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N.J. guidance counselor admits role in health benefits fraud

A Pleasantville High School guidance counselor pleaded guilty to conspiracy charges for his role in a multimillion-dollar scheme to defraud the federal health care benefits program. Michael Pilate said he submitted phony prescriptions to collect kickbacks.

U.S. District Courthouse in Camden
U.S. District Courthouse in CamdenRead moreAmy S. Rosenberg

A Pleasantville, N.J. guidance counselor pleaded guilty Thursday to his role in a wide-ranging conspiracy that authorities say defrauded the federal health-care benefits program of more than $50 million.

Michael Benson Pilate, 39, is the 13th person to admit guilt in a scheme involving teachers, firefighters, pharmaceutical sales representatives, and doctors at the Shore and other parts of South Jersey.  Pilate faces up to 10 years in prison. He also could be ordered to pay up to $3.5 million in restitution, the amount prosecutors say the government lost when he filed fake claims for pain, anti-fungal, and libido creams, and recruited others to profit from the public health benefits plan.

Authorities said Pilate was paid $500 in kickbacks for each medically unnecessary prescription filled by a Pennsylvania pharmacy that produced an array of medicinal and vitamin creams and shipped them to New Jersey claimants.  In all, they said, he was paid nearly $400,000. The pharmacy, which prosecutors did not identify, was paid more than $50 million by the health plan's administrator for the prescriptions, which were mailed in 2015 and 2016, the U.S. Attorney's Office said.

In August, Matthew Tedesco, a Linwood pharmaceutical representative, pleaded guilty in the conspiracy and admitted to being the ringleader. Authorities said he received more than $11 million from the pharmacy and passed some of it along to other conspirators.  In September, John L. Gaffney,  a Linwood doctor, also admitted guilt, saying he wrote phony prescriptions for patients he never saw.

On Thursday, Pilate appeared before U.S. District Judge Robert B. Kugler in Camden.

In court, Assistant U.S. Attorney David Walk described Pilate as a major player in the conspiracy.

Pilate's attorney, Teri S. Lodge, disputed that. She said Pilate still works for the town school district.

Pilate said little at the hearing.  When the judge asked about his mental state, to determine Pilate's competency in entering the plea, Pilate said that he fully understood the terms.  "Quite honestly, this situation is extremely depressing," he said, adding that he may consider counseling.

He was released on $100,000 unsecured bail to await sentencing.

Pilate declined to comment after the hearing.  His sentencing is scheduled for May 11.