Former Ventnor Police Officer Thomas Schallus has already paid a high price for his small role at the end of the food chain in the multimillion-dollar compound prescription scheme, District Court Judge Robert Kugler agreed Thursday.
The judge imposed the lightest sentence to date in the huge medical fraud scheme, sentencing Schallus to just six months of home confinement.
The judge also gave the Northfield resident three years of probation and order him to pay nearly $478,000 in restitution. No fine was imposed.
There have been nearly 50 defendants in the case, according to the prosecuting attorney.
Schallus pleaded guilty in July.
Assistant U.S. Attorney Christine Hud did not oppose probation and house arrest, moving to dismiss all but one count against Schallus.
About a dozen friends and relatives, including the woman Schallus now lives with, sat in the courtroom, many quietly weeping during a recap of the case and then slightly louder as the judge’s intentions became clear.
Kugler, a former N.J. deputy attorney general and the son of a former state attorney general, agreed with the argument Schallus’ punishment should be at the lowest end of the sentences imposed in the medical fraud conspiracy that ran from Louisiana to the New Jersey shore, beginning in 2014.
The judge considered that Schallus lost his pension, resigned in disgrace from the police department where he had worked for 19 years, and had his marriage fall apart.
The since-retired Ventnor police chief knew of and approved Schallus’ outside work marketing compound cream vitamins, the judge was told.
The marketing scheme was concocted to get the highest possible reimbursement amount through insurance.
Schallus had just seven clients from his social circle and was not branded a recruiter in the scheme.
His lawyer, John C. Whipple of Morristown, described his client as “a good person who used horrible judgment.”
He added that his client’s old life is completely gone as a result.
Schallus now works for a delivery service and makes $24 an hour, a job he can keep as he works to rebuild his life and reputation because he is allowed to leave home for work, Whipple said.
The judge, who has overseen all of the cases from the beginning, offered an observation about how the sprawling case has hit the Atlantic County communities.
“A whole generation of community leaders have been wiped out,” Kugler said.
A worker who has seen all of the cases unfold called it “a huge pyramid, “ the biggest she had ever seen in the federal court in Camden.
For his part, Schallus was brief and contrite.
“I’m ashamed,” he said. “This was the biggest mistake of my life.”
Dressed in a somber dark suit and a white shirt, he also apologized, telling the judge he was embarrassed and remorseful.
Brian Pugh — the man who recruited Schallus, and who he grew up with — is set to be sentenced Monday, according to the court schedule.
Dr. John Gaffney, 55, of Linwood: Margate doctor must forfeit $25,000. Cost: $24.9 million
Mike Pepper, 45, of Northfield: Atlantic City firefighter must forfeit $113,627.54. Cost: $719,000
Nicholas Tedesco, 44, of Linwood: local candy retailer must forfeit $782,766.56. Cost: $2 million
Tara LaMonaca, 43, of Linwood: Pharmaceutical representative must forfeit $89,855.13. Cost: $530,527
William Hunter, 43, of Sewell: Salesman must forfeit $245,020.08. Cost: $1.3 million
Judd Holt, 42, of Marlton: Pharmaceutical representative must forfeit $95,574.49. Cost: $769,762
Steven Urbanski, 37, of Marlton: Pharmaceutical representative must forfeit $113,600. Cost: $250,000
Corey Sutor, 37, of Ventnor: Ventnor firefighter, must forfeit $150,397.79. Cost: $2 million.
Ed Sutor Jr., 36, of Linwood: Ventnor firefighter, must forfeit 335,551.81. Cost. $2.7 million.
Mark Bruno, 45, of Northfield: Pharmaceutical representative, received $68,872. Cost: $524,935
John Sher, 40, of Margate: Margate firefighter, received $327,897.
Christopher Broccoli, 50, of West Deptford: Received $150,315.
