Newark, New Jersey – An ex-North Brunswick police department police officer on 8th March 2021 pleaded guilty to his participation in a multimillion-dollar conspiracy that stole state health benefits programs via the submission of compounded medications prescriptions that lacked medical necessity, announced Rachael A. Honig, Acting U.S. Attorney.
Daniel Passafiume, from Monroe, New Jersey, age 45, pled guilty through videoconference before Michael A. Shipp, U.S. District Judge, to an indictment charging him with plotting to perpetrate health care fraud.
Pursuant to documents filed in this matter and attestations made in court:
From Jan. 2014 to Nov. 2016, Passafiume and a co-schemer, identified in the indictment as CC-1, promoted certain compounded drugs prescriptions, like vitamins and pain creams, to recipients of New Jersey state insurance programs like the SHBP (State Health Benefits Program). These insurance programs reimbursed thousands of U.S. dollars for compounded drugs, which are specialty drugs mixed by a pharmacist to attain the specific medical requirements of a specific patient. Though compounded drugs are not permitted by the FDA (Food and Drug Administration), they are accurately prescribed after a doctor establishes that an FDA-accepted drug does not attain the health necessity of a specific patient because, for instance, the patient is sensitive to a dye or another ingredient or needs the drug in a different formula.
Passafiume and his co-schemer had arrangements with pharmacies to amass large commission reimbursements for every prescription they got for the pharmacy. Passafiume and his co-schemer found persons with these insurance programs and linked them with physicians who were willing to rubber-stamp prescriptions without a checkup or a resolve that the persons required the compounded drugs. Those enrolled to get medications included workers of a New Jersey police department, kin of these workers, and Passafiume’s own kin. Occasionally, Passafiume offered recipients with checks, cash, and gift cards for consenting to get these prescriptions.
The scheme charge provides for a maximum possible imprisonment term of ten years and a fine of 250,000 U.S. dollar fine, or double the proceeds or loss from the crime, whichever is greater. As per his plea deal, Passafiume was directed to forfeit 284,659 U.S. dollars in criminal returns and reimburse restitution of 3.27 million U.S. dollars. Passafiume is set to be sentenced on 12th July 2021.
Acting United States Attorney Racheal Honig thanked special agents of the FBI, under the leadership of Special Agent-in-Charge George Crouch Jr. in Newark, for the remarkable investigation resulting in this guilty plea.
The Special Prosecutions Division Senior Trial Counsel Leslie Faye Schwartz and the Newark Health Care Fraud Unit in Newark U.S. Assistant Attorney Osmar J. Benvenuto handled this matter’s prosecution on the Federal government’s behalf.
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