CAMDEN, N.J. – An Atlantic County, New Jersey, man today
admitted defrauding New Jersey state health benefits programs out of millions
of dollars by submitting fraudulent claims for medically unnecessary
prescriptions, U.S. Attorney Craig Carpenito announced.
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 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.
U.S. Attorney Carpenito credited agents of the FBI’s
Atlantic City Resident Agency, under the direction of Special Agent in Charge
Gregory W. Ehrie in Newark, IRS – Criminal Investigation, under the direction
of Special Agent in Charge John R. Tafur in Newark, and the U.S. Department of
Labor, Office of Inspector General, New York Region, under the direction of
Special Agent in Charge Michael C. Mikulka, with the investigation leading to
today’s guilty plea. He also thanked the Division of Pensions and Financial
Transactions in the State Attorney General’s Office, under the direction of
Attorney General Gurbir S. Grewal and Division Chief Eileen Schlindwein Den
Bleyker, for its assistance in the investigation.
The government is represented by Assistant U.S. Attorneys R.
David Walk, Jr. and Alyson M. Oswald of the U.S. Attorney’s Office in Camden.
Defense counsel: John Zarych Esq., Northfield, New Jersey
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