Margate Mayor Michael Becker said he was “very sad” to hear two of his city’s firefighters, John and Thomas Sher, were among seven people charged Friday in the FBI’s ongoing investigation into prescription fraud by public employees in South Jersey.
The Shers’ brother Michael, a former Margate firefighter, pleaded guilty in December. John and Thomas Sher are suspended without pay from the Fire Department.
“It hurts for everybody. It was a very sad day in Margate on Friday,” Becker said. “I hope the taxpayers and citizens of Margate realize that this is an isolated incident and we move on.”
The seven people most recently charged are scheduled to appear in federal court Thursday in Camden.
Six of the seven were walked out of the Northfield FBI field office in handcuffs. They live in Northfield, Absecon and Margate, and are charged with taking part in a scheme that defrauded the state to the tune of more than $50 million. All seven pleaded not guilty Friday.
The arrests add a total of 50 new charges to a case that has been developing since 2017.
Prosecutors allege the couple identified as the ringleaders of the scheme — William and Sara Hickman, of Northfield — recruited fellow public employees to get unnecessary prescriptions for compounded medications, specialty medications that can cost up to thousands of dollars a month and were covered by taxpayer-funded public workers’ health insurance programs.
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Prosecutors also allege a Louisiana pharmacy gave a kickback to the Hickmans for sending prescriptions their way to the tune of $26 million, some of which they say was distributed to their co-defendants for their help.
Northfield Mayor Erland Chau, who teaches science at Mainland Regional High School in Linwood, said the reason workers get involved in fraud schemes is straightforward.
“It’s very simple,” Chau said. “It’s greed.”
Being a public employee himself, Chau said he can see how the investigation, to this point, has shown involvement from so many people — 30, as of Friday — in the scheme.
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“I can see how it spread through these various different factions that all have a common entity that shared the same type of insurance,” he said.
Assemblyman Vince Mazzeo, D-Atlantic, also attributed the actions to greed.
“To me, greed played a big part in this situation, and those doctors and professionals we put trust in, if convicted, let us down and should be held accountable,” Mazzeo said.
“The prescription drug business has enough actors trying to profit off the public. If found guilty, then I’m glad the FBI has stepped in to take just a few of the bad actors out of the equation,” said Mazzeo’s colleague, Assemblyman John Armato, D-Atlantic.
But Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association, attributed the scheme to opportunity more than greed.
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The vulnerability in the system lies in the number of claims that come in and the fact that they are processed online. Until patterns emerge, he said, the presumption is that claims are valid.
“It’s not until the payers do some data analytics on what they’re paying out and start to see patterns and anomalies that they start to figure out, ‘Well, wait a minute, there’s something going on here,’” Saccoccio said. “And then they start to take a closer look at it.”
More than 23 local residents have pleaded guilty thus far in the investigation, and as many as 200 people are thought to have some involvement. According to court documents, the scheme targeted teachers, firefighters, police officers, state troopers and other public employees due to their generous coverage under the state health benefits plans.
Linwood Mayor Richard DePamphilis said the fraud case is not an example of the need for more laws, but of the need to prosecute when the ones on the books are broken.
“It’s not a good thing to have too many laws,” he said, “and if we don’t have laws in place good enough to stop this kind of sort of thing happening, it’s hard to imagine any more would help, as far as I’m concerned.”