Jail Time For Moorestown Man In Prescription Drug Fraud Scheme

MOORESTOWN, NJ — A former pharmaceutical representative from Moorestown has been sentenced to one year, one month in prison for submitting fraudulent claims for medically unnecessary prescriptions in an effort to defraud state health benefits programs and other insurers, federal authorities announced on Wednesday.

George Gavras, 40, was one of four people who were sentenced in connection with the scheme this week, Acting U.S. Attorney Rachael A. Honig announced.

Each had previously pleaded guilty to separate informations charging each with conspiracy to commit health care fraud. The others were:

• Michael Pilate, 43, of Williamstown, formerly a guidance counselor with the Pleasantville public school district, who was sentenced to one year, six months in prison;
• Tara LaMonaca, 47, of Linwood, formerly a pharmaceutical sales representative, who was sentenced to eight years in prison; and
• Andrew Gerstel, 43, formerly a pharmaceutical sales representative from Galloway, who was sentenced to one year in prison.

Gavras was also sentenced to two years supervised release. He must forfeit $204,002 in criminal proceeds and pay restitution of $677,815.

Pilate, LaMonaca, and Gerstel were each sentenced to three years of supervised release. Pilate must forfeit $392,684 in criminal proceeds and pay restitution of $3.49 million. LaMonaca must forfeit $89,855 in criminal proceeds and pay restitution of $523,831. Gerstel must forfeit $184,389 in criminal proceeds and pay restitution of $483,946.

Compounded medications are supposed to be specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient, according to documents filed in the case and statements made in court.

They aren't approved by the Federal Drug Administration (FDA), but when an FDA-approved medication don't meet the health needs of a patient, the doctor is permitted to prescribe a compounded medication.

From January 2015 through April 2016, Gavras and Holt were among a group of conspirators who persuaded patients to obtain very expensive and medically unnecessary compounded medications from an out-of-state pharmacy, identified in the information as the "Compounding Pharmacy," according to authorities.

The conspirators learned that certain compound medication prescriptions – including pain, scar, antifungal, and libido creams, as well as vitamin combinations – were reimbursed for thousands of dollars for a one-month supply, authorities said.

They also discovered that some New Jersey state and local government and education employees, including teachers, firefighters, municipal police officers, and state troopers, had insurance coverage for these particular compound medications.

An entity referred to in the information 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, and the School Employees' Health Benefits Program, which covers qualified local education employees, retirees, and eligible dependents.

The Pharmacy Benefits Administrator would pay prescription drug claims and then bill the State of New Jersey for the amounts paid.

Once they had recruited an employee covered by the Pharmacy Benefits Administrator, Gavras obtained that employee's insurance information and filled out a Compounding Pharmacy prescription form, authorities said. He would select the compounded medications that paid the most, without regard to their medical necessity.

Gavras would then get the prescriptions signed by doctors and other qualified health professionals who never saw the patients or evaluated whether the patients had a medical necessity for the compounded medication, authorities said.

The prescriptions were then faxed to Compounding Pharmacy, which filled the prescriptions and billed the Pharmacy Benefits Administrator.

According to authorities, the Pharmacy Benefits Administrator paid Compounding Pharmacy over $50 million for compounded medications mailed to patients in New Jersey.