Toms River Sports Medicine Doctor Gets Jail Time In Bribery-Prescription Scheme

CAMDEN, NJ — A sports medicine doctor from Toms River who accepted bribes to refer patients to a compound pharmacy in Lakewood has been sentenced to one year and one day in prison, the U.S. attorney's office announced Wednesday.

James Morales, 47, of Toms River, pleaded guilty in July 2015 to taking more than $60,000 in cash bribes in return for referring pain cream prescriptions and falsifying health records on behalf of Prescriptions R Us (PRU), a compound pharmacy in Lakewood.

Morales was among 31 doctors and physician assistants who received license suspensions in March in connection with charges against them. His guilty pleas came three weeks after Morales was arrested and charged in along with three others in what authorities say was an illegal patient referral scheme that allowed them to commit health insurance fraud and maximize the payouts they received. Those charges remain pending.

Acting U.S. Attorney William Fitzpatrick said PRU was owned and operated by Vladimir Kleyman, 46, of Lakewood. As a compounding pharmacy, PRU prepared medication using different types and dosages of drugs in order to provide more personalized medications for patients. PRU supplied a topical cream for pain treatment that was made from ketamine (a Schedule III non-narcotic), lidocaine, diclofenac and other ingredients, authorities said.

Morales, who operated Shore Sports Medicine in Toms River, admitted that from February 2013 through December 2013, he accepted at least $60,000 in cash bribes from PRU in exchange for referring pain cream prescriptions.

Morales also admitted that on Dec. 19, 2013, Kleyman told Morales that the quantity of pain cream that Morales had prescribed was too high to get reimbursed by Horizon, a private health insurance plan. Kleyman asked Morales to start omitting quantity information on his prescriptions for the compounded pain cream, and Morales admitted he agreed to omit quantity information on prescriptions for patients enrolled in Horizon in order to help PRU obtain reimbursements, authorities said.

In addition to the prison term, U.S. District Judge Joseph H. Rodriguez sentenced Morales to two years of
supervised release and to pay $78,018 in restitution. The judge also entered a forfeiture order of
$90,000 and fined Morales $5,000, Fitzpatrick's office said.

Kleyman previously pleaded guilty to conspiring to pay kickbacks in exchange for prescription referrals and committing health care fraud. He was sentenced on Nov. 4, 2015, to 20 months in prison, three years of supervised release and ordered to pay restitution of $477,000.

Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation.

Patch file photo