A Trenton doctor today admitted his role in two separate conspiracies for defrauding New Jersey state health benefits programs and accepting kickbacks in exchange for referring laboratory work, U.S. Attorney Craig Carpenito announced.
Officials say that a pharmaceutical representative admitted his role in a separate health care fraud conspiracy and to obstructing justice by telling witnesses to lie to the grand jury investigating the scheme.
Dr. Daniel Oswari, 48, of Bordentown, New Jersey, pleaded guilty today before U.S. District Judge Robert B. Kugler in Camden federal court to two counts of an indictment charging him with conspiracy to commit health care fraud and wire fraud (Count One) and conspiracy to violate the Anti-Kickback Statute and the Travel Act (Count 23), officials state.
Mark Bruno, 45, of Northfield, New Jersey, also pleaded guilty before Judge Kugler to an information charging him with conspiracy to commit health care fraud and obstruction of justice, officials report.
According to officials, Oswari was charged in October along with Steven Monaco, Michael Goldis, and Aaron Jones, and charges remain pending against those three defendants.
According to documents filed in these cases and statements made in court:
Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Officials state that 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.
Officials report that between January 2014 and April 2016, Oswari participated in a conspiracy that discovered that certain insurance plans paid for certain prescription compound medications – including vitamins and pain creams – from a Louisiana pharmacy, identified in the indictment as the “Compounding Pharmacy 1,” and a Pennsylvania pharmacy, identified in the indictment as “Compounding Pharmacy 2.”
The conspirators targeted patients with these insurance plans that provided coverage for the compound medications, particularly New Jersey state and local government and education employees, according to officials.
Officials say that 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 paid prescription drug claims and then billed the State of New Jersey or the other insurance plans for the amounts paid.
Oswari and members of his staff tried to persuade patients to receive the prescription compound medications, even if the patients did not have a medical necessity for the medications, officials report.
Oswari signed printed prescription forms from Compounding Pharmacies 1 and 2 that had pre-selected the highest number of refills to obtain the highest possible insurance reimbursement. Oswari signed some prescriptions without seeing or evaluating the individuals, including individuals who were not his patients. Oswari signed approximately 285 prescriptions for compounded medications, and the Pharmacy Benefits Administrator paid Compounding Pharmacies 1 and 2 approximately $1.9 million for the prescriptions he signed, officials state. In exchange for signing the prescriptions, Oswari received cash kickbacks.
According to officials, Oswari also pleaded guilty to a separate conspiracy to take kickbacks for referring laboratory work and signing prescriptions.
Oswari had a laboratory hire his medical assistant as a phlebotomist. The medical assistant continued to work for Oswari, but the laboratory paid her salary for over two years. In return, Oswari referred his blood and urine samples to the laboratory for testing, officials report. This lab work was insured by Medicare, New Jersey Medicaid, and other insurance companies.
Officials say that Bruno worked for a company that marketed compounded medications and received a percentage of the insurance payments.
Bruno introduced a doctor to the company and received a percentage of the payments for prescriptions that the doctor wrote. Bruno and others paid the doctor to reward him for signing prescriptions, officials state.
Bruno recruited individuals covered by New Jersey state insurance plans because he knew that those plans paid thousands of dollars for certain compounded medications. Bruno paid several of these individuals to see his doctor and receive prescriptions for compounded medications. Bruno received $68,872 from the company and caused $524,935 in losses, according to officials.
Bruno learned in 2018 that the federal grand jury was investigating him, officials say. In 2019, two individuals paid by Bruno to receive compounded medications told him that they had received subpoenas to testify in the grand jury, and another two told Bruno that they were contacted by the FBI.
According to officials, Bruno told the first two to lie in the grand jury and deny that he paid them. Bruno told the other two to tell the FBI that he had not paid them.
The health care fraud and wire fraud conspiracy count to which Oswari pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine or twice the gain or loss from the offense, officials state.
The kickbacks conspiracy count to which Oswari also pleaded guilty carries a maximum penalty of five years in prison and a $250,000 fine or twice the gross gain or loss from the offense, officials report.
Officials say that the heath care fraud conspiracy and obstruction of justice charges to which Bruno pleaded guilty each carry a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense.
Sentencing for Oswari is scheduled for March 23, 2020, and sentencing for Bruno is scheduled for March 24, 2020.