Red Bank Man Sentenced For Role In Health Insurance Scam: Feds

RED BANK, NJ - A Red Bank man was sentenced Monday in connection with a multi-state patient brokering scheme that bribed New Jersey residents suffering from drug addiction to seek out certain rehab centers in exchange for kickbacks from the treatment clinics, according to U.S. Attorney Craig Carpenito.

Peter J. Costas, 27, pleaded guilty in May before U.S. District Judge Peter G. Sheridan to one count of conspiracy to commit health care fraud. In addition to a 13-month prison term, Judge Sheridan sentenced Costas to three years of supervised release and ordered a restitution payment of $502,208.

Previous coverage: 2 More Men Admit Roles In Scam To Bribe NJ Drug Addicts: Feds

According to the U.S. Attorney’s office, Costas helped orchestrate a scheme that involved bribing individuals addicted to heroin and other substances to enter into rehabilitation centers so Costas and his conspirators could receive referral pay.

Costas worked with several marketing companies to recruit potential patients who had robust private health insurance from New Jersey and elsewhere. To convince individuals to travel to and enroll in rehabilitation when they otherwise would not have, Costas offered to bribe them as much as several thousand dollars.

Costas would then stay in touch with the New Jersey patients at the facilities and instruct them to stay long enough to generate referral payments, sometimes even directing patients to different rehabilitation facilities month after month to generate multiple referrals.

“The facilities typically paid the marketing company a fee of $5,000 to $10,000 per patient referral, and Costas and other brokers received approximately half that amount for each patient they brokered,” the U.S. Attorney’s Office said in a statement.

“During the scheme, Costas brokered dozens of patients on behalf of marketing companies around the country, and the conspiracy caused millions of dollars of losses for health insurers.”