Pharma Rep From Berkeley, Doctor Charged In $2.5M Scheme

BERKELEY, NJ — A federal grand jury returned a 16-count indictment against a pharmaceutical sales rep from Bayville and a physician who had a medical office in town for several alleged schemes. Keith Ritson and Dr. Frank Alario were accused of defrauding New Jersey state health benefits programs and other insurers out of more than $2.5 million, according to the indictment.

Ritson, of Bayville, was a pharmaceutical sales representative. Alario, a Florida resident, practiced medicine at medical offices in Bayville, Marlboro, Whiting, New York City and Florida.

The alleged conspiracies center around compound medications — specialty medications mixed by a pharmacist to meet specific medial needs of an individual patient. Ritson and Alario recruited people to obtain "very expensive and medically unnecessary" medications from a medical pharmacy: Central Rexall Drugs Inc. (Central Rexall), according to U.S. Attorney Craig Carpenito.

Hayley Taff, the CEO of Central Rexall, pleaded guilty last month to one count of conspiracy to commit health care fraud.

Ritson and Alario learned that insurance providers would reimburse certain compound prescriptions — including pain, scar, anti-fungal, and libido creams, and vitamin combinations — in the thousands of dollars for a one-month supply, according to the indictment.

They also discovered that some New Jersey state and local education employees —including teachers, police officers and state troopers — had insurance coverage for those particular compound medications, Carpenito said.

Ritson and Alario were charged with conspiracy to commit health-care fraud and fire fraud, along with individual acts of health-care and wire fraud. They were also charged with a second conspiracy to wrongfully obtain and disclose patients' individually identifiable health information.

Ritson faces additional charges for conspiring to commit money laundering and substantive counts of money laundering. Alario faces charges of making false statements on health-care matters.

In the first charged conspiracy, Ritson recruited people with certain prescription-drug benefits to receive unnecessary compound-medication prescriptions, according to authorities. Alario signed the prescriptions without examining, speaking with or establishing a relationship with patients, Carpenito said.

Alario sent a form to Central Rexall’s compliance program in which he falsely attested that he saw and spoke with patients in person, according to authorities.

They also earmarked several patients in Alario's practices who had insurance that covered expensive compound medications, Carpenito said. Alario prescribed the medications not for the patient's need but for what he and Ritson stood to gain, according to officials.

The indictment also charges Ritson and Alario with a separate scheme to wrongfully obtain and disclose individually identifiable patient health information for personal gain. As a sales representative not affiliated with Alario's medical practices, Ritson shouldn't have had access to patients' confidential information. But since only certain insurances covered the compound medications Ritson promoted, they accessed patient files to ascertain patients' insurance coverage, officials said.

If convicted, the charges carry varying penalties, including up to 20 years in prison for the health-care fraud and wire fraud conspiracy count.

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