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Hudson County Crime Network Dealing in Prescription Pain Pills lead to Arrests of Doctors and Pharmacists October 20, 2009

Posted by jefhenninger in News.
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This is a huge case that will require a lot of good attorneys to work very quickly.  Should be very interesting to follow it.  This press release is quite detailed and should provide a lot for each attorney to chew on.  However, I’m sure at least some of the attorneys will do nothing as they wait to just sell out their client.  I hate to sound so cynical, but it seems like I hear about attorneys screwing over their clients just about every day.

TRENTON – Attorney General Anne Milgram today announced the arrests of 13 people, including doctors and pharmacists, in the takedown of a major criminal narcotics network in Hudson County that was responsible for the black market distribution of thousands of prescription pain pills such as OxyContin and Percocet.

 pre=””>The arrests stem from Operation MedScam, a year-long investigation by the Medicaid Fraud Control Unit of the Division of Criminal Justice’s Office of Insurance Fraud Prosecutor and the Jersey City Police Department’s Special Investigation Unit. The ongoing investigation uncovered a criminal network that was obtaining fraudulent narcotics prescriptions from doctors and filling them at various pharmacies. Medicaid and private insurers were being billed for phony prescriptions and doctor visits.

The arrests made late yesterday and today (Oct. 19 and 20), include three alleged ringleaders: Robert Silverman, 43, of Jersey City; Louis Lisi, 34, of Union City; and Brian Kelly, 48, of Hoboken. Silverman allegedly ran his own ring, while the other two allegedly worked together. However, the rings allegedly used the same pharmacists to obtain narcotics and at least one of the same doctors to write prescriptions. They also sometimes supplied each other with pills. During the arrests, more than 1,000 pills were recovered from the individuals and locations searched.

The leaders allegedly paid Medicaid beneficiaries to obtain fake prescriptions for painkillers and other drugs from two doctors, Dr. Clifton Howell, 53, of West Orange, whose medical practice is at 550 Newark Ave., Jersey City, and Dr. Magdy Elamir, 56, of North Saddle Brook, whose practice is at 550 Summit Ave., Jersey City. Both of those doctors were arrested.

Two pharmacists were arrested. They are Babak Bamdad, 41, pharmacist in charge at Tucker Drugs, 1000 Washington St., Hoboken, and Amir Tadros, 32, pharmacist in charge at Five Corners Pharmacy, 591 Summit Ave., Jersey City.

Six other individuals were arrested as alleged street-level distributors for the narcotics rings. They are Joseph Burkhardt, 50, of Jersey City; Michele J. Oliver, 41, of Wallington; John Bussanich, 23, of Cliffside Park; Danny Reed, 25, of Toms River; Marty Taraboccia, 25 of Fairview; and Jack Kennedy, 28, of Keyport.

The rings allegedly distributed the prescription pain pills throughout Hudson County and other parts of the state, including Bergen, Ocean, Morris and Monmouth counties. A single 30 milligram OxyContin pill, known as a “blue,” typically sells for $10 to $20 on the street, while a 10 milligram Percocet pill sells for $5 to $8.

The arrests were made by detectives and officers of the Division of Criminal Justice and Jersey City Police Department.

“Operation MedScam targeted and uncovered every aspect of these narcotics rings, from the ringleaders, to the doctors who wrote phony prescriptions, to the pharmacists who filled them, to the distributors who sold the pain pills on the street,” said Director Gramiccioni. “These arrests are the result of a highly effective partnership between our Medicaid Fraud Control Unit and the Jersey City Police Department.”

Jersey City Chief of Police Thomas Comey stated “I would like to commend everyone involved in Operation MedScam. Greed and the illegal narcotics trade know no boundaries. This operation shows the commitment by law enforcement to arrest and prosecute offenders regardless of their social, professional or economic standing. Operation MedScam is further proof that cooperation among the law enforcement community can produce great results.”

The investigation revealed that the two doctors, Howell and Elamir, were allegedly writing prescriptions for Medicaid beneficiaries in exchange for cash or the ability to bill Medicaid, without requiring medical need or a medical examination. Howell allegedly demanded $75 per visit, while Elamir allegedly demanded $50. In other instances, the doctors allegedly wrote prescriptions for narcotics based only on names provided to them by the ringleaders.

The Medicaid beneficiaries would ask for prescriptions for narcotics as well as non-narcotic medications, typically high-priced maintenance drugs such as asthma or allergy medications. The doctors allegedly wrote both the narcotic and non-narcotic prescriptions. The Medicaid beneficiaries took the prescriptions to the pharmacies to obtain the narcotics, or in some instances, Silverman or other ring members obtained the narcotics themselves.

The two pharmacists who were arrested, Bambad and Tadros, allegedly filled fraudulent narcotics prescriptions for the criminal network. They allegedly demanded cash for the pain pills because they did not want to bill Medicaid or private insurers for narcotics, which are closely monitored. However, they would provide the painkillers at a discount or without charge if they were also given prescriptions for other non-narcotic medicines, such as the high-priced asthma medication Advair. They allegedly billed Medicaid and private insurers for the non-narcotic prescriptions without ever dispensing the medications.

“As we have seen historically, this type of health care fraud and street level distribution doesn’t occur without the involvement of the medical providers,” said Acting Insurance Fraud Prosecutor Riza Dagli. “Criminal activity by doctors, pharmacists, and other professionals who are in a position of public trust is particularly egregious and is a priority for this office.”

Investigators executed search warrants at the homes of Silverman and Lisi. Searches of the doctors’ offices, Tucker Pharmacy and Five Corners Pharmacy were underway.

Bank accounts containing more than $1 million were seized today. They were seized in connection with an action filed by the Division of Criminal Justice to seize and forfeit assets as alleged proceeds and instruments of the defendants’ criminal activities, including residential and commercial real estate, vehicles, bank accounts and safe deposit boxes

In addition, approximately $7,000 in cash was seized from Lisi and his house, along with several falsely labeled prescription bottles, a quantity of OxyContin pills, and several fraudulent prescriptions for narcotics. Another $8,000 was seized from a safe deposit box in Lisi’s name. Approximately $20,000 was seized at Silverman’s house, along with crack cocaine, a quantity of OxyContin pills, and several falsely labeled prescription bottles.

The defendants were charged as follows:

Alleged Leaders

  • Robert Silverman – Distribution of Controlled Dangerous Substance (CDS) Within 500 Feet of Certain Public Property (2nd degree), Distribution of CDS (3rd degree).
  • Louis Lisi – Distribution of CDS Within 500 Feet of Certain Public Property (2nd degree), Distribution of CDS (3rd degree) (2 counts), Endangering the Welfare of a Child (2nd degree).
  • Brian Kelly – Distribution of CDS Within 500 Feet of Certain Public Property (2nd degree), Distribution of CDS (3rd degree), Distribution of CDS Within 1,000 Feet of School (3rd degree).

Doctors

  • Dr. Clifton Howell – Distribution of CDS (2nd degree), Health Care Claims Fraud (2nd degree), Medicaid Fraud (3rd degree).
  • Dr. Magdy Elamir – Distribution of CDS (2nd degree), Health Care Claims Fraud (2nd degree), Medicaid Fraud (3rd degree).

Pharmacists

  • Babak Bamdad – Health Care Claims Fraud (2nd degree), Medicaid Fraud (3rd degree).
  • Amir Tadros – Health Care Claims Fraud (2nd degree), Medicaid Fraud (3rd degree).

Alleged Drug Distributors

Burkhardt and Kennedy were each charged with Distribution of CDS Within 500 Feet of Certain Public Property (2nd degree), Distribution of CDS (3rd degree), and Distribution of CDS Within 1,000 Feet of School (3rd degree). Reed and Oliver were each charged with Conspiracy to Distribute CDS (3rd degree). Taraboccia and Bussanich were each charged with Possession of CDS with Intent to Distribute (2nd degree).

Additional arrests are expected.

Red Bank, NJ Dentist Marc Weber Charged With Fraud June 15, 2009

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Marc Weber of Red Bank, a licensed dentist, his office manager, Jennifer Barbers, of Manalapan, and Weber’s dental practice, Whitehouse Dental Office, P.A. (d/b/a Weber Dental Associates), located on Broad Street in Red Bank were charged with second-degree conspiracy and second-degree health care claims fraud, as well as Medicaid fraud, theft by deception, theft by unlawful taking, and theft of identity, all in the third-degree.

There are two sets of allegations here.  According to the press release, the first set of charges allege that:

between Jan. 1, 2004, and June 30, 2008, Weber and Barbers, who are now married to each other, stole more than $3,565 from Medicaid for services that were never rendered and/or completed. According to the indictment, Weber and Barbers regularly instructed another employee who handled the billing for the dental practice, to submit claims to Medicaid for pre-approved work prior to the completion of the pre-approved work. Barbers instructed the same employee to submit claims to Medicaid for a patient’s entire treatment plan on the patient’s first office visit, even if the patient did not return to the office to complete the treatment. She also allegedly instructed an employee to bill Medicaid for crowns and dentures on the patient’s initial visit rather than when or if the work was completed.

That part is not too bad from a defense perspective. Clearly there is an issue with an employee who is not charged.  Thus, it will be difficult to prove that this was not just a disgrunteled employee acting on her own.  Furthermore, the dollar amount is rather low.  If this was it, I would not be worried.

The second part of the case is more serious.  It alleges that:

Barbers allegedly convinced patients to take out loans for dental procedures using specific loan providers, even when the procedures were covered by insurance. She then allegedly processed the loans without the patients’ authorization, and collected payments from the loan providers even if the patients decided not to have the dental work performed. As a result of Barbers’ alleged actions, the patients were responsible for paying back the loans. According to the indictment, Barbers obtained the identifying information of three patients from the loan applications and assumed the identity of those patients in order to obtain the proceeds of the loans. It is alleged that Weber, Barbers and the dental practice fraudulently collected almost $30,000 from the proceeds of these loans.

This sounds bad, but the good thing is that it was only three people.  I am sure there is more to this story.  However, everything here is on the line so I hope they have great attorneys.  I would want to interview these patients right away.  Their testimony will go a long way in determining what happens with the case.  If there are other patients that are similarly situated but not part of the case, I would interview them as well.

Press release is here.

NJ chiropractor indicted for fraud May 12, 2009

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Sean Nisivoccia, a suspended chiropractor has been from Clifton, New Jersey has been indicted for attempted theft by deception, theft by deception, and four counts of health care claims fraud, all second-degree offenses.  The State alleges that between April 2000 and June 2004 he  fraudulently billed several insurance companies more than $230,000 by creating the false impression that he personally performed nerve conduction studies or nerve conduction velocity (NCV) tests on his patients and that he was qualified to perform such tests, when, in fact, he did not personally perform such tests, nor was he qualified to perform them.

This is a classic case that probably could have been prevented.  The case was referred to the Office of the Insurance Fraud Prosecutor in New Jersey by one of the insurance companies.  I would bet that Nisivoccia was contacted by the insurance company before law enforcement was involved.  However, I think he blew them off as they filed suit against him. 

I’m sure this whole case could have been resolved if he would have called an attorney from the start.  How do I know?  I’ve done it in my own practice.  The AG’s office is pretty good with working cases out pre-indictment.   

Press release is here.