May 18, 10

NEWS / Essex County Pharmacist and His Son Sentenced for Defrauding Medicaid of More Than $700,000

TRENTON - Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that an Essex County pharmacist and his son were sentenced today for defrauding the Medicaid program of almost three quarters of a million dollars.

According to Acting Insurance Fraud Prosecutor Riza Dagli, Herbert Brandt, 78, of Verona, the owner of Pharmacy of America in East Orange, was sentenced to three years in state prison by Superior Court Judge Joseph C. Cassini III in Essex County. Brandt’s son, Douglas Brandt, 50, of Verona, who operated Pharmacy of America, was also sentenced to three years in state prison.

The defendants were ordered to pay restitution to the Medicaid program and a civil penalty totaling $1.1 million. They will be excluded from the Medicaid program for eight years. Under the plea agreement, Herbert Brandt also entered into a consent agreement with the Board of Pharmacy to surrender his license to practice pharmacy.

The two men pleaded guilty on Sept. 23, 2009 to accusations charging them with second-degree health care claims fraud. Douglas Brandt also pleaded guilty to third-degree witness tampering. Douglas Brandt was sentenced today to three years in prison on the health care claims fraud charge, and three years on the witness tampering charge, with the sentences to run concurrently.

“Any pharmacist who serves Medicaid beneficiaries knows firsthand the vital role the program plays in providing medicines to those who otherwise could not afford them,” said Attorney General Dow. “It is outrageous that a licensed pharmacist would steal from the program and induce vulnerable customers to barter away medicines they need.”

In pleading guilty, the defendants admitted that, through Pharmacy of America, they submitted approximately 2,986 false claims for payment to Medicaid in the total amount of $741,842. Defendants admitted that they paid beneficiaries cash, in lieu of receiving their AIDS/HIV and other expensive medications. In turn, Pharmacy of America billed and was paid by the Medicaid program for medications that were never ordered or dispensed. Douglas Brandt also admitted that he attempted to coerce a witness, John Meo, to withhold testimony.

The defendants were charged as a result of Operation PharmScam, an ongoing investigation targeting Medicaid fraud that has been conducted by the Office of the Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit, the Jersey City Police Department and the U.S. Food and Drug Administration’s Office of Criminal Investigations. To date, 13 defendants, including a clinic owner, pharmacist, pharmacy technician and Medicaid beneficiaries, have pleaded guilty for their roles in the scheme and have been sentenced or are pending sentencing.

“The Medicaid program loses millions of dollars to fraud every year in New Jersey, and far too frequently licensed professionals are involved,” said Acting Insurance Fraud Prosecutor Dagli. “We will continue to make these cases a top priority in order to bring dishonest licensees to justice and prevent the loss of taxpayer funding for this crucial program.”

On January 24, 2008, arrest warrants were issued for 14 persons as part of the investigation into the Pharmacy of America and other pharmacies which were buying prescriptions from patients and billing the Medicaid Program for medicines that were never provided. At the same time, the state began an asset forfeiture case by executing seizure orders for numerous assets, including more than $660,000 in assets of the Brandts that will be used, pursuant to settlement of the forfeiture case, to pay the criminal restitution and civil penalty. A full list of defendants charged is in the Jan. 24 press release at www.njpublicsafety.com.

The investigation has been conducted for the OIFP Medicaid Fraud Control Unit by Detective Danielle Han, Detective Joseph Jaruszewski, Detective Jacqueline Latty, Detective Kevin Gannon and Sgt. Fred Weidman, with assistance from Auditor Cleair Budhu, Technical Assistant B’leia Williams and Division of Taxation Auditor Kevin Curry. Deputy Attorneys General Sherry Wilson and Debra Conrad are leading the prosecutions, with assistance from Deputy Attorney General Erik Daab, Deputy Chief of the Medicaid Fraud Control Unit, and Deputy Attorneys General William Hoyman, Cynthia Vazquez and Linda Rinaldi. Wilson and Conrad represented the state at the sentencing.

Deputy Attorney General Carol Stanton Meier, Sgt. James Wrightson and Analyst Bethany Schussler handled the asset forfeiture action for the Division of Criminal Justice.

Attorney General Dow also credited the investigators and officers with the Jersey City Police Department and the U.S. FDA who have conducted Operation PharmScam. She further credited all of the Division of Criminal Justice investigators and other law enforcement agencies that assisted in the arrests and raids and other aspects of the ongoing investigation.

http://www.nj.gov/oag/newsreleases10/pr20100517b.html

Tags: consent agreement, criminal investigation,