An Ex- Co-Owner of a Marketing Company in New Jersey Admitted Participation in 8.8 Million U.S. Dollars Compounded Prescription Medication Conspiracy

An Ex- Co-Owner of a Marketing Company in New Jersey Admitted Participation in 8.8 Million U.S. Dollars Compounded Prescription Medication Conspiracy

Newark, New Jersey – The previous co-owner of a marketing company in New Jersey, on 23rd September 2020, admitted participation in a conspiracy to defraud health care insurance programs of about 8.8 million U.S. dollars for the billing of compounded prescription drugs that were not medically necessary, the United States Attorney Craig Carpenito reported.

Lisa Curty, from Staten Island, New York, age 43, admitted guilty via videoconference before the United States District Judge John Michael Vazquez to information accusing her of a scheme to commit healthcare fraud.

As per the records filed in this matter and court statements:

Compounded drugs are special medications mixed by a physician based on specific health requirements of a particular patient. Even though the FDA (Food and Drug Administration) prohibits compounded medications, they are correctly prescribed when a physician finds out that a drug that is approved by the Food and Drug Administration does not meet the medical needs of a specific patient, for instance, if the patient is allergic to certain ingredients in the drug.

From February 2015 to February 2017, Curty engaged in a scheme that was associated with the submission of false claims for compounded drug prescriptions to public and private healthcare insurance programs. The conspiracy centered on finding out that some insurers paid for compounded prescriptions, including wound creams, scar creams, and metabolic vitamins/supplements at higher reimbursement rates.

Curty took advantage of this opportunity by establishing a marketing company (“Marketing Company”) in New Jersey and employing sales representatives to aim for individuals who had insurance plans for compounded drugs. The sales representatives persuaded those individuals to acquire compounded medication prescriptions irrespective of medical need, often by offering cash payments to them. The individuals were then sent to particular telemedicine companies, which the Marketing Company or its affiliates paid, to get the prescriptions.

After the prescriptions for the compounded medications were written, they were filled by specific compounding pharmacies with which the Marketing Company conspired. The compounding pharmacies would then submit reimbursement claims to the insurance programs and would pay the Marketing Company a percentage of the compensation received. Curty being one of the Marketing Company owners, kept a portion of the amount and paid a commission to the respective sales representative.

Christine Myers, Curty’s co-conspirator and one of the Marketing Company owners, admitted guilty on 27th July 2020 to a scheme to commit healthcare fraud and was sentenced on 1st December 2020.

Two of the sales representatives that were hired by the Marketing Company, Enver Kalaba, and Christopher Frusci, were previous Metropolitan Transportation Authority workers. Since the Metropolitan Transportation Authority’s insurance program covered compounded medications, Kalaba and Frusci targeted colleagues at the Metropolitan Transportation Authority and paid them cash kickbacks per compounded medication prescription they submitted. Kalaba and Frusci both had previously admitted guilty to charges of scheme to commit healthcare fraud for their specific roles in the conspiracy. Kalaba was sentenced in the federal court of Newark on 7th February 2019 to a 20-month imprisonment term and 1 year of release with supervision and must forfeit 138,630 U.S. dollars in criminal proceeds he got as a result of his role in the conspiracy and pay 2.9 million U.S. dollars in restitution. Frusci sentencing is still pending.

The count of scheme to commit healthcare fraud carries a punishment of up to 10 years imprisonment, 250,000 U.S. dollars fine, or twice the total gain or loss from the crime. As part of Curty’s plea deal, she must forfeit 1.475 million U.S. dollars in criminal proceeds she got as a result of her participation in the conspiracy and pay at least 8.8 million U.S. dollars in restitution. Curty’s sentencing is set up for 26th January 2021.

The United States Attorney Craig Carpenito credited the special agents of the Federal Bureau of Investigation, led by George M. Crouch, the FBI Special Agent in Charge; the United States Department of Defense, Defense Criminal Investigative Service, under the guidance of Leigh-Alistair Barzey, the Special Agent in Charge; and the Office of the Inspector General – Metropolitan Transportation Authority, under the guidance of Inspector General Carolyn Pokorny, with the continuing investigation that led to Curty’s guilty plea.

The government was represented by Adam Baker, the United States Assistant Attorney of the United States Attorney’s Office, Newark Opioid Abuse Prevention and Enforcement Unit.

Breaching the False Claim Statute, the Anti-Kickback Act, and the Controlled Substance Act is severely punished by the law. Additionally, scheming to execute health care fraud such as defrauding taxpayer-funded health care programs, including TRICARE, Medicaid, or Medicare programs, is a severe crime. Any person who commits these crimes breaks the law and is severely penalized if found guilty of the accusations. Once charged with these offenses, you should seek the best legal advice or representation to safeguard and pursue your rights. Hire our qualified team of top-rated defense and criminal attorneys if you want the best legal representation and assistance, which will result in achieving positive results for your matter. At Health Care Fraud Group, we have an experienced team of lawyers with tremendous experience in handling Health Care Fraud related cases related to the Federal Health Care Program; they are highly knowledgeable about civil and federal issues. The defense lawyers are well recognized across the U.S. due to their excellent and outstanding work and professionalism when handling health care fraud cases and inquiries. Our lawyers are well-equipped with previous knowledge of each aspect of Health Care fraud defense, medical, and legal issues.

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