7 In NJ Charged In Massive Opioid, Health Care Fraud Bust

Seven people in New Jersey and one in Philadelphia have been arrested in what the Justice Department is calling the “largest health care fraud and opioid enforcement action ever taken,” authorities announced on Thursday.

Three of those people, including an anesthesiologist, were arrested for selling over 1,100 oxycodone pills in South Jersey and Philadelphia, according to U.S. Attorney Craig Carpenito.

Two others were arrested and three others pleaded guilty, all to insurance fraud.

Anthony Pepe III, 40, of Cherry Hill; Daniel Watson, 39, of Bellmawr; and Prussia Hing, 35, of Philadelphia, were arrested on June 26, 2018 for their alleged roles in the oxycodone distribution ring. Pepe is an anesthesiologist at a hospital in Philadelphia.

It was part of a national operation that targeted over 601 people in 58 federal districts or their alleged participation in health care fraud schemes involving approximately $2 billion in false billings, authorities said. Of the 601 people targeted, more than 165 were doctors, nurses and other licensed medical professionals, the U.S. Attorney said.

Those charged include 76 doctors for their roles in prescribing and distributing opioids and other dangerous narcotics, authorities said.

Three of the eight purchases law enforcement said they saw as part of the investigation took place outside the hospital in which Pepe worked. In one instance, Pepe made the sale while wearing his work scrubs, authorities said. The sales are alleged to have taken place between January and mid-May of this year.

On the same day Pepe, Watson and Hing were arrested, two more people were arrested for their roles in a scheme to make money off chiropractic services that were never rendered.

Tiffany Marsh, 40, of West Orange, Keasam Johnson, 34, of East Orange are charged with insurance fraud in connection with the bust.

Marsh owned TJB Medical Billing Consultants LLC. Johnson was a supervisor in the New Jersey office of a large telecommunications company.

Marsh used her access to the billing software at the chiropractor offices to generate false claims for out-of-network chiropractic services that were never performed, authorities said. Marsh and Johnson had recruited other employees to make false in claims in their names. In exchange, they shared some money they made through the alleged scheme.

From June 2016 through November 2017, Marsh allegedly submitted about 800 fraudulent claims seeking about $850,000 in reimbursements. About $333,000 was paid for chiropractic services that were never rendered.

Also this week, two people admitted to their roles in separate conspiracies to attain phony compounded medication prescriptions on behalf of companies that marketed those products, officials said.

Robert Agresti, a 61-year-old doctor from Essex Falls, admitted that from November 2014 through September 2017, he prescribed medically unnecessary compounded prescriptions for a company that sold them, according to authorities.

He was paid $300 cash for every prescription he authorized, regardless of it was medically necessary, authorities said. He signed prescriptions brought to him by other people involved in the scheme without examining or speaking with the patients. Multiple health benefit programs paid more than $8.9 million as a result of Agresti’s phony prescriptions, authorities said.

Brian Catanzarite, 42, a former gym owner from Cedar Grove, pleaded guilty to his role in a similar scheme on the same day. He said he was recruited by a former gym member to become a sales representative for a company that marketed compounded medications, according to authorities.

The company received a percentage of every prescription that its sales representatives steered toward a particular pharmacy. From March 2015 to January 2017, Catanzarite admitted that he convinced state beneficiaries to obtain compounded medications regardless of their medical necessity.

In some cases, authorities said he paid an advanced nurse practitioner, introduced to him by the marketing company, or used a telemedicine service that was paid for by the company to obtain the prescriptions illegally.
Altogether, Catanzarite caused losses of at least $3.5 million and personally made over $1.1 million from the scheme, according to authorities.

The following day, Enver Kalaba, 36, a Metropolitan Transportation Authority (MTA) bus driver from Old Bridge, pleaded guilty in a similar scheme. Kalaba was recruited into the scheme by another former MTA bus driver, Christopher Frusci. Both Frusci and Kalaba acted as sales representatives of a company that marketed compounded medications. Kalaba paid MTA beneficiaries monthly cash bribes, including $100 per phony prescription.

Kalaba referred MTA beneficiaries only to telemedicine physicians who were paid by the marketing company or its affiliates. Altogether, Kalaba caused losses of $2.9 million and made $138,629 from the scheme, authorities said.

Agresti, Kalaba, Catanzarite, Marsh and Johnson each face a potential 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.

Sentencing for Agresti, Catanzarite, and Kalaba is scheduled for Oct. 30, 2018.

Pepe, Watson, and Hing each face a potential 20 years in prison and a $1 million fine. The charges and allegations against Marsh, Johnson, Pepe, Watson, and Hing are merely accusations, and they are considered innocent unless and until proven guilty.

In addition, the Department of Health and Human Services announced that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse.

Patch file photo