Two pharmaceutical reps plead guilty in ongoing health care fraud probe

Two pharmaceutical representatives are the latest to plead guilty in an ongoing health care fraud case that targeted public workers in several Atlantic County towns.
Judd Holt, 42, of Marlton, and George Gavras, 36, of Moorestown, admitted in Camden District Court that they recruited individuals to obtain expensive and medically unnecessary compounded medications from an out-of-state pharmacy.
They learned that state employees like teachers, firefighters, police officers and state troopers had insurance coverage that covered these compounds, reimbursing a month’s supply for thousands of dollars.
Referred to only as the Pharmacy Benefits Administrator, the provider would pay prescription drug claims and then bill the state of New Jersey for the amount paid.
The pharmacy would then pay one of the pair’s conspirators a percentage of each prescription, which then was distributed to other members of the conspiracy, according to the charging documents.
Once they had recruited an employee covered by the Pharmacy Benefits Administrator, Holt and Gavras would obtain the employee’s insurance information and fill out a Compounding Pharmacy prescription form. They would select the compounded medications that paid the most without regard to their medical necessity.
Holt and Gavras would then get the prescriptions signed by doctors and other qualified health professionals who never saw the patients or evaluated whether the patients had a medical necessity for the compounded medication.
One of those doctors was John Gaffney, a Margate physician who pleaded guilty last week.
More than $50 million was paid by the administration to the “Compounding Pharmacy,” according to the information.
Holt must forfeit $95,574.49 in criminal proceeds he received for his role in the scheme and pay restitution of at least $769,762.53, under the plea agreement. Gavras agreed to forfeit $204,002.02 and pay restitution of at least $679,368.53.
Each defendant faces a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for both defendants is scheduled for Jan. 5.
Six other conspirators already pleaded guilty, including former Atlantic City Firefighter Michael Pepper, the first public employee to plead.