Former Co-Owners of New Jersey Marketing Company Sentenced to Prison in $8.8 Million Compounded Prescription Drug Scheme
NEWARK, N.J. – The former co-owners of a New Jersey marketing company were each sentenced today to 12 months and one day in prison for their roles in a scheme to defraud public and private health benefits programs of at least $8.8 million for the billing of medically unnecessary compounded prescriptions, U.S. Attorney Philip R. Sellinger announced.
Lisa Curty, 46, of Staten Island, New York, and Christine Myers, 38, of Phillipsburg, New Jersey, each previously pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to separate informations charging them with conspiracy to commit health care fraud. U.S. District Judge Katharine S. Hayden imposed the sentencing today in Newark federal court.
“These two defendants are just the latest in a long line of schemers who took advantage of publicly and privately funded insurance plans, raiding them for millions of dollars in fraudulent reimbursements for compounded medications. We will continue to prosecute those who take advantage of our health care system to generate illicit income.”
“The volume of cases involving compound medication fraud has moved beyond frustrating for law enforcement, with an arrest, conviction or sentencing happening almost every other day in New Jersey,” FBI – Newark Special Agent in Charge James E. Dennehy said. “The fraudsters committing these crimes aren't paying attention to the fact that everyone doing the same thing is going to federal prison. This is the FBI and our law enforcement partners screaming in the town square, you will be next if you continue to break the law.”
“Protecting the integrity of TRICARE, the healthcare system for our military members and their families, is a top priority of the Defense Criminal Investigative Service (DCIS), the law enforcement arm of the Department of Defense Office of Inspector General,” Acting Special Agent-in-Charge Brian J. Solecki, DCIS Northeast Field Office, said. “Schemes to bill TRICARE for medically unnecessary services place a great burden on the TRICARE program. We will continue to work with the U.S. Attorney’s Office and our law enforcement partners to ensure that individuals who engage in fraudulent activity, at the expense of the U.S. military, are investigated and prosecuted.”
According to documents filed in this case and statements made in court:
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 ingredients in the prescription.
Between February 2015 and February 2017, Curty and Myers participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.
Curty and Myers exploited this opportunity by creating a New Jersey marketing company and hiring sales representatives to target individuals who had insurance plans that covered compounded medications. The sales representatives then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. The individuals were then directed to certain telemedicine companies, which the marketing company or its affiliates paid, to receive the prescriptions.
Once the prescriptions were written, they were filled by certain compounding pharmacies with which the marketing company conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay the marketing company a percentage of the reimbursement amount. As owners of marketing company, Curty and Myers retained a portion of the payment and provided a “commission” payment to the relevant sales representative.
In addition to the prison term, Judge Hayden sentenced the two defendants to two years of supervised release and ordered them to pay $8.2 million in restitution.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge Dennehy in Newark, and the U.S. Department of Defense Office of Inspector General, Defense Criminal Investigative Service, under the direction of Acting Special Agent in Charge Solecki, with the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Jordann Conaboy of the Opioid Abuse and Prevention Unit in Newark.
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