Camden, New Jersey– On 10th September 2020, U.S. Attorney Craig Carpenito announced that a federal grand jury brought back a sixteen-count arraignment inculpating a doctor and medication salesperson with defrauding the state of New Jersey’s health welfare programs and other health care providers out of over 2.5 million USD by presenting fraudulent allegations for medically unrequired prescriptions, as well as illegally acquiring and divulging personal sensible patient health information safeguarded by HIPAA.
Keith Ritson, age 40, from Bayville, New Jersey, and Frank Alario, MD., age 63, from Delray Beach, California, was indicted with a conspiracy to perpetrate wire fraud and health care fraud, as well as personal actions of wire fraud and health care fraud. The two were indicted with a 2nd conspiracy to illegally acquiring and divulging personal sensible patient health information. Alario was further indicted with making a falsified report on a health care issue, and Ritson was further indicted with conspiracy to perpetrate money laundering and substantial counts of money laundering.
These cases were assigned to the U.S. District Attorney in Camden, Robert B. Kugler. The charged defendants were anticipated to make their first appearance in front of U.S. Magistrate Judge Ann Marie Donio in Camden through videoconference on 10th September 2020.
As per the charges:
Compounded drugs are specialty drugs blended by a chemist to meet a personal patient’s particular medical requirement. Although compounded drugs are not authorized by the FDA (Food and Drug Administration), they are correctly prescribed when a doctor ascertains that an FDA-approved drug does not meet a specific patient’s medical requirements, for instance, if a patient is hypersensitive to a dye or other component.
The schemers recruited persons to acquire very costly and medically unneeded compounded drugs from a chemist in Louisiana, Central Rexall (Central Rexall Drug Inc.). The schemers became aware that some compound drug prescriptions-including antifungal, scar, libido lotions, vitamin combinations, and pain relievers- would be remunerated by insurance providers in total in the thousands of USD for 1- month supply.
The schemers also became aware that some New Jersey state and local government and education workers, comprising of police officers, state troopers, and teachers, had an insurance cover for these specific compound drugs. An organization named in the charge as ” Pharmacy Benefits Administrator” offered chemist welfare management services to the Health Benefits Program, which insured eligible state and local government workers, retirees and qualified dependents, the School Employees’ Health Benefits Program, which covers eligible local education workers, retirees, and qualified dependents, and other insurance policies. Pharmacy Benefits Administration would remit prescription medication allegations and then charge the State of New Jersey or other insurance companies for the sum remitted.
In the 1st indicted scheme, Ritson recruited persons with prescription medication welfare issued by the Pharmacy Benefits Administrator to receive unrequired compound drug prescriptions, which Alario signed without tests, talking to, or setting up a doctor-patient relationship with the patient. Alario mailed a form to Central Rexall’s Compliance program in which he untruthfully vouched that he saw and talked to the patients face to face and set up a doctor-patient relationship before prescribing Central Rexall drugs.
Ritson and Alario’s reserve created patients of Alario’s medical practices who had insurance that covered the costly compounded drugs. Alario prescribed the drugs not for the patient’s requirement or order but for the interest that he and Ritson stood to acquire. The scheme resulted in the Pharmacy Benefits Administrator to remit more than 2.5 million USD for the fraudulent prescriptions. For his participation in the scheme, Ritson acquired a percentage of the sum that Central Rexall collected from the Pharmacy Benefits Administrator for the drugs, and Alario gained by acquiring free meals, travel, entertainment, and other reimbursements from Ritson.
In addition, the charge indicted Ritson and Alario with a separate plot to illegally acquire and divulge personal sensible patient health information for their selfish interests and trade profits. As a salesperson not associated with Alario’s medical practices, Ritson should not have had access to private patient records. However, since a few insurance companies covered the compound drugs advertised by Ritson, the defendant accessed patient records and other identifying data to find out patients’ insurance coverage. On not less than one instance, Ritson and Alario together accessed patient data on an office computer in order to ascertain the insurance coverage for the compounded drugs. Ritson, in addition, had access to locations in Alario’s office where patient records were kept or could be heard or seen, included workers prohibited areas with medical records, computers, and fax machines. Ritson was also often in attendance in the exam room in the course of the patient appointments with Alario for the purpose of advertising the compound drugs, at which time Alario presented Ritson to his patients as his “nephew” or gave the sense that Ritson was connected to the medical practice. By being in attendance during the patent examinations, Ritson gained access to patient’s medical records and safeguarded health information.
The wire fraud conspiracy and the health care fraud count bears a maximum possible sentence of twenty years in prison; every wire count bears a maximum possible sentence of twenty years in prison; every health care count bears a maximum possible sentence of ten years in prison; the falsified statement count and the conspiracy to illegally acquire and divulge personal sensible patient health information count each bears a maximum sentence of five years in prison, and the money laundering accusation bears a maximum sentence of ten years in prison. All the crimes are also punishable by a fine of 250,000 USD or double the total profit or loss from the crimes, whichever is larger.
U.S. Attorney Craig Carpenito commended the IRS- Criminal Investigation, under the supervision of Special Agent in Charge Michael Montanez in Newark; U.S. Department of Labor, Office of Inspector General, New York Region, under supervision of Special Agent in Charge Michael C. Mikulka; and the agents of the FBI Atlantic City Resident Agency, under the supervision of Special Agent in Charge George M. Crouch Jr. Newark, for conducting the investigation for the case leading to the conviction. He also applauded the Division of Pension and Financial Transaction in the State Attorney General’s Office, under the supervision of Attorney General Gurbir S. Grewel and Division Chief Aimee Nason, for their help in investigating these cases.
The government of the United States was represented by Assistant U.S. Attorneys R. David Walk Jr. and Christina O. Hud of the U.S. Attorney’s Office in Camden.
In the case, the claims and accusations contained are only allegations, and the defendant is considered innocent until proven guilty beyond a reasonable doubt in a federal court.
Individuals who collude or commit Medicaid or Medicare Fraud conspiracies or break the False Claim Statute break the law. Committing or Colluding to execute Medicaid or Medicare Fraud conspiracies is a severe criminal activity. Any person or medical practitioner who defraud or schemes to execute Medicaid or Medicare Fraud conspiracies is severely penalized or punished if found guilty and responsible for the criminal action. If charged for defrauding Medicaid or Medicare or violating the False Claim Act, you must seek legal assistance or representation to pursue and protect your rights. If you receive the finest legal representation, advice, or assistance, you get positive results in your case. Hire us immediately if you want the most excellent legal representation, advice, or assistance to achieve positive results in your case. Health Care Fraud Group has a highly trained team of skilled criminal attorneys and health care fraud defense attorneys with excellent experience and matchless case win history. The team is highly conversant and understands the need to prove innocence after the indictment of any offense, like any of the crimes mentioned above. Call us now or anytime at 888-402-4054 for any legal assistance, advice, or representation you may need.
