At Least 20 In Massive NJ Drug Scheme: Cops, Doctors, Teachers | Patch

Another person has admitted her role this week in a massive drug fraud scheme in New Jersey involving doctors, teachers and police officers, according to authorities. At least 20 people have admitted guilt in the crime.

A Stafford Township woman on Monday admitted defrauding New Jersey state health benefits programs and other insurers by submitting fraudulent claims for unnecessary prescriptions, U.S. Attorney Craig Carpenito announced.

Kristie Masucci, 36, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to a charge of conspiracy to commit health care fraud, authorities said.

The guilty plea is connected to a scheme that defrauded New Jersey state health benefits programs and other insurers out of more than $25 million, authorities said.

Before Masucci, at least 19 pleaded guilty in connection with this scheme. Others include police officers; state troopers; Richard McAllister, a 42-year-old Pleasantville school teacher from Ocean City; William Hunter, 43, a salesman from Sewell; Michael Sher, a firefighter from Northfield; Nicholas Tedesco, a retail director for a local candy company, and his brother Matthew, an alleged leader of the conspiracy.

Others were Middle Township school teacher Shawn Sypherd, 46, of Marmora; sales representatives Andrew Gerstel, 32, of Galloway; 36-year-old George Gavras, of Moorestown; and 42-year-old Judd Holt, of Marlton. John Gaffney, a Margate doctor, also pleaded guilty.

A pharmaceutical salesman caught up in the scheme also worked directly with James Kauffman, the endocrinologist who killed himself in January while he awaited trial on charges he arranged the May 2012 murder of his wife, according to The Philadelphia Inquirer.

Read more: Husband Accused In NJ Radio Host's Murder Commits Suicide

Last year, Matthew Tedesco, 42, a pharmaceutical sales representative from Linwood, and Robert Bessey, 43, of Philadelphia, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden federal court to charges of conspiracy to commit health care fraud.

In the scheme, Masucci served as a recruiter and persuaded individuals in New Jersey to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified as the "Compounding Pharmacy," according to authorities.

From January 2015 through February 2016, conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply.

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications, according to authorities.

An entity referred to as the "Pharmacy Benefits Administrator" provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees and eligible dependents. It also covers the School Employees' Health Benefits Program, which includes qualified local education employees, retirees, and eligible dependents.

Masucci and conspirators worked to fraudulently obtain compounded medications from the "Compounding Pharmacy" without any evaluation by a medical professional that they were medically necessary, according to authorities.

In return, the pharmacy paid one of Masucci's conspirators a percentage of each prescription filled and paid by the "Pharmacy Benefits Administrator," which was then distributed to Masucci and other members of the conspiracy.

The "Pharmacy Benefits Administrator" paid the "Compounding Pharmacy" more than $50 million for compounded medications mailed to individuals in New Jersey, including $1.88 million for prescriptions submitted by Masucci and her cohorts. Masucci received $388,608 for her role in the scheme.

Masucci 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 Feb. 5, 2019. As part of her plea agreement, Masucci must forfeit her criminal proceeds and pay restitution in an amount to be determined at sentencing.

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