We continue to follow the story of a compounded medication fraud scheme centered in New Jersey.  The conspiracy, described in detail in our prior alerts here and here has cost two New Jersey state health programs over $25 million.

The latest development occurred earlier this week in a New Jersey federal court where an eleventh person has submitted a guilty plea in the case. Andrew Gerstel, a pharmaceutical sales representative, pleaded guilty in United States District Court in Camden before Judge Robert B. Kugler to an information charging him with conspiracy to commit health care fraud.

Gerstel served as a recruiter in the conspiracy, having enlisted individuals in New Jersey to submit unnecessary claims for expensive compounded medications ordered from an as yet unnamed out-of-state pharmacy. The individuals, primarily teachers, firefighters, police officers and other public employees, were then handed a kickback for their participation in the scheme.

As a part of his plea agreement, Gerstel will forfeit just over $184,000 in criminal proceeds and pay restitution of at least $483,000. When he is sentenced in February 2018, he faces a maximum of 10 years in prison and a $250,000 fine, or twice the gain or loss of the offense.

The FisherBroyles Pharmacy and Health Care Law team will continue to track issues of importance, along with notable accounts of fraud and wrongdoing, in the pharmaceutical and health care industries. We welcome your questions. Please contact any of the following attorneys:

Brian Dickerson, FisherBroyles Partner
Brian E. Dickerson
brian.dickerson@fisherbroyles.legal
202.570.0248

Anthony Calamunci, FisherBroyles Partner
Anthony Calamunci
Anthony.calaunci@fisherbroyles.legal
419.376.1776

Nicole Waid, FisherBroyles Partner
Nicole Hughes Waid
nicole.waid@fisherbroyles.legal
202.906.9572

Amy Butler, FisherBroyles Partner
Amy Butler
amy.butler@fisherbroyles.legal
419.340.8466

Katy Wane, FisherBroyles Partner
Katy Wane
Katy.wane@fisherbroyles.legal
502-890-5920