NJ: Doc, Drug Store Accused Of $10 Million In Workers’ Comp Fraud

Liz Carey

Wallington, NJ (WorkersCompensation.com) – Federal agents say a doctor was forced to write prescriptions for drugs and pain creams to defraud the US government out of $10 million.

In a statement, US District Attorney Craig Carpenito said Dr. Mark Filippone, 71, and three others were engaged in a scheme to allow hundreds of former U.S. Postal Office workers to file for permanent disability claims for patients allegedly injured on the job. The plot started as early as 2015.

According to court documents, Joseph Miller, 33, of Fort Lee, NJ; and Marlene Vangelas, 58 of River Vale, NJ, bought Filippone’s office for well above market value. Once they owned the building, the complaint said, they, along with Zachary Ohebshalom, 33, of Edgewater, NJ, were able to force Filippone to continue “to use the premises, for which he routinely failed to pay rent,” Carpenito said.

Using the property as leverage, the three were able to force Filippone to submit bogus medical records regarding on-the-job injuries for postal workers. In some cases, postal workers from as far away as Georgia and Florida came to see Filippone for disability claims from injuries they claim to have received on the job.

In addition, the three men forced Filippone to prescribe pain creams of dubious effectiveness to his patients. Many of those patients didn’t know why they were prescribed the medication and some refused to use it.

“All 30 patients interviewed stated, in sum and substance, that, at the time they received the pain cream in the mail from the Fairlawn Pharmacy, they were not aware that FILIPPONE had prescribed this medication for them, did not know why he had prescribed the pain cream, and believed that the amount of the pain cream was excessive,” the US Attorney’s office said in its complaint. “Of the 30 patients interviewed, approximately 11 confirmed that they tried the cream once or twice only and then discontinued use either because it was ineffective or because it caused a troublesome skin reaction.”

The pain creams were a concoction created by Miller, Vangelas and Ohebshalom, investigators said.

“The pain creams were formulated from two or three ingredients, including a drug with analgesic properties and a cream base. MILLER, VANGELAS, and OHEBSHALOM at the Fairlawn Pharmacy- rather than FILIPPONE – created the formulations of the pain creams based not on medical necessity or medical judgment, but rather based solely on the most lucrative reimbursement that MILLER, VANGELAS, and OHEBSHALOM could obtain based on OOL-OWCP health insurance coverages,” according to the complaint against the men.

In order to find out which ingredients the cream needed to contain, the three men directed pharmacists at Fairlawn Pharmacy to enter “test claims” to the Department of Labor’s Office of Workers’ Compensation Program in order to evaluate which ingredients would be the most lucrative.

“For example, on or about February 9, 2018, a recording made at the Fairlawn Pharmacy captured one of the pharmacists describing an incident in which MILLER and OHEBSHALOM told the pharmacist, “try this, try this, try this … select a patient, select a doctor, put in the NOC number, see what the reimbursement is, and then void it out, and there’s a whole list . . . just to see what the highest reimbursement is,” the complaint stated.

Those prescriptions were fed through Jiffy Scripts to the Fairlawn pharmacy, where pharmacists filled the prescriptions and billed the federal government’s workers compensation program for the drugs. Miller, business manager for Fairlawn Pharmacy, and Vangelas, the principal owner of the pharmacy, oversaw the billing of $10.5 million in drugs to the federal government’s workers’ compensation program, the complaint said. Ohebshalom worked at the Fairlawn Pharmacy for Miller and Vangelas

Filippone continued to live and work rent free at the premises then owned by Miller and Vangelas. In exchange, he provided Fairlawn Pharmacy with as many as four to five fraudulent prescriptions per day.

The men are charged with conspiracy to commit healthcare fraud and violating the federal anti-kickback statute. Both counts are punishable by a fine of $250,000 or twice the gross gain or loss derived from the offence, whichever is greater. Conspiracy to commit healthcare fraud also carries a maximum of a 10-year prison sentence, while violating the anti-kickback statute carries a maximum five year sentence.

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