12th person enters guilty plea in $50 million South Jersey health-care fraud
The Galloway, N.J., man recruited teachers, firefighters, and police officers to obtain pricey and unnecessary medications that were billed to the state.
For over a year, construction estimator Timothy Frazier took on a new side job — persuading teachers, firefighters, and police officers across South Jersey to buy pricey and unnecessary medications.
On Friday, Frazier, 42, became the 12th person to plead guilty in a scheme that defrauded two state health-care benefits programs out of $50 million by recruiting individuals to obtain compound medications they did not need, federal prosecutors said in a release on Friday.
Compound medications are specially mixed for those allergic to particular ingredients in regular prescriptions and are more expensive. A month's supply of some compound medications — including pain, anti-fungal, and libido treatments — brings reimbursement for thousands of dollars.
The Galloway man was one of four drug representatives who persuaded public employees to obtain the costly compound medications from a pharmacy outside New Jersey in an effort to take advantage of two state benefit plans that cover such prescriptions: the State Health Benefits Program and School Employees' Health Benefits Program.
From January 2015 to April 2016, "Frazier secured insurance information from the individuals and passed it along to a conspirator, who had a doctor sign prescriptions without examining the individuals," according to the statement from the U.S. Attorney's Office for New Jersey.
A pharmacy benefits administrator then paid the claims and billed the state. Frazier received a portion of the profits made off the unneeded prescriptions and paid recruiters under him, prosecutors said.
Frazier received $145,000 for his role in the scheme. As part of the plea agreement, he must forfeit the money and pay $800,000 in restitution.
Lawyer Robert G. Stahl, representing Frazier, called his client "a good, hard-working" man who regrets his role in the scheme. He said Frazier had no experience in pharmaceutical sales before 2015.
Frazier "accepts full responsibility for his actions," Stahl said. "He looks forward to putting this episode behind him."
Frazier's sentencing is scheduled for March 29. He faces up to 10 years in prison.
In July, a federal grand jury subpoenaed the Margate, Ventnor, and Atlantic City municipal governments for lists of city employees with state health benefits.