Category: Bayville

Bayville, NJ and Delray Beach, FL Men Charged In $2.5 Million Healthcare Fraud and Unlawful Disclosure Of Patient Information

Keith Ritson, 40, of Bayville, New Jersey, and Frank Alario, M.D., 63, of Delray Beach, Florida, are charged with conspiracy to commit health care fraud and wire fraud, as well as individual acts of health care fraud and wire fraud. Both men are charged with a second conspiracy to wrongfully obtain and disclose patients’ individually identifiable health information. Alario is additionally charged with making false statements in a health care matter, and Ritson faces additional charges of conspiring to commit money laundering and substantive counts of money laundering.

September 10, 2020

CAMDEN, NJ –A federal grand jury has returned a 16-count indictment charging a physician and pharmaceutical sales representative with defrauding New Jersey state health benefits programs and other insurers out of more than $2.5 million by submitting fraudulent claims for medically unnecessary prescriptions, as well as unlawfully obtaining and disclosing individually identifiable patient health information protected by HIPAA, U.S. Attorney Craig Carpenito announced.

Keith Ritson, 40, of Bayville, New Jersey, and Frank Alario, M.D., 63, of Delray Beach, Florida, are charged with conspiracy to commit health care fraud and wire fraud, as well as individual acts of health care fraud and wire fraud. Both men are charged with a second conspiracy to wrongfully obtain and disclose patients’ individually identifiable health information. Alario is additionally charged with making false statements in a health care matter, and Ritson faces additional charges of conspiring to commit money laundering and substantive counts of money laundering.

The cases are assigned to U.S. District Judge Robert B. Kugler in Camden. The indicted defendants are expected to make their initial appearances before U.S. Magistrate Judge Ann Marie Donio in Camden federal court via videoconference on Sept. 10, 2020.

According to the indictment:

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredient.

The conspirators recruited individuals to obtain very expensive and medically unnecessary compounded medications from a Louisiana pharmacy, Central Rexall Drugs Inc. (Central Rexall). The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, and vitamin combinations – would be reimbursed by insurance providers in amounts in the thousands of dollars for a one-month supply.

The conspirators also learned that some New Jersey state and local government and education employees, including teachers, police officers, and state troopers, had insurance coverage for these particular compound medications. An entity referred to in the indictment as the “Pharmacy Benefits Administrator” provided pharmacy benefit management services for the State Health Benefits Program, which covers qualified state and local government employees, retirees, and eligible dependents, the School Employees’ Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents, and other insurance plans. The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey or the other insurance plans for the amounts paid.

In the first charged conspiracy, Ritson recruited individuals with prescription drug benefits administered by the Pharmacy Benefits Administrator to receive unnecessary compound medication prescriptions, which Alario signed without examining, speaking with, or establishing a physician-patient relationship with the patient. Alario sent a form to Central Rexall’s compliance program in which he falsely attested that he saw and spoke with patients in person and established a physician-patient relationship prior to prescribing Central Rexall medications. Ritson and Alario earmarked established patients of Alario’s medical practices who had insurance that covered the expensive compound medications. Alario prescribed the medications not for the patient’s need or request, but for the benefits he and Ritson stood to gain. The scheme caused the Pharmacy Benefits Administrator to pay over $2.5 million for the fraudulent prescriptions. For his role in the scheme, Ritson received a percentage of the amount that Central Rexall received from the Pharmacy Benefits Administrator for the medications, and Alario benefitted by receiving free meals, entertainment, travel, and other remuneration from Ritson.

The indictment also charges Ritson and Alario with a separate scheme to wrongfully obtain and disclose individually identifiable patient health information for their own personal gain and commercial advantage. As a sales representative not affiliated with Alario’s medical practices, Ritson should not have had access to patients’ confidential information. However, since only certain insurances covered the compound medications promoted by Ritson, the defendants accessed patient files and other identifying information to ascertain patients’ insurance coverage. On at least one occasion, Ritson and Alario jointly accessed patient information on an office computer for the purpose of determining insurance coverage for the medications. Ritson also had access to parts of Alario’s office where patient information was stored or could be heard and observed, including employee-restricted areas with medical files, fax machines, and computers. Ritson was also frequently present in exam rooms during patient appointments with Alario for the purpose of promoting the compound medications, at which time Alario commonly introduced Ritson to his patients as his “nephew” or gave the impression that Ritson was affiliated with the medical practice. By being present during the patient exams, Ritson had access to patients’ medical files and protected health information.

The health care fraud and wire fraud conspiracy count carries a maximum potential penalty of 20 years in prison; each wire fraud count carries a maximum potential penalty of 20 years in prison; each health care fraud count carries a maximum penalty of 10 years in prison; the false statement count and the conspiracy to wrongfully obtain or disclose individually identifiable patient health information count each carry a maximum penalty of five years in prison; and the money laundering charges carry a maximum penalty of 10 years in prison. All of the offenses are also each punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.

U.S. Attorney Carpenito credited agents of the FBI’s Atlantic City Resident Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; IRS – Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; and the U.S. Department of Labor, Office of Inspector General, New York Region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to the indictment. He also thanked the Division of Pensions and Financial Transactions in the State Attorney General’s Office, under the direction of Attorney General Gurbir S. Grewal and Division Chief Aimee Nason, for its assistance in the investigation.

The government is represented by Assistant U.S. Attorneys Christina O. Hud and R. David Walk Jr. of the U.S. Attorney’s Office in Camden.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

20-284

Defense counsel:
Alario: Kevin Marino Esq., Chatham Township, New Jersey
Ritson: Eric Kanefsky Esq., Newark

Pemberton and Bayville, NJ Men Sentenced to Prison on Charges Resulting from Undercover Sweep “Operation Open House” Targeting Child Predators on Social Media

September 9, 2020

TRENTON, NJ (MERCER)–Attorney General Gurbir S. Grewal announced that two men were sentenced to state prison today for attempting to lure underage girls they met on social media to meet for sexual encounters.  The “girls” in reality were undercover detectives participating in “Operation Open House,” a multi-agency undercover operation in September 2018 led by the Attorney General’s Office that resulted in arrests of 24 men who allegedly were using social media to lure underage girls and boys for sexual activity.

William Singleton, 25, of Pemberton, N.J., and Charles Schlottfeld, 28, of Bayville, N.J., were each sentenced today to four years in state prison by Superior Court Judge Guy P. Ryan in Ocean County.  Each man pleaded guilty to second-degree luring, Singleton on Feb. 3, 2020, and Schlottfeld, on July 22, 2020.  Both men will be required to register as sex offenders under Megan’s Law and will be subject to parole supervision for life.

Deputy Attorney General Thomas Huynh prosecuted Singleton and Deputy Attorney General Rachael Weeks prosecuted Schlottfeld for the Division of Criminal Justice Financial & Cyber Crimes Bureau. 

Both men were arrested in September 2018 during Operation Open House.  In each case, an undercover detective with the New Jersey Regional Internet Crimes Against Children (ICAC) Task Force encountered the defendant on social media, and the defendant, believing the undercover detective was a 14-year-old girl, asked the “girl” to meet him for sexual activity.  Both Singleton and Schlottfeld discussed in detail the sexual acts they would perform with the underage girl.  Singleton was arrested on Sept. 7, 2018, and Schlottfeld was arrested on Sept. 9, 2018.  They were arrested when they arrived at the undercover house in Toms River, where dozens of officers and agents participating in Operation Open House were prepared to arrest offenders and process any evidence seized. 

“With these prison sentences, we are sending a strong message to predators who think they can freely hunt for vulnerable children online,” said Attorney General Grewal.  “We will continue to identify and arrest these offenders because there is no higher priority for us than the safety of our children.  But at a time when more young people are online as a result of the pandemic, we especially need parents and guardians to do their part by warning children that these dangerous predators use popular social media services, gaming platforms, and chat apps to target unsuspecting victims.”

“We will never cease in our efforts to arrest those who use the internet and social media to sexually exploit children, either by distributing child sexual abuse materials or by grooming children to sexually abuse or assault,” said Director Veronica Allende of the Division of Criminal Justice.  “We want predators like Singleton and Schlottfeld to know the child they stalk online may turn out to be a law enforcement officer.”

In addition to investigating cyber tips from the National Center for Missing and Exploited Children, members of the New Jersey State Police ICAC Unit, the Division of Criminal Justice Financial & Cyber Crimes Bureau, and the New Jersey ICAC Task Force routinely conduct undercover chat investigations on social media platforms leading to arrests of hands-on offenders and defendants seeking to lure children.  They also conduct proactive investigations to apprehend offenders by monitoring peer-to-peer file-sharing networks and identifying the IP addresses of individuals sharing child sexual abuse materials.

Attorney General Grewal and Director Allende urge anyone with information about the distribution of child sexual abuse materials on the internet – or about suspected improper contact by unknown persons communicating with children via the internet or possible exploitation or sexual abuse of children – to please contact the New Jersey Internet Crimes Against Children Task Force Tipline at 888-648-6007.

Defense Attorneys

For Singleton: Assistant Deputy Public Defender Marissa K. DeAnna, Ocean County

For Schlottfeld: Alexandra Nieves-Martinez , Esq., Berkeley Township, N.J.