A Galloway commercial construction estimator has admitted to his role in a multi-million dollar scheme to defraud public health benefit programs.
Timothy Frazier, 42, pleaded guilty Friday to being a recruiter for the conspiracy, persuading those with the these benefits to get expensive and medically unnecessary compounded medications from an out-of-state pharmacy, acting U.S. Attorney William Fitzpatrick and state Attorney General Christopher Porrino said.
Frazier was part of the scheme from January 2015 through April 2016, taking advantage of the fact 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 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.
He has agreed to forfeit the $145,425 he made from his role. He also must pay restitution of at least $801,119 — what he is said to have cost the programs.
An entity referred to in the information 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, 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.
Frazier and others recruited public employees and other individuals covered by the Pharmacy Benefits Administrator to fraudulently obtain compounded medications from the Compounding Pharmacy, which were not medically necessary. Frazier secured insurance information from the individuals and passed it along to a conspirator, who had a doctor sign prescriptions without examining the individuals. The prescriptions were faxed to the Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.
The pharmacy then paid one of Frazier’s conspirators a percentage of each prescription filled and paid by the Pharmacy Benefits Administrator, which was then distributed to Frazier and other members of the conspiracy. Frazier paid recruiters under him and paid individuals with insurance coverage to reward them for obtaining prescriptions.
Frazier 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 is scheduled for March 29, 2017.
Eleven other conspirators – Matthew Tedesco, Robert Bessey, Michael Pepper, Thomas Hodnett, Steven Urbanski, John Gaffney, Judd Holt, George Gavras, Richard Zappala, Michael Neopolitan, and Andrew Gerstel – have pleaded guilty from August through November 2017 and await sentencing.
