Edison Man Defrauded NJ Health Care Benefit Program For More Than $4.5M: Feds

EDISON, NJ — An Edison resident who worked at the New Jersey Traumatic Brain Injury Fund (TBI Fund), along with another person, admitted to defrauding a publicly funded health care benefit program, of more than $4.5 million, U.S. Attorney Philip R. Sellinger said Wednesday.

Harry Pizutelli, 64, pleaded guilty by videoconference before U.S. District Judge Zahid N. Quraishi to one count of conspiracy to commit healthcare fraud. Maritza Flores, 45, of Toms River, New Jersey, also pleaded guilty before Judge Quraishi to charges of conspiracy to commit healthcare fraud and tax evasion.

In January 2021, Pizutelli, Flores, and co-defendant C.R. Kraus were charged with conspiracy to commit healthcare fraud in connection with a scheme to defraud the TBI Fund of millions of dollars of public funds for their own personal benefit, Sellinger said. The charges against Kraus are currently pending, authorities said.

Pizutelli orchestrated the fraud to maintain and further romantic and/or sexual relationships with Flores and other conspirators, Sellinger said.

According to documents filed in this case and statements made in court, Pizutelli was the manager of the TBI Fund and was responsible for its day-to-day operation. He supervised, managed, and oversaw the process by which third-party vendors were paid for services to TBI Fund patients.

From 2009 through June 2019, Pizutelli, Kraus, Flores, and others conspired to defraud the TBI Fund by misappropriating more than $4.5 million in fraudulent vendor payments for services that were never actually provided, according to court documents.

Pizutelli distributed fraudulent vendor payments to Flores, Kraus, and others by generating and processing false invoices and internal payment vouchers. He generated these invoices and vouchers to give the appearance that Flores, Kraus, and other conspirators had provided services to eligible patients when, in fact, they had not provided any services.

More than $940,000 in fraudulent distributions went to Flores and more than $3.245 million in fraudulent distributions was given to Kraus, which they used for their own personal benefit and enrichment, Sellinger said.

Flores and Kraus also evaded income taxes by making material misstatements and omissions on their tax returns and significantly underreporting the income they had derived from the scheme.

The healthcare fraud conspiracy charge carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross receipts to the defendants or gross loss sustained by any victims, whichever is greater.

The tax evasion charge carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.

Sentencing for Pizutelli is scheduled for May 8, and for Flores, May 9.

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