Three former pharmaceutical sales representatives and a school guidance counselor have become the latest people to be sentenced to prison for their roles in a multimillion-dollar health care fraud scheme involving expensive compound medications.
The U.S. attorney's office announced Wednesday the sentencings of Michael Pilate, 43, of Williamstown; Tara LaMonaca, 47, of Linwood; George Gavras, 40, of Moorestown and 43-year-old Andrew Gerstel of Galloway.
More than two dozen people have pleaded guilty in a long-running investigation of a conspiracy involving state and local government employees in New Jersey and a pharmacy in Louisiana.
According to the U.S. attorney's office in Newark, the scheme exploited the fact that some of the employees had insurance that covered expensive compound medications such as pain, scar, antifungal and libido creams. Reimbursements ran as high as thousands of dollars for a one-month supply.
Conspirators recruited employees like teachers, police and firefighters to submit claims for prescriptions, based solely on the amount of money the insurance company would pay for them.
The prescriptions were signed by doctors who never saw the patients, and were filled by the pharmacy, which billed a state pharmacy benefits administrator in New Jersey. The Louisiana pharmacy gave the conspirators a percentage of each prescription filled and paid for by the New Jersey benefits administrator.
The U.S. attorney's office estimated the state benefits administrator paid the pharmacy a total of about $50 million over the course of the scam.
Pilate, formerly a guidance counselor with the Pleasantville school district, was sentenced to 18 months in prison on Wednesday by U.S. District Judge Robert Kugler; LaMonaca, a former pharmaceutical sales representative, received an eight-month sentence.
Gavras received a 13-month sentence Tuesday and Gerstel was sentenced to 12 months. Both worked as pharmaceutical sales representatives.
All four had previously pleaded guilty to conspiracy to commit health fraud. As part of their plea agreements, they were ordered to forfeit criminal proceeds and pay restitution of as much as $3.49 million, in Pilate’s case.
Hayley Taff, CEO of Louisiana-based Central Rexall Drugs, pleaded guilty last year and is scheduled to be sentenced in April.