NEWARK, N.J. – The former co-owner of a New Jersey marketing company today admitted her role 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 Craig Carpenito announced.
Lisa Curty, 43, of Staten Island, New York, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to an information charging her with conspiracy to commit health care fraud.
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 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 exploited this opportunity by creating a New Jersey marketing company (Marketing Company-1) 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 Marketing Company-1 or its affiliates paid, to receive the prescriptions.
Once the prescriptions were written, they were filled by certain compounding pharmacies with which Marketing Company-1 conspired. The compounding pharmacies would then receive reimbursement from the insurance plans, and would pay Marketing Company-1 a percentage of the reimbursement amount. As one of the owners of Marketing Company-1, Curty retained a portion of the payment and provided a “commission” payment to the relevant sales representative.
Curty’s conspirator and co-owner of Marketing Company-1, Christine Myers, pleaded guilty on July 27, 2020, to conspiracy to commit health care fraud and is scheduled to be sentenced on Dec. 1, 2020.
Two sales representatives that worked for Marketing Company-1, Christopher Frusci and Enver Kalaba, were former Metropolitan Transportation Authority (MTA) employees. Since the MTA’s health insurance plan covered compounded medications, Frusci and Kalaba targeted co-workers at the MTA and paid them cash bribes for every compounded prescription they submitted. Frusci and Kalaba have both previously pleaded guilty to conspiracy to commit health care fraud charges based on their respective roles in the scheme. On Feb. 7, 2019, Kalaba was sentenced in Newark federal court to 20 months in prison and one year of supervised release, and must forfeit $138,630 in criminal proceeds he received for his role in the scheme and pay restitution of $2.9 million. Frusci is awaiting sentencing.
The count of conspiracy to commit health care fraud is punishable by a maximum of 10 years in prison and a fine of $250,000 fine, or twice the gross gain or loss from the offense. As part of her plea agreement, Curty must forfeit $1.475 million in criminal proceeds she received for her role in the scheme and pay restitution of at least $8.8 million. Sentencing is scheduled for Jan. 26, 2021.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr.; the U.S. Department of Defense, Defense Criminal Investigative Service, under the direction of Special Agent in Charge Leigh-Alistair Barzey; and the Office of the Inspector General, Metropolitan Transportation Authority, under the direction of Inspector General Carolyn Pokorny, with the ongoing investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney Adam Baker of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.