Atlantic County Man Admits Role In Healthcare Fraud: Feds

ATLANTIC COUNTY, NJ - An Atlantic County man has admitted to submitting more than $2 million in claims for prescription drugs he didn't need as part of a larger $50 million conspiracy, authorities announced on Wednesday. Corey Sutor, 37, of Egg Harbor Township, pleaded guilty to an information charging him with conspiracy to commit health care fraud, U.S. Attorney Craig Carpenito announced.

Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient, according to documents filed in the case and statements made in court. They aren't approved by the Federal Drug Administration (FDA), but they can be prescribed by a doctor when an FDA-approved medication doesn't meet the health needs of a patient.

From May 2015 through February 2016, Sutor was among a group of conspirators who persuaded patients to buy very expensive and medically unnecessary compounded medications from an out-of-state pharmacy identified as the “Compounding Pharmacy,” according to authorities.

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, authorities said.

They also discovered 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, authorities said.

An entity referred to in the information as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, authorities said.
That program covers qualified state and local government employees, retirees, and eligible dependents, and the School Employees' Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents.

The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid, authorities said.

Sutor and conspirators working under him recruited public employees covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy without any evaluation by a medical professional that they were medically necessary, authorities said.

Sutor would get the insurance information and pass it onto another conspirator, authorities said. That person would then have a doctor sign prescriptions without examining the patients.

The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator. The pharmacy paid one of their conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Sutor and other members of the conspiracy, according to authorities.

The Pharmacy Benefits Administrator paid the Compounding Pharmacy more than $50 million for compounded medications mailed to people in New Jersey, authorities said. This includes more than $2 million for prescriptions submitted by Sutor and his cohorts.

Specifically, Sutor received $150,398 for his role in the scheme, authorities said. As part of his plea, he must forfeit the money he received directly and pay restitution of at least $2,092,791.

He faces up to 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing is scheduled for March 12.

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