Federal Court in Camden

Mitchell H. Cohen Building and U.S. Courthouse in Camden



CAMDEN — The first of more than 20 people who have pleaded guilty for their involvement in a multimillion-dollar scheme that defrauded the state health benefits program was sentenced to two years in federal prison Tuesday.

Kristie Masucci, 37, of the Cedar Run section of Stafford Township, also received three years' probation and will have to pay about $1.8 million in restitution, Judge Robert B. Kugler ruled.

According to the U.S. Attorney’s Office, Masucci, a former pharmaceutical representative, served as a recruiter from January 2015 through February 2016, persuading individuals with state benefits to obtain medically unnecessary compounded medications from an out-of-state pharmacy.

Prosecutors have said those involved in the illegal scheme billed the state's public employee health benefits plans for medically unnecessary compounded drugs and then took the payouts from the prescription reimbursements as “kickbacks” for themselves. 

According to her plea agreement, the compounding pharmacy was paid more than $50 million for medications mailed to individuals in New Jersey, including $1.88 million for prescriptions submitted by Masucci and others.

A federal investigation has led to arrests and charges for about 30 people so far from Atlantic County and nearby since August 2017.

Kugler said Masucci and her husband combined filled out 55 fraudulent prescriptions, some of which were worth more than $10,000 each, from Dr. John Gaffney, who was also indicted in the scheme.

During the sentencing, emotions ran high in the courtroom filled with Masucci’s family and friends. Four people spoke as character witnesses for her.

Masucci, a former athlete and college graduate, broke down in tears multiple times while speaking and had to leave the courtroom at an earlier point in the sentencing after her attorney brought up her three young children, including her 5-year-old son Jacob, who she said has a serious stomach condition.

Amy Luria, Masucci's attorney, asked that Kugler not consider this first sentencing as either “a ceiling or a floor” for the other sentencings to come in the fraud scheme.

“I’m not here to send messages to other defendants who are waiting,” Kugler said.

Masucci’s attorney also objected to including the names of more than 10 others involved in the scheme in the sentencing document, arguing Masucci’s actions existed in an “entirely different universe.”

She said Masucci did not admit to conspiring with these people and did not know certain ones existed until learning of the indictments. She instead only admitted to working with Matthew Tedesco, Gaffney and several unindicted individuals.

Masucci and others targeted teachers, police officers, firefighters, state troopers and other state and municipal employees to participate in the scheme, her plea agreement originally stated.

The scheme was tiered, and all participants would receive some level of kickback from the compounding pharmacy.

Masucci’s sentencing comes more than two years after it was revealed that federal subpoenas were issued to three Absecon Island communities seeking information about potential fraud targeting public employee prescription benefits.

In August 2017, Linwood pharmaceutical representative Matthew Tedesco, 42, became the first person to plead guilty in the scheme, which netted him $11 million in profit in little more than a year.

Tedesco coached Charlie’s Chicks, part of the Jersey Shore Powder Puff League for women’s football, for which Masucci also played, Press archives show.

The most recent arrests included the alleged local ringleaders, two Margate firefighters, a Ventnor police officer and a co-owner of Tony’s Baltimore Grill in Atlantic City. All seven pleaded not guilty in March.

Masucci had faced a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

Kugler said Masucci had 14 days to file an appeal.

Staff Writers Claire Lowe and Molly Bilinski contributed to this report.

Contact: 609-272-7239

aauble@pressofac.com

Twitter @AublePressofAC

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.

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