NEWARK, NJ — The largest health care fraud and opioid enforcement action ever taken by the Justice Department resulted in three guilty pleas and two arrests in northern New Jersey, U.S. Attorney Craig Carpenito announced on June 28. Additionally, three individuals from South Jersey and Philadelphia were arrested for their alleged involved in a South Jersey-Philadelphia drug trafficking ring that sold more than 1,100 oxycodone pills.
The national takedown targeted more than 601 charged defendants across 58 federal districts, including more than 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $2 billion in false billings. Of those charged, more than 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Thirty state Medicaid Fraud Control Units also participated in the June 28 arrests. In addition, the Department of Health and Human Services announced that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other federal health care programs, which includes 587 providers, due to conduct related to opioid diversion and abuse.
As part of the national takedown, the New Jersey U.S. Attorney’s Office filed five separate cases the week of June 24 charging five defendants with conspiracy to commit health care fraud and three defendants with conspiracy to distribute oxycodone.
Robert Agresti, 61, a doctor from Essex Fells, and Brian Catanzarite, 42, a former gym owner from Cedar Grove, pleaded guilty on June 26 to their roles in separate conspiracies to attain phony compounded medication prescriptions on behalf of companies that marketed those products. Enver Kalaba, 36, a Metropolitan Transportation Authority bus driver from Old Bridge, pleaded guilty June 27 to a similar scheme targeting his employer.
Tiffany Marsh, 40, a medical billing company owner from West Orange, and Keasam Johnson, 34, a telecommunications company employee from East Orange, were arrested June 26 for their alleged roles in a conspiracy to collect insurance reimbursements for chiropractic services that were never rendered.
“At a time when many Americans worry about securing health insurance for their families, we’ve seen far too many instances where public and private insurance providers are raided for millions in phony reimbursements for compounded medications or non-existent therapy services,” Carpenito said in a press release. “On top of that, we are in the midst of an opioid crisis perpetuated by both rogue health care professionals and street-level dealers seeking to profit from the addiction of others. This national takedown seeks to address both fronts, and thanks to the efforts of our federal and local law enforcement partners right here in the New Jersey area, eight individuals will now answer for these crimes in federal court.”
“Health care fraud is a betrayal of vulnerable patients, and often it is theft from the taxpayer,” Attorney Gen. Jeff Sessions said in the release. “In many cases, doctors, nurses and pharmacists take advantage of people suffering from drug addiction in order to line their pockets. These are despicable crimes. That’s why this Department of Justice has taken historic new steps to go after fraudsters, including hiring more prosecutors and leveraging the power of data analytics. Today the Department of Justice is announcing the largest health care fraud enforcement action in American history. This is the most fraud, the most defendants, and the most doctors ever charged in a single operation — and we have evidence that our ongoing work has stopped or prevented billions of dollars’ worth of fraud.”
“Every dollar recovered in this year’s operation represents not just a taxpayer’s hard-earned money — it’s a dollar that can go toward providing health care for Americans in need,” HHS Secretary Alex M. Azar III said in the release. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
Agresti admitted that, from November 2014 through September 2017, he participated in a scheme to defraud health insurance plans, including New Jersey state and local employee health benefit programs, by prescribing medically unnecessary compounded prescriptions on behalf of a company that marketed those products.
Agresti was paid $300 in cash for every prescription he authorized for compounded medication, regardless of medical necessity. Agresti signed the prescriptions brought to him by other conspirators without examining or speaking with the patients. Multiple health benefit programs paid more than $8.9 million as a result of Agresti’s phony prescriptions.
“Health care fraud adversely impacts our overburdened health care system, draining valuable funds away from those in need into the greedy coffers of the conspirators,” Special Agent in Charge Gregory W. Ehrie of the Newark FBI Field Office said in the release. “The FBI will continue to vigorously investigate these so called ‘victimless crimes,’ which deplete our nation’s resources.”
Catanzarite admitted that from March 2015 through January 2017, he conspired to defraud New Jersey state benefit programs. Catanzarite was recruited by one of his former gym members to become a sales representative of a company that marketed compounded medications. The marketing company received a percentage of every prescription that its sales representatives steered toward a particular compounding pharmacy.
To maximize his profit, Catanzarite convinced state beneficiaries to obtain compounded medications regardless of their medical necessity. On several occasions, Catanzarite even paid an advanced nurse practitioner, introduced to him by the marketing company, or used a telemedicine service that was paid for by the marketing company, to fraudulently obtain compounded medication prescriptions. Altogether, Catanzarite caused losses of at least $3.5 million and personally made more than $1.1 million from the scheme.
“One of the Defense Criminal Investigative Service’s top priorities is to protect the integrity of TRICARE, the DOD’s health care system for military members, retirees and their dependents,” Special Agent in Charge Leigh-Alistair Barzey of the DCIS Northeast Field Office said in the release. “This plea is the result of a joint effort and DCIS will continue to coordinate with the DOJ, FBI, HHS-OIG, MTA-OIG and other law enforcement partners to combat health care fraud.”
Kalaba admitted that, from April 2016 through August 2017, he conspired to defraud the MTA’s health benefits plan using fraudulent claims for medically unnecessary compounded medications. Kalaba was recruited into the scheme by another former MTA bus driver, Christopher Frusci. Both Frusci and Kalaba acted as sales representatives of a company that marketed compounded medications.
Kalaba paid MTA beneficiaries monthly cash bribes, including $100 per phony prescription. To ensure physicians prescribed compounded medications regardless of medical necessity, Kalaba referred MTA beneficiaries to telemedicine physicians who were paid by the marketing company or its affiliates. Altogether, Kalaba caused losses of $2.9 million and made $138,629 from the scheme.
“Our investigation is ongoing to determine the extent to which additional MTA employees may have participated in this fraudulent scheme,” Inspector Gen. Barry Kluger of the MTA Office of the Inspector General said in the release. “I applaud and am pleased to support the efforts of the U.S. Attorney, along with the FBI and the Department of Defense Office of Inspector General, to combat this nationwide epidemic of health care fraud that unfortunately, and at great cost, has infected the MTA as well.”
Marsh and Johnson
Marsh, the owner and operator of TJB Medical Billing Consultants LLC, provided medical billing to two New Jersey chiropractors. Johnson worked as a supervisor in the New Jersey office of a large telecommunications company.
According to law enforcement officials, Marsh used her access to the billing software at the chiropractor offices to generate false claims for out-of-network chiropractic services that were never performed. The claims were allegedly made pursuant to an agreement between Marsh and Johnson, who reportedly recruited other employees to allow false claims to be made in their names in exchange for a portion of the proceeds. From June 2016 through November 2017, Marsh allegedly submitted approximately 800 fraudulent claims seeking approximately $850,000 in reimbursements, which resulted in the payment of approximately $333,000 for chiropractic services that were never rendered.
Agresti, Kalaba, Catanzarite, Marsh and Johnson each face a potential 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Sentencing for Agresti, Catanzarite and Kalaba is scheduled for Oct. 30. The charges and allegations against Marsh and Johnson are merely accusations, and the two individuals are considered innocent unless and until proved guilty in a court of law.
U.S. Attorney Carpenito credited special agents of the FBI Newark Field Office; the FBI’s South Jersey Resident Agency; the U.S. Department of Health and Human Services, Office of Inspector General; the U.S. Department of Defense, Defense Criminal Investigative Service; the MTA Office of the Inspector General; and special agents of the U.S. Attorney’s Office with the investigations that yielded these recent guilty pleas and arrests.