NEWARK, N.J. – A former pharmaceutical and marketing company sales representative today admitted his role in a conspiracy to defraud a New Jersey state health benefits program, U.S. Attorney Craig Carpenito announced.
Joshua Darstek, 38, of Freehold, New Jersey, pleaded guilty by videoconference before U.S. District Judge John Michael Vazquez to a superseding information charging him with conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Compounding is a practice in which a pharmacist or physician combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient. The Food and Drug Administration does not approve compounded drugs and thus does not verify the safety, potency, effectiveness, or manufacturing quality of compounded drugs. Generally, a physician may prescribe compounded drugs when an FDA-approved drug does not meet the health needs of a particular patient.
Between May 2014 and January 2016, Darstek worked as a sales representative on behalf of two compounding pharmacies and a marketing company – referred to in the superseding information as the “Compounding Companies.” He marketed and sold compounded drugs to physicians, including pain, scar, and wound creams and certain supplements and vitamins. The Compounding Companies paid Darstek based on a percentage of the reimbursement payments they received from health care benefit programs for each prescription that he referred to the compounding pharmacies. Darstek participated in a conspiracy that recruited patients, many of whom had prescription drug coverage under the New Jersey School Employee’s Health Benefits Program, to submit medically unnecessary prescriptions for compounded drugs to the pharmacies. Darstek caused physicians to write prescriptions for individuals with whom they did not have any interaction for purposes of determining that a prescription for a compounded drug was medically necessary.
The conspiracy to commit health care fraud count carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gain or loss from the offense. As part of his plea agreement, Darstek must forfeit $148,500 in criminal proceeds and pay restitution of at least $594,639. Sentencing is scheduled for March 23.
U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and the Defense Criminal Investigative Service, under the direction of Acting Special Agent in Charge Patrick J. Hegarty, with the investigation leading to today’s plea.
The government is represented by Assistant U.S. Attorney Bernard J. Cooney, Acting Chief of the Opioid Abuse Prevention & Enforcement Unit.