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.