2 Doctors, 22 Others Busted In 2 Vast NJ Drug Schemes: Feds

Two doctors and 22 others were busted in two large drug schemes this week, one of which had enough heroin and fentanyl to kill at least 3,000 people.

In one case, 17 people were charged for their roles as members and associates of a New Jersey-based street gang involved in the distribution of narcotics, including heroin, fentanyl, and cocaine base, U.S. Attorney Craig Carpenito announced this week.

Nine defendants were arrested Thursday and seven were already in state custody. One defendant remains at large. Those arrested on Thursday were scheduled to have their initial appearances this weeek before U.S. Magistrate Leda Dunn Wettre in Newark federal court, according to a Carpenito release (see chart below.)

“Gang members who traffic in narcotics pump poison into New Jersey streets and put our citizens at risk of addiction and violence,” Carpenito said. “The charges announced result from the combined work of our federal, state, and local partners, and will help ensure that these defendants no longer threaten our communities with these harms and instead are held responsible for their crimes.”

In the other case, four people – including the two doctors – were scheduled to appear in court this week on charges they defrauded New Jersey state health benefits programs and other insurers of $4.5 million by submitting fraudulent claims for medically unnecessary prescriptions, U.S. Attorney Craig Carpenito announced.

A fifth individual, a physician’s assistant, has pleaded guilty to participating in the health care fraud conspiracy, according to a Carpenito release.

In the gang case, the complaint charges the defendants in three interrelated drug conspiracies involving the distribution of heroin, fentanyl, and cocaine primarily based in North Jersey, according to a U.S. Attorney's Office release.

One defendant, Tawan Grier, is additionally charged with distribution of cocaine base and heroin, and two of the defendants, Najier Boone and Davine Campbell, are charged with distribution of cocaine base, according to the release.

According to the documents filed in this case and statements made in court:

The defendants are all members and associates of the 230 Boys street gang, which operates primarily on Rosa Parks Boulevard and Godwin Avenue in Paterson and elsewhere in North Jersey, the release said.

Through numerous controlled purchases of narcotics, consensually recorded telephone calls and text messages, physical surveillance, and the analysis of telephone call detail records, law enforcement determined that from September 2018 through Oct. 1, 2019, the defendants conspired to distribute narcotics, including heroin, fentanyl, and cocaine base, the release said.

The counts of conspiracy to distribute at least 100 grams of heroin and 28 grams of cocaine base each carry a maximum penalty of 40 years in prison and a fine of at least $5 million. The counts of conspiracy to distribute heroin and fentanyl, and the distribution of heroin and cocaine base, carry a maximum of 20 years in prison and a fine of $1 million, the release said.

In the fraud case, Steven Monaco, 37, of Sewell; Daniel Oswari M.D., 48, of Bordentown; Michael Goldis D.O., of Mt. Laurel; and Aaron Jones, 25, of Willingboro, were all charged in a 33-count indictment with conspiracy to commit health care fraud and wire fraud.

Monaco, Oswari and Goldis also were each charged with individual acts of health care fraud and wire fraud, and Jones was charged with 10 false statement counts. Monaco and Oswari were charged with a conspiracy involving kickbacks for referrals for laboratory work, according to a release.

According to the indictment:

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, according to the release.

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,” the release said.

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, the release said.

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, the release said.

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, the release said.

Zappala’s sentencing is scheduled for Nov. 13, 2019.

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, the release said.

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, the release said.

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.

The indictment charges Monaco and Oswari with a second conspiracy in which Monaco caused Oswari to receive 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, the release said.

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, the release said.

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.

Here are those who were charged in the gang case: