Trenton Doctor From Bordentown Admits To Healthcare Fraud: FBI

CAMDEN, NJ — A Trenton doctor from Bordentown has admitted to defrauding New Jersey state health benefits programs and accepting kickbacks in exchange for referring laboratory work in two separate conspiracies, U.S. Attorney Craig Carpenito announced.

Dr. Daniel Oswari, 48, pleaded guilty to two counts of an indictment charging him with conspiracy to commit health care fraud and wire fraud and conspiracy to violate the Anti-Kickback Statute and the Travel Act, according to authorities.

Oswari, Steven Monaco, Michael Goldis, and Aaron Jones were charged in the conspiracies earlier this year. Charges remain pending against Monaco, Goldis and Jones, and they remain innocent unless and until proven guilty. Read more here: 2 Doctors, 22 Others Busted In 2 Vast NJ Drug Schemes: Feds

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration, they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

From January 2014 through April 2016, the conspirators recruited individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from a Louisiana pharmacy, identified in the indictment as the "Compounding Pharmacy 1," and a Pennsylvania pharmacy, identified in the indictment as "Compounding Pharmacy 2," according to documents filed in the case and statements made in court.

The conspirators learned that certain compound medication prescriptions — including pain, scar, antifungal, and libido creams, as well as vitamin combinations — were reimbursed for thousands of dollars for a one-month supply, according to authorities.

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the indictment as the "Pharmacy Benefits Administrator" provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, according to authorities.

The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the state of New Jersey or the other insurance plans for the amounts paid.

Richard Zappala, who previously pleaded guilty to conspiracy to commit health care fraud, had agreements to receive a percentage of the amount that Compounding Pharmacies 1 and 2 received for prescriptions obtained by Zappala and his associates. Zappala had Monaco and other conspirators find people who would agree to receive prescriptions for compounded medications, according to authorities.

The conspirators recruited public employees and others covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from Compounding Pharmacies 1 and 2 without any evaluation or determination by a medical professional that the medications were medically necessary, according to authorities.

The defendants paid individuals to agree to receive prescription medications from the Compounding Pharmacy. The defendants completed prescriptions for these individuals and selected the most expensive medications with the highest number of refills to obtain the highest possible insurance reimbursement, according to authorities.

The conspirators would have prescriptions signed by a doctor or medical professional who did not examine the patients or determine that the medications were medically necessary. Monaco paid kickbacks to Oswari and another medical professional to reward them for signing prescriptions, and Zappala paid Goldis for signing prescriptions, the release said. Jones, who was a medical assistant in Goldis' office, also forged Goldis' signature on other prescriptions.

Oswari also admitted to his role in a second conspiracy in which he and Monaco were charged with receiving kickbacks for referring laboratory work and signing prescriptions. Monaco, who worked for a blood and urine testing lab, arranged for his employer to hire Oswari's medical assistant as a phlebotomist, while continuing to do medical assistant work for Oswari, according to authorities.

In return for receiving the free services of an employee for over two years, Oswari referred his blood and urine samples to Monaco's employer for testing, and Monaco received a commission from the insurance payments made for tests run on those sample, according to authorities.

It was also part of this conspiracy that Monaco paid kickbacks to Oswari for writing prescriptions for compounded medications and received money from the resulting insurance payments, according to authorities.

The health care fraud and wire fraud conspiracy count to which Oswari pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense. The kickbacks conspiracy count to which Oswari also pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 23, 2020.