Federal Court in Camden

Mitchell H. Cohen Building and U.S. Courthouse in Camden, where the compounding cases have been heard. 

CAMDEN — A former Atlantic County resident has admitted to defrauding the state health benefits programs out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions.

Robert Madonna, 36, pleaded guilty before U.S. District Judge Robert B. Kugler in federal court to charges of conspiracy to commit health care fraud, U.S. Attorney Craig Carpenito and New Jersey Attorney General Gurbir S. Grewal announced Thursday.

Madonna is the 20th person to plead guilty in the multimillion-dollar fraud scheme targeting the state health benefits system.

Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient.

Although compounded drugs are not approved by the Food and Drug Administration, they are properly prescribed when a physician determines an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or another ingredient.

Madonna, who now lives in Florida, was one of the owners of a company formed to market prescription compounded medications, Grewal said.

From May 2015 through February 2016, Madonna and others associated with the company persuaded individuals in New Jersey to obtain expensive and medically unnecessary compounded medications, Grewal said.

The conspirators learned that certain compound medication prescriptions — including pain, scar and anti-fungal creams, and vitamin combinations — were reimbursed for thousands of dollars for a one-month supply.

The conspirators also learned the N.J. State Health Benefits Program — which covers qualified state and local government employees, retirees and eligible dependents — and the School Employees’ Health Benefits Program — which covers qualified local education employees, retirees and eligible dependents — would cover compound medication prescriptions.

Madonna, a former Margate mortgage consultant, and his conspirators entered into an agreement under which the company they formed would receive a percentage of the amounts paid to compounding pharmacies for prescriptions secured by Madonna and his conspirators, Grewal said.

Madonna and his conspirators then recruited public employees, offered them hundreds of dollars per month, and persuaded them to agree to obtain prescription compounded medications without any examination by a medical professional that the medications were medically necessary, Grewal said.

Madonna would obtain insurance and personal information from the public employees and give that information to conspirators, Grewal said.

A doctor then would call the public employees and complete the prescription without personally examining the employees or having a prior doctor/patient relationship with them. The company would receive a percentage of the amounts paid on these fraudulent prescriptions, which Madonna and others would divide, Grewal said.

According to the information, Madonna and his conspirators caused New Jersey to pay more than $2 million in fraudulent claims for compounded medications for public employees, Grewal said.

Madonna received $179,370 in gross proceeds for his role in the scheme. As part of his plea agreement, Madonna must forfeit these criminal proceeds and pay restitution of at least $2,092,791, Grewal said.

Madonna faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense, Grewal said. Sentencing is scheduled for Feb. 5, 2019.

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Twenty years as a staff writer in the features department, specializing in entertainment and the arts at The Press of Atlantic City.

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