The giant operation included charges against doctors and other medical professionals.
A doctor, a medical billing company owner and an MTA bus driver from Middlesex County were among the eight people charged in New Jersey this week as part of what federal officials are calling "the largest health care fraud and opioid enforcement action ever taken by the Justice Department."
Six of the eight charged in New Jersey hail from the state.
They include Anthony Pepe III, 40, of Cherry Hill, and Daniel Watson, 39, of Bellmawr, who allegedly worked with a Philadelphia man, Prussia Hing, 35, to sell oxycodone pills in front of the hospital where one of them worked as an anesthesiology technologist, according to a statement from the U.S. Attorney's Office in New Jersey.
Charged in connection with alleged fake health care billing schemes were Brian Catanzarite, 42, of Cedar Grove, Enver Kalaba, 36, of Old Bridge, Tiffany Marsh, 40, of West Orange, and Keasam Johnson, 34, of East Orange, the release said. Robert Agresti, 61, a doctor from from Essex Falls, New York, was also charged with conspiracy to commit health care fraud.
The wide-ranging investigation led to the arrests of 601 people across the country, the U.S. Attorney's Office said, including 165 doctors, nurses and other medical professionals for alleged health care fraud schemes. The office said 76 doctors were charged with illegally distributing opioids and other narcotics.
Some have already taken plea deals, but the three accused in the drug trafficking operation and arrested Tuesday, have not.
According to a release from the U.S. Attorney's Office and the federal court complaints, FBI agents used a confidential informant and an undercover officer to get inside the alleged drug ring from January to May, making eight controlled purchases worth over $25,000.
In court documents, FBI Special Agent Stuart Sobin said Hing was the source for the pills -- both pure oxycodone and diluted, pressed pills. He sold the drugs to Pepe, who sold them to Watson, who sold them to the informant, according to Stobin's sworn statement.
In Bellmawr starting in January, the informant made controlled purchases from Watson and introduced him to the undercover officer, who then made four purchases, Sobin said.
Eventually, Sobin wrote in court documents, the informant and Watson met Pepe while he was on break outside the hospital, and purchased the drugs from him there. Agents also watched Pepe exchange items -- once hidden in a surgical mask -- with Hing in his car at the same location, Stobin said.
During one conversation, Sobin wrote, Watson bragged that he was getting 100 to 150 pills a day from Pepe to sell. "We been cranking them motherf---ers out," he told the informant, according to Sobin.
"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," Michael T. Harpster, Special Agent in Charge of the FBI's Philadelphia Division, said in a statement.
Millions in prescription drug fraud
Also as part of the operation, two other New Jersey residents and a New York doctor have pleaded guilty to conspiracy to commit health care fraud for using phony compounded prescriptions to defraud insurance companies and collect kickbacks.
The U.S. Attorney's Office did not say if the arrests were related to the multi-million dollar scheme federal agents uncovered stretching across South Jersey and into other states.
In that case, medical professionals, a compounding pharmacy, recruiters and public employees worked together to use fake prescriptions for expensive medications to collect insurance money that was then paid out to everyone involved. Because compounded drugs are specially mixed to order, they are much more expensive for insurance companies. Over a dozen people have pleaded guilty.
One of those arrested in this week's operation was Dr. Agresti, who admitted to defrauding insurance companies, including New Jersey employee health benefit programs, by prescribing medically unnecessary compounded prescriptions in exchange for $300 cash he received from the company marketing the prescriptions. His phony prescriptions cost insurers $8.9 million, the press release said.
Also pleading guilty this week was Catanzarite, who admitted that he recruited members of a gym he owned to work as sales representatives for the company that marketed compounded medicines.
Catanzarite convinced state employees to get prescriptions for compounded medication that they didn't need, so both he and the state employee could get the kickback. He also paid a nurse practitioner to fraudulently obtain compounded medication prescriptions, the U.S. Attorney's Office said.
"Altogether, Catanzarite caused losses of at least $3.5 million and personally made over $1.1 million from the scheme," the release said.
Kalaba, a Metropolitan Transportation Authority bus driver from Old Bridge, pleaded guilty this week in a similar scheme. He acted as a sales representative of the medication marketing company and paid his colleagues "monthly cash bribes" and $100 per phony prescription they could obtain. He cost his insurer $2.9 million, the release said.
"Our investigation is ongoing to determine the extent to which additional MTA employees may have participated in this fraudulent scheme," Inspector General Barry Kluger of the MTA said in the statement.
Faking services
Two other New Jersey residents were charged this week for allegedly conspiring to collect insurance reimbursements for 800 chiropractic appointments that never happened, the release said.
The U.S. Attorney's office alleges that between 2016 and 2017, Marsh, a medical billing company owner, used her access to a chiropractor's billing software to generate false claims for services.
She worked with Johnson, a telecommunications company employee, who recruited employees to allow the claims to be made in their names for a cut of the proceeds, according to the U.S. Attorney's Office.
"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," U.S. Attorney Carpenito said in the statement.
Rebecca Everett may be reached at reverett@njadvancemedia.com. Follow her on Twitter @rebeccajeverett. Find NJ.com on Facebook.
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