebody that you hang out with a couple times a month, to know that they were involved in something like this, and it’s disappointing,” Yard said. “From our organization’s perspective, they are adults, they made a decision, they have to face any consequences that they are faced with.”

Even friends were thrown off.

“I happen to be very close with a lot of these people on a personal standpoint,” said Chuck Hackett, the current president of Northfield Little League. “(They are) good people. Sounds like they just got caught up in a bad situation.”

J.C. Lore, a clinical professor of law at Rutgers Law School in Camden, said the status of white-collar criminals can buffer suspicion.

“To a certain extent, with white-collar crimes, sometimes they are relatively successful people and they are in positions of trust,” Lore said. “They are given a lot of trust, which makes their crime not so easy to detect, and they, generally, have earned that position they are in through some type of hard work and success, and it sometimes makes them feel invincible.”

The Sher brothers, in particular, were very active in their community, including coaching youth sports. Yard said they would be the first people to respond to a call for volunteers and the last people on the field after an event.

“Outside of the crime, which is a white-collar crime and is horrible, however you want to portray it, they’re actually good people when it comes to the children,” Yard said. “They’re very good people.”

Hickman, Thomas Schallus, Thomas Sher and Richard Zappala were all coaches in the league and have all been charged in the case.

“We were very surprised once the information came out regarding the whole scandal,” Yard said.

Some were specifically singled out for their community contributions.

In 2016, in his last year as president of the Family Association of Northfield, Thomas Sher was honored by the Mainland Regional Education Foundation with the Community Counts! Difference Maker Award for his work with youth athletics in the area.

“Although this is Tom’s last year as FAN president,” the pamphlet for the event states, “he will continue to lead and teach our children to become better competitors and good young people for years to come.”

Thomas Sher made about $98,000 a year as a Margate firefighter, and John Sher made more than $102,000. Schallus made just shy of $120,000 a year as a Ventnor police officer.

Lore said hubris among alleged perpetrators of white-collar crime is not uncommon.

“The thing with white-collar criminals is there’s a combination of greed and the belief that they aren’t going to get caught,” Lore said. “Frequently, they’re right. There’s not nearly as much enforcement in sort of white-collar arena than there is for street-level crimes.”

Beyond that, he said, middle-class and upper-middle-class white professionals are afforded a benefit of the doubt others are not.

“I think that’s culturally our misperception of crime. We think that crime is only driven by the inner cities or people that live in poverty,” Lore said. “That’s not true. It happens all the time in other ways. It’s just people aren’t looking as closely. It’s privilege.”

For some, the veneer of an idyllic family life provided cover.

John, Thomas and Michael Sher have been charged in the case, with Michael pleading guilty in March of last year. In addition to the three brothers, a fourth may be called as a witness in the case, officials said. The brothers, three of whom live within blocks of each other in Northfield, are grappling with their conditions of release.

At John and Thomas Sher’s arraignment March 15, John’s attorney Jerome Ballarotto argued against a bail condition barring the brothers from meeting with each other without a lawyer or parent present. He said the family is “very religious” and “very close.”

On March 27, at a hearing to again contest the condition, Michael Sher’s attorney, William Hughes, said the family had a lot of kids and relied on each other for childcare.

The prosecutor on the case, David Walk, asked why people accused of a crime should be permitted to meet with potential witnesses.

Judge Robert Kugler ruled in the family’s favor.

Those who have followed the case since the beginning, including the arrests of noted professionals like Dr. James Kauffman, will not be moved by the contrast between defendants’ personal lives and the allegations leveled against them.

Longtime defense attorney Lloyd Levenson, a former Atlantic County chief assistant prosecutor, said from a legal perspective, the size of the compounding fraud ring in South Jersey was unique. As a resident, he said it was disappointing to know how much money was stolen. But even more troubling is the rarity of someone from the area held in as high esteem in the community as Kauffman — who has been tied to the case but was not charged before his suicide in January 2018 — being involved in so many illegal activities, he said.

“It doesn’t come along that often, but certainly there are people who live their lives trying to beat the system,” Levenson said, “and not only focused on one way to beat the system but on multiple ways to beat the system. And most often they get caught.”

A timeline of prescription fraud in South Jersey

Staff Writer Claire Lowe contributed to this report.

Charles J. Olson  

Carlos Mercado, fundraising chairman of the Sgt. Dominick Pilla Middle School Dedication Committee, right, and artist George Perez, who created the portrait of Pilla, unveil the painting during dedication ceremonies of the newly named Sgt. Dominick Pilla Middle School in Vineland on Saturday, April 6, 2019. Photo/Charles J. Olson

cshaw-pressofac / COLT SHAW/Staff Writer///  

William Hickman, 42, of Northfield Charged with conspiracy to commit health care fraud and wire fraud, individual acts of health care fraud and wire fraud, conspiracy to commit money laundering, individual acts of money laundering

Craig Matthews / Staff Photographer  

Deputy Chief James Sarkos at dispatch station of ACHILLES in Atlantic City. Feb 11, 2019 (Craig Matthews / Staff Photographer)

Craig Matthews / Staff Photographer  

Joel Caplan, researcher at Rutgers University, Capt. James Sarkos and Capt. Jerry Barnhart of the Atlantic City Police Department discuss the “risk based policing” model implemented at the department during 2017. April 5, 2018 (Craig Matthews / Staff Photographer)

Atlantic City crime rooted in addicted people, abandoned homes, residents say

ATLANTIC CITY — A bright yellow backhoe sat on top of five feet of rubble in the middle of Keener Avenue in the resort’s Westside neighborhood Thursday evening. A bedroom door flapped on its hinges inside half a row home, the house’s insides exposed.

“These communities used to be thriving with families and kids,” said Indra Owens, 37, pointing to a vacant lot beside a boarded-up home stuffed with trash and couches. “What’s happening is, when these houses start becoming this, it fosters an atmosphere for crime.”

Police have been working to put the emphasis on places like vacant lots and abandoned homes via Risk Terrain Modeling, a method that analyzes crime data to compute geographical risk factors for crime in a community. 

“We like that philosophy, and we think that goes along well with our community policing policy,” Deputy Chief James Sarkos said. “Not to target people because they’re in a specific location, but to target that location itself.”

Johnson Report

For example, the city’s many convenience stores proved to be a risk factor for crime, according to the model, so the department responded by assigning officers to interact with store owners each shift, Sarkos said. They’ve done the same with vacant lots and rooming houses.

“What we found is that (officers are) getting out of their cars and going into these locations and it’s good community policing and it gives us better visibility in these areas that we need to target, that are priorities,” he said.

Joel Caplan, a Rutgers University criminal justice associate professor, and his colleague Leslie Kennedy developed Risk Terrain Modeling in 2009. Caplan said the method is working in Atlantic City to reduce crime, saying RTM has had “significant implications for reductions of crime in the areas they focused on and citywide.”

Caplan said the model is a predictive tool that looks at the relationships between the crimes that are occurring and the features in the environment — liquor stores, pawn shops, grocery stores, parking lots, fast food restaurants, parks, schools — places that could be intuitively risky and others that aren’t.

“It informs decisions about what’s attracting illegal behavior and then allows the decision-makers to come up with strategies to intervene at those locations, not by focusing on the people but by figuring out what the contexts are that attract illegal behavior and trying to change the environment to change those contexts," he said. "And that’s what Atlantic City did successfully.” 

Atlantic City's crime rate has been dropping for 26 years, according to New Jersey Municipal-County Offense & Demographic Data. The city's 2018 year-end report showed violent crime decreased by nearly 30 percent and non-violent crime decreased by nearly 32 percent from 2017.

But crime rates are not as low as state leaders would like to see, with few residents or visitors reporting a sense of safety and order, according to Jim Johnson, special counsel to Gov. Phil Murphy who wrote a report released last year that outlines recommendations for the city to move forward.

Some residents say poverty, addiction, mental health problems, abandoned homes and other squalor are working to keep the city a haven for crime.

In places that are poorer, there is more street crime, said Nathan Link, an assistant professor of criminal justice at Rutgers University–Camden.

“It doesn’t mean that any poor individual is necessarily more criminal than a rich individual,” he cautioned. “There are lots of poor people who are completely law-abiding, and there are many wealthy criminals.”

Social and historical forces have created high-poverty areas that have a lot of crime, Link said, adding the least well-off people are the ones who tend to be stuck in those types of places without jobs and, as a result, alternative — often illegal — economies spring up, creating a cycle of poverty and crime.

“It has nothing to do with the people in these areas being intrinsically bad,” Link said. “It has to do with some areas being so deeply disadvantaged that many of their residents struggle through life, and the broader community doesn’t have the capacity or resources to reduce crime.”

Owens said she isn't insensitive to the problems the addicted and sick are dealing with, but it’s “out of control."

”That itself breeds crime,” Owens said. “When you’re hungry and you want to get high and you’re in a strange place, it breeds crime. You used to be able to really pinpoint the neighborhoods where you could maybe still sleep with your door open, or unlocked. That’s nowhere now.”

YearCrime Index TotalViolent CrimeNon-Violent CrimeCrime Rate per 1,000Violent Crime Rate per 1,000Nonviolent Crime Rate per 1,000MurderRapeRobberyAggravated AssaultNonviolent BurglaryNonviolent LarcenyNonviolent Motor Vehicle TheftArson