Kauffman detention hearings

Dr. James Kauffman enters the courtroom of Judge Bernard DeLury in Atlantic County Superior Court on Jan. 18 after being charged in his wife's murder. Kauffman was later moved for his own safety to the Hudson County jail, where he was found dead in an apparent suicide, authorities said.

The former pharmaceutical representative alleged to be at the center of a $50 million health benefits fraud scheme was arrested earlier this month, but a search warrant related to the murder of April Kauffman shows investigators knew of him for several years.

William Hickman, 42, of Northfield, was arrested along with his wife, Sara, 42, and five others March 15 and charged in the federal health benefits fraud case captivating the region.

On Wednesday, two of the co-conspirators, brothers John and Michael Sher, will appear in court to amend their release conditions related to the charges.

In a signed affidavit to obtain the June 2017 search warrant used to raid James Kauffman’s medical office, investigators said Kauffman, of Linwood, was one of the doctors being paid by Hickman and his alleged shell company, Boardwalk Medical LLC, to sign prescriptions for medically unnecessary compounded medications.

A confidential informant who worked with Kauffman told the FBI in June 2017 she met William Hickman through Kauffman between 2011 and 2012 and that Hickman asked her to prescribe compounded cream medications in exchange for kickbacks.

Investigators say local veterans advocate April Kauffman, 47, held her husband’s schemes over his head so she could gain a beneficial divorce. For that, James Kauffman had her murdered in her Linwood home in 2012.

James Kauffman, 68, was charged in January 2018 with his wife’s murder but died in an apparent suicide two weeks later before the case went to trial.

According to the recent federal charges against the Hickmans, Boardwalk Medical LLC received about $26 million in kickbacks for its role between 2014 and 2016, some of which it distributed to others who served as recruiters.

The Hickmans pleaded not guilty.

William Hickman’s attorney, Samuel Moulthrop, declined to comment about his client’s involvement with Kauffman.

Since 2017, 23 South Jersey residents, including nine pharmaceutical representatives, six firefighters, four school employees, one police officer and one Margate doctor, have pleaded guilty in the compounding ring officials say involved at least 200 people.

After Kauffman’s arrest and the subsequent reveal of the health benefits scheme, Atlantic County Prosecutor Damon G. Tyner told reporters the warrant to search Kauffman’s Egg Harbor Township medical practice was partially related to the fraud, for which the prosecutor was running a separate, parallel investigation.

Atlantic County Prosecutor’s spokeswoman Donna Weaver declined to comment for this story, saying the fraud investigation is still active.

The search warrant affidavit also named the Louisiana compounding pharmacy investigators believed was at the center of the scheme, Central Rexall Drugs Inc. in Hammond, Louisiana. Central Rexall, owned by Don Fellows and his daughter, Hayley Taff, closed Dec. 30, 2016, after compounding medications for more than 120 years, filling prescriptions for patients all over the U.S., according to its website.

Taff could not be reached for comment.

The Prosecutor’s Office subpoenaed records from pharmacy benefit manager Express Scripts and found that between January 2015 and June 2016, Kauffman prescribed 750 compounded medications; more than 650 were from Central Rexall Drugs. Each charge was for more than $5,000, and there were multiple instances of a script being prescribed to multiple patients on the same day, the affidavit states.

The pharmacy was suspended by the Defense Health Agency in April 2015 for having filled faulty prescriptions for compounded drugs to patients with TRICARE, a military health insurance company, an accusation the pharmacy denies, court documents show.

Centrall Rexall has sued the DHA to have its TRICARE claims paid. The litigation is ongoing, and the pharmacy’s lawyer did not return a request for comment.

Contact: 609-272-7251 CLowe@pressofac.com Twitter @clairelowe

Staff Writer

I began covering South Jersey in 2008 after graduating from Rowan University with a degree in journalism. I joined The Press in 2015. In 2013, I was awarded a NJPA award for feature writing as a reporter for The Current of Hamilton Township.

Staff Writer

My beat is public safety, following police and crime. I started in January 2018 here at the Press covering Egg Harbor and Galloway townships. Before that, I worked at the Reading Eagle in Reading, Pa., covering crime and writing obituaries.

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