An Atlantic County firefighter admitted to defrauding New Jersey state health benefits programs out of millions of dollars by submitting fraudulent claims for medically unnecessary prescriptions.
Edward Sutor Jr., 36, of Linwood, New Jersey, a Ventnor City firefighter, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to an information charging him with conspiracy to commit health care fraud.
According to , U.S. Attorney Craig Carpenito, documents filed in this case and statements made in court, compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient.
Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.
Sutor was one of the owners of a company formed to market prescription compounded medications, referred to as “Company 1.” From May 2015 through February 2016, Sutor and others associated with the company persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications.
The conspirators learned that certain compounded medication prescriptions – including pain, scar, and antifungal creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.
The conspirators also learned that the N.J. 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, would cover compounded medication prescriptions.
Sutor and his conspirators entered into an agreement under which Company 1 would receive a percentage of the amounts paid to compounding pharmacies for prescriptions secured by Sutor and his conspirators.
Sutor and his conspirators then recruited public employees, offered them hundreds of dollars per month, and persuaded them to agree to obtain prescription compounded medications without any examination by a medical professional to indicate that the medications were medically necessary.
Sutor would obtain insurance and personal information from the public employees and give that information to conspirators. Company 1 would receive a percentage of the amounts paid on these fraudulent prescriptions, which Sutor and others would share.
According to the information, Sutor and his conspirators caused New Jersey to pay over $2 million in fraudulent claims for compounded medications for public employees.
Sutor received $335,552 in gross proceeds for his role in the scheme. As part of his plea agreement, Sutor must forfeit these criminal proceeds and pay restitution of at least $2,682,708.
He 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 July 17, 2019.
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