CAMDEN, NJ – A pharmaceutical sales representative today admitted to conspiring to defraud New Jersey County health benefit programs and conspiring to launder money and obstruct justice, the acting prosecutor said Rachael A. Honig.
Paul Camarda, 39, of Holmdel, New Jersey, pleaded guilty before U.S. District Judge Robert B. Kugler in Camden Federal Court to an information accusing him of one count of conspiracy to commit fraud in health care and one count of conspiracy to obstruct justice and engage in money laundering.
According to the documents filed in this case and the statements made in court:
Camarda was a sales representative for a pharmaceutical company. He created a side business called Dynasty Capital LLC to independently market medical products and services for other companies, including compound prescription drugs for specialty pharmacies. Camarda has marketed compound drugs for several pharmacies, including New Jersey and out-of-state pharmacies identified in court documents as “Compound Pharmacy 1,” “Compound Pharmacy 2,” “Compound Pharmacy 3” and “Compound pharmacy 4”. As part of his arrangements with compounding pharmacies and his conspirators, Camarda was paid a percentage of the insurance payments received for prescriptions arranged by him and those who worked with him.
Compound drugs are specialty drugs mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compound drugs are not approved by the Food and Drug Administration (FDA), they are correctly prescribed when a doctor determines that an FDA-approved drug does not meet the health needs of a particular patient, such as example if a patient is allergic to a dye or other ingredient.
Camarda has learned that some local government employees have insurance coverage for these particular compound drugs. An entity identified in court documents as the “Drug Benefits Administrator” provided drug benefit management services for the Bergen County Prescription Benefit Program (BCPBP), which covered some local government employees, including county jail guards. The Pharmacy Benefits Administrator paid the prescription drug claims and then billed the BCPBP for the amounts paid.
Camarda was a leader and manager of the conspiracy. He and his conspirators found that certain compound drugs – including vitamins and pain creams, scars, antifungals, migraines and libido – paid back up to thousands of dollars for a month-long supply. Camarda recruited people covered by the BCPBP to fraudulently obtain medically unnecessary compound drugs. He provided the recruits with blank prescription forms and ordered them to go to an anonymous doctor – referred to in court documents as “Person 1” – to get clearance for the compound prescription drugs. The investigation revealed that all of the recruits went to Individual 1 in order to obtain the prescriptions within a few days of each other and all received prescriptions authorized by Individual 1 for the same specialty on the same day or a few days apart. The recruits agreed to receive the very expensive compound drugs not because they needed it, but because they were paid by Camarda to do so. Camarda explained to the recruits that the more they agreed to receive compound drugs and the more people they recruited to get the drugs as well, the more money they could make in the plot.
Camarda received over $ 2.2 million in payments for the prescriptions he and his collaborators arranged, and Camarda and his recruits had more than $ 3.4 million in fraudulent claims submitted to the Drug Benefits Administrator. for compound drugs. Camarda’s payments from prep pharmacies and his conspirators, as well as Camarda’s payments to his recruits, served as the basis for the charge of money laundering conspiracy to which Camarda pleaded guilty.
In 2017, Camarda learned that federal agents and a federal grand jury were investigating the healthcare fraud conspiracy. Camarda conspired to obstruct the federal investigation by providing and asking others to provide false information to federal agents and the grand jury.
The charge of conspiracy of healthcare fraud to which Camarda has pleaded guilty carries a potential maximum sentence of 10 years in prison and a fine of $ 250,000, or double the gain or loss of the offense, whichever is greater. The count of obstruction of justice and money laundering conspiracy is punishable by up to five years in prison and a fine of $ 250,000, or double the gross gain or loss resulting from offense, whichever is greater. Sentencing is scheduled for November 18, 2021.
Acting US Attorney Rachael A. Honig credited special agents with the IRS criminal investigation, under the direction of Special Agent in Charge Michael Montanez in Newark; special agents from the FBI’s Atlantic City Residents’ Agency, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark; and special agents of the Office of the Inspector General of the United States Department of Labor, New York region, under the direction of Special Agent in Charge Michael C. Mikulka, with the investigation leading to the guilty plea of ‘today.
The government is represented by Assistant United States Attorneys Christina O. Hud and R. David Walk Jr. of the Office of the United States Attorney in Camden.