CAMDEN — Two Burlington County pharmaceutical representatives admitted Monday they submitted fraudulent claims for unnecessary prescriptions, defrauding more than $1.4 million from state health-insurance plans.

Judd Holt, 42, of Marlton, and George Gavras, 36, of Moorestown, pleaded guilty to separate charges of conspiracy to commit health care fraud before U.S. District Judge Robert B. Kugler.

They are the seventh and eighth people to plead guilty as the result of the sweeping federal investigation targeting abuse of state health-benefits plans through the prescribing of millions of dollars in compounded medications. Drug compounding, a process in which a pharmacist mixes ingredients into a custom drug, is legal, but the resulting drugs are expensive. Recent federal prosecutions have shown here and elsewhere they are a target for fraud.

Holt defrauded health-insurance plans of more than $769,000 and must forfeit more than $95,000. Gavras admitted to defrauding plans of more than $679,000 and must forfeit more than $204,000.

Gavras and Holt served as recruiters and persuaded people to obtain expensive, medically unnecessary medications, according to court papers.

The pair recruited public employees and other individuals covered by the “Pharmacy Benefits Administrator” to fraudulently obtain compounded medications from an unnamed compounding pharmacy without any evaluation by a medical professional that they were medically necessary. In return, the pharmacy paid one of Holt and Gavras’ conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to other members of the scheme, according to court papers.

Holt’s attorney, Rocco Cipparone, said his client made a terrible mistake.

“He is just an ordinary guy that got involved in a process that initially seemed appealing, but he became aware it had its problems,” Cipparone said. “That is why we are here today.”

Holt resigned Friday from being a drug representative, while Gavras hopes to continue as a pharmaceutical representative.

On Friday, Margate-based Dr. John Gaffney, 55, pleaded guilty to conspiracy to commit health-benefits fraud before Kugler. Gaffney admitted he signed fraudulent prescriptions for more than 200 patients, including teachers, police and firefighters, resulting in fraud of more than $24 million.

Federal authorities have been investigating health-benefits fraud in three Absecon Island municipalities — Atlantic City, Ventnor and Margate — over the past few months.

The plea agreements detail a massive prescription-fraud scheme from January 2015 to April 2016 that involved recruiting teachers, firefighters, municipal police officers and state troopers to obtain prescriptions for patients whom doctors never treated.

The prescriptions included those for compounded pain creams, scar creams, antifungal creams, libido creams and certain vitamin combinations. In exchange, the doctors would receive kickbacks from an out-of-state compounding pharmacy and pay co-conspirators.

Holt and Gavras will be sentenced Jan. 5.

CORRECTION: A previous version of this story incorrectly stated that Gaffney signed more than 200 fraudulent prescriptions. He signed fraudulent prescriptions for more than 200 patients.

Contact: 609-272-7046 Twitter @acpresshuba

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.

PLEASE BE ADVISED: Soon we will no longer integrate with Facebook for story comments. The commenting option is not going away, however, readers will need to register for a FREE site account to continue sharing their thoughts and feedback on stories. If you already have an account (i.e. current subscribers, posting in obituary guestbooks, for submitting community events), you may use that login, otherwise, you will be prompted to create a new account.

Load comments