Law & Justice

Local Resident Admits to Scheme to Defraud Hospitals of More Than $800,000

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TRENTON, N.J. – A regional manager and a product specialist selling medical devices to hospitals for Integra LifeSciences Corp. of Plainsboro, New Jersey, today admitted their roles in a scheme to defraud hospitals of more than $800,000, U.S. Attorney Paul J. Fishman announced.
 
Daniel Metz, 34, of Fairfield, New Jersey, and Charles B. Carey Jr., 35, of Clark, New Jersey, each pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton federal court to separate informations charging them with conspiracy to commit wire fraud.
 
They fraudulently caused medical facilities to pay more than $800,000 in inflated bills.
The count of conspiracy to commit wire fraud to which Metz and Carey pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
 
Metz and Carey also agreed to forfeit $100,000 and $77,000, respectively, representing the amounts of money they personally made through the fraud scheme. The defrauded hospitals have been reimbursed by Integra for the fraudulent charges.
 

Sentencing is scheduled for Jan. 20, 2015.
 
According to documents filed in this case and statements made in court:
 
Metz, who is being represented by Lawrence Lustberg Esq., of Newark, worked at Integra, a provider of orthopedic products, including devices and implants for the spine, foot and ankle, hand and wrist, and shoulder and elbow, from July 2005 until his termination in April 2013, first as a product specialist/sales representative and then as the Northeast regional manager, supervising 16 product specialists and assistant sales representatives in Massachusetts, New Jersey, New York, and Pennsylvania.
 
Carey, who is being represented by Timothy Donohue Esq., of West Orange, was a product specialist, reporting to Metz, from January 2009 until he resigned in April 2011.

They were responsible for calling on surgeons to increase sales volume and were routinely present during surgeries where they shared consignment trays with pre-packaged Integra products and surgery-specific products. Integra billed the hospitals and surgery centers for the products used. The product specialists and their supervisors were compensated based on salary, sales target-based commission and bonuses.

Metz admitted to using various fraudulent methods to overcharge hospitals and surgery centers. He said he sometimes charged for a greater quantity or a more expensive product than was actually used, which increased his compensation and improved his employment evaluations.

Metz and Carey admitted that after Metz became regional manager, he taught at least some of the fraudulent methods to product specialists working for him including Carey, who sometimes employed those methods too.

The government is represented by Jacob T. Elberg, Chief of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit, in Newark.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, with the investigation leading to today’s guilty pleas. He also thanked detectives of the Morris County Prosecutor’s Office, under the direction of Prosecutor Fredric M. Knapp, for their contributions to the investigation.

U.S. Attorney Paul J. Fishman also reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $540 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

 

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