N.J. Pharmacist, Employee Sentenced in Medicaid Fraud Rip-Off Scam

New Jersey Attorney General Peter Harvey announced that a Passaic County pharmacist and his assistant have been sentenced for reportedly bilking the Medicaid Program out of more than $450,000 in prescriptions that were never distributed to Medicaid patients.

The Medicaid Program, which is funded by the state and federal governments and administered by the State of New Jersey through the Division of Medical Assistance and Health Services, provides health care services and prescription drugs to persons who may not otherwise be able to afford such services and medicines.

According to Vaughn McKoy, Director, Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden Brown, pharmacist Matthew Faenza, 64, Coventry Way, Ringwood, was sentenced to three years in state prison, ordered to pay $450,000 restitution to the Medicaid Program and fined $15,000. Additionally, the court ordered a one-year suspension of Faenza’s pharmacist license and barred him from participating in the Medicaid Program for five years. Faenza was also required to submit a DNA sample as required under the new DNA convicted offender statute. On Sept. 12, pharmacy employee Michael Pacheco, 25, Paterson, was sentenced to three years probation and suspended from participating in the Medicaid Program for five years.

Brown noted that Faenza, the owner/operator of McDermott Pharmacy located in Paterson, pled guilty on June 4 before Passaic County Superior Court Judge Ernest Caposela to a criminal Accusation which charged one count of Health Care Claims Fraud.

At the guilty plea hearing Faenza, reportedly admitted to fraudulently billing the Medicaid Program more than $450,000 in reimbursements for dispensing drugs to Medicaid patients when, in fact, no drugs were dispensed. The fraudulent billing activity took place from January, 1998 through July, 1999. The drug most commonly involved in the phony Medicaid transactions was Serostim, an expensive drug used to treat persons infected with HIV.

Pacheco, an employee at McDermott Pharmacy, pleaded guilty on July 18 to an Accusation which charged one count of Medicaid fraud. At the guilty plea hearing before Judge Caposela, Pacheco reportedly admitted to assisting Faenza in preparing and submitting the fraudulent billings to the Medicaid Program.

Pacheco also reportedly admitted that, at Faenza’s direction, he paid runners for prescriptions when Faenza was not at the pharmacy. Faenza then billed Medicaid for those prescriptions.