NEWARK, NJ – The largest health care fraud and opioid enforcement action ever taken by the Justice Department resulted in three guilty pleas and five arrests in New Jersey involving a South Jersey-Philadelphia drug trafficking ring that sold more than 1,100 oxycodone pills and multiple individuals who used phony claims to steal millions from state and private insurers, according to U.S. Attorney Craig Carpenito.
Robert Agresti, a 61-year-old doctor from Essex Fells; Brian Catanzarite, a 42-year-old former gym owner from Cedar Grove; and Enver Kalaba, a 26-year-old Metropolitan Transportation Authority (MTA) bus driver from Old Bridge were among the New Jersey defendants who pleaded guilty this week. Tiffany Marsh, a 40-year-old medical billing company owner from West Orange; Keasam Johnson, a 34-year-old telecommunications company employee from East Orange were arrested on Tuesday.
Carpenito announced this week that 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 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 these arrests. In addition, the Department of Health and Human Services (HHS) 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 excluded for 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 this week, charging four defendants with conspiracy to commit health care fraud and three defendants with conspiracy to distribute oxycodone.
Agresti and Catanzarite pleaded guilty on Tuesday to their roles in separate conspiracies to attain phony compounded medication prescriptions on behalf of companies that marketed those products. Kalaba pleaded guilty on Wednesday to a similar scheme targeting his employer.
Marsh and Johnson were arrested earlier this week for their roles in a conspiracy to collect insurance reimbursements for chiropractic services that were never rendered.
Cherry Hill resident Anthony Pepe III, a 40-year-old anesthesiology technologist for a Philadelphia hospital, along with Daniel Watson, 39, of Bellmawr, and Prussia Hing, 35, of Philadelphia, were also arrested on Tuesday for their alleged roles in an oxycodone distribution ring.
“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,” said Carpenito. “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.”
Attorney General Jeff Sessions added that health care fraud is “a betrayal of vulnerable patients, and often it is theft from the taxpayer.” He said that 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,” said Sessions. “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.”
With the announcement of the largest health care fraud enforcement action in American history, Sessions said that this is the most fraud, the most defendants and the most doctors ever charged in a single operation. He also said there is evidence that the department’s ongoing work has stopped or prevented billions of dollars’ worth of fraud.
“I want to thank our fabulous partners with the FBI, DEA, our Health Care Fraud task forces, HHS, the Defense Criminal Investigative Service, IRS Criminal Investigation, Medicare, and especially the more than 1,000 federal, state, local, and tribal law enforcement officers from across America who made this possible,” he said. “By every measure we are more effective at finding and prosecuting medical fraud than ever.”
“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 healthcare for Americans in need,” said HHS Secretary Alex M. Azar III. “This year’s Takedown Day is a significant accomplishment for the American people, and every public servant involved should be proud of their work.”
The United States Attorney District of New Jersey released the following information about the defendants mentioned above:
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,” said Special Agent in Charge Gregory W. Ehrie of the Newark FBI Field Office. “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 over $1.1 million from the scheme.
“One of the Defense Criminal Investigative Service’s (DCIS) top priorities is to protect the integrity of TRICARE, the DOD’s healthcare system for military members, retirees and their dependents,” stated Special Agent in Charge Leigh-Alistair Barzey of the DCIS Northeast Field Office. “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,” said Inspector General Barry Kluger of the MTA Office of the Inspector General. “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.
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 made pursuant to an agreement between Marsh and Johnson, who 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 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.
Pepe, Watson, and Hing
Between January 2018 and May 2018, Pepe, Watson, and Hing engaged in a conspiracy which resulted in the trafficking of 1,180 oxycodone pills – 680 of which were unadulterated oxycodone and 500 of which were pressed pills mixed with hydrocodone, codeine, and methylphenidate. As part of the investigation, law enforcement observed eight controlled purchases, three of which were carried out by the defendants – including Pepe dressed in his work scrubs – in front of the Philadelphia hospital where Pepe was employed.
“Philadelphia and Camden are awash in opioids, with the human toll mounting steadily, day by day,” said Michael T. Harpster, Special Agent in Charge of the FBI’s Philadelphia Division. “The idea of a medical professional taking a work break to push pills on the street, as alleged in the complaint, is at once disheartening and infuriating. The FBI will continue to doggedly investigate and bring to justice traffickers contributing to our area’s opioid crisis.”
“The individuals involved in these schemes are feeding this country’s opioid crisis,” said Scott J. Lampert, Special Agent in Charge for the Department of Health & Human Services Office of Inspector General. “This takedown sends a clear message that those suspected of engaging in health care fraud will be caught and face consequences for their actions.”
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, 2018. Pepe, Watson, and Hing each face a potential 20 years in prison and a $1 million fine. The charges and allegations against Marsh, Johnson, Pepe, Watson, and Hing are merely accusations, and they are considered innocent unless and until proven guilty.
U.S. Attorney Carpenito credited special agents of the FBI Newark Field Office, under the direction of Special Agent in Charge Ehrie; the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Harpster in Philadelphia; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Lampert; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Barzey; the MTA Office of the Inspector General, under the direction of Inspector General Kluger, and special agents of the U.S. Attorney’s Office with the investigations that yielded this week’s guilty pleas and arrests. He also thanked the Camden County Police Department, under the direction of Chief J. Scott Thomson, and the Cherry Hill Police Department, under the direction of William Monaghan, for their assistance.
The government is represented in these cases by Assistant U.S. Attorney Erica Liu, Chief of the U.S. Attorney's Office Opioid Abuse Prevention and Enforcement Unit in Newark, and Assistant U.S. Attorneys Lauren E. Repole, Christina O. Hud and Diana Carrig of the U.S. Attorney’s Office Criminal Division.