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Thirteen people, including doctors and pharmacists were arrested Tuesday in what authorities describe as a takedown of a major criminal narcotics network in Hudson County that was responsible for the black market distribution of thousands of prescription pain pills such as OxyContin and Percocet.
The arrests stem from Operation MedScam, a year-long investigation by the Medicaid Fraud Control Unit of the state Office of Insurance Fraud prosecutor and the Jersey City police Special Investigation Unit. The ongoing investigation uncovered a criminal network that was obtaining fraudulent narcotics prescriptions from doctors and filling them at various pharmacies. Medicaid and private insurers were being billed for phony prescriptions and doctor visits.
"These defendants ripped off Medicaid and sold dangerous narcotics on the street, peddling black market pain pills such as OxyContin,'' state Attorney General Anne Milgram said. "With these arrests, we have shut down their two-pronged criminal enterprise."
The arrests made late Monday and Tuesday, include alleged ringleaders: Robert Silverman, 43, of Jersey City; Louis Lisi, 34, of Union City; and Brian Kelly, 48, of Hoboken. Silverman allegedly ran his own ring, while the other two allegedly worked together. However, the rings allegedly used the same pharmacists to obtain narcotics and at least one of the same doctors to write prescriptions. They also sometimes supplied each other with pills. During the arrests, more than 1,000 pills were recovered from the individuals and locations searched.The leaders allegedly paid Medicaid beneficiaries to obtain fake prescriptions for painkillers and other drugs from two doctors, Dr. Clifton Howell, 53, of West Orange, whose medical practice is at 550 Newark Ave., Jersey City, and Dr. Magdy Elamir, 56, of North Saddle Brook, whose practice is at 550 Summit Ave., Jersey City. Both of those doctors were arrested.
Two pharmacists were arrested. They are Babak Bamdad, 41, pharmacist in charge at Tucker Drugs, 1000 Washington St., Hoboken, and Amir Tadros, 32, pharmacist in charge at Five Corners Pharmacy, 591 Summit Ave., Jersey City.
Six other individuals were arrested as alleged street-level distributors for the narcotics rings. They are Joseph Burkhardt, 50, of Jersey City; Michele J. Oliver, 41, of Wallington; John Bussanich, 23, of Cliffside Park; Danny Reed, 25, of Toms River; Marty Taraboccia, 25 of Fairview; and Jack Kennedy, 28, of Keyport.
The rings allegedly distributed the prescription pain pills throughout Hudson County and other parts of the state, including Bergen, Ocean, Morris and Monmouth counties. A single 30 milligram OxyContin pill, known as a "blue," typically sells for $10 to $20 on the street, while a 10 milligram Percocet pill sells for $5 to $8.
"Operation MedScam targeted and uncovered every aspect of these narcotics rings, from the ringleaders, to the doctors who wrote phony prescriptions, to the pharmacists who filled them, to the distributors who sold the pain pills on the street," state Criminal Justice Director Deborah L. Gramiccioni said. "These arrests are the result of a highly effective partnership between our Medicaid Fraud Control Unit and the Jersey City Police Department."
Jersey City Police Chief Thomas Comey said, "Greed and the illegal narcotics trade know no boundaries. This operation shows the commitment by law enforcement to arrest and prosecute offenders regardless of their social, professional or economic standing.''
The investigation revealed that the two physicians, Howell and Elamir, were allegedly writing prescriptions for Medicaid beneficiaries in exchange for cash or the ability to bill Medicaid, without requiring medical need or a medical examination. Howell allegedly demanded $75 per visit, while Elamir allegedly demanded $50. In other instances, the doctors allegedly wrote prescriptions for narcotics based only on names provided to them by the ringleaders.
The Medicaid beneficiaries would ask for prescriptions for narcotics as well as non-narcotic medications, typically high-priced maintenance drugs such as asthma or allergy medications. The doctors allegedly wrote both the narcotic and non-narcotic prescriptions. The Medicaid beneficiaries took the prescriptions to the pharmacies to obtain the narcotics, or in some instances, Silverman or other ring members obtained the narcotics themselves.
The pharmacists who were arrested, Bambad and Tadros, allegedly filled fraudulent narcotics prescriptions for the criminal network. They allegedly demanded cash for the pain pills because they did not want to bill Medicaid or private insurers for narcotics, which are closely monitored. However, they would provide the painkillers at a discount or without charge if they were also given prescriptions for other non-narcotic medicines, such as the high-priced asthma medication Advair.
They allegedly billed Medicaid and private insurers for the non-narcotic prescriptions without ever dispensing the medications.
"As we have seen historically, this type of health care fraud and street level distribution doesn't occur without the involvement of the medical providers," said state Acting Insurance Fraud Prosecutor Riza Dagli. "Criminal activity by doctors, pharmacists, and other professionals who are in a position of public trust is particularly egregious and is a priority for this office."
Investigators executed search warrants at the homes of Silverman and Lisi. Searches of the doctors' offices, Tucker Pharmacy and Five Corners Pharmacy are underway.
Bank accounts containing more than $1 million were seized Tuesday. They were seized in connection with an action filed by the Division of Criminal Justice to seize and forfeit assets as alleged proceeds and instruments of the defendants' criminal activities, including residential and commercial real estate, vehicles, bank accounts and safe deposit boxes.
In addition, approximately $7,000 in cash was seized from Lisi and his house, along with several falsely labeled prescription bottles, a quantity of OxyContin pills, and several fraudulent prescriptions for narcotics. Another $8,000 was seized from a safe deposit box in Lisi's name. Approximately $20,000 was seized at Silverman's house, along with crack cocaine, a quantity of OxyContin pills, and several falsely labeled prescription bottles.
Silverman, Lisi and Kelly are charged with distribution of drugs within 500 Feet of public property. Lisi is also charged with endangering the welfare of a child. Kelly was also charged with distribution of drugs within 1,000 feet of a school.
Doctors Howell and Elamir were charged with distribution of drugs, health care claims fraud and Medicaid fraud.
Pharmacists Bamdad and Tadros were charged with health care claims fraud and Medicaid fraud.
Burkhardt and Kennedy were each charged with distribution of drugs within 500 feet of public property, distribution of drugs, and distribution of drugs within 1,000 feet of a school. Reed and Oliver were each charged with conspiracy to distribute drugs. Taraboccia and Bussanich were each charged with possession of drugs with intent to distribute.
Additional arrests are expected.
The arrested defendants are being held in the Hudson County Jail in lieu of bails ranging from $75,000 to $150,000. They are expected to be arraigned Wednesday before state Superior Court Judge Kevin G. Callahan in Jersey City.
Milgram credited Det. Kevin Gannon and Sgt. Fred Weidman of the Office of Insurance Fraud Prosecutor's Medicaid Fraud Control Unit for leading the investigation under the supervision of Deputy Attorney General Erik Daab, Deputy Chief of the Medicaid Fraud Control Unit, and Deputy Attorneys General Debra Conrad and Cynthia Vazquez.
They were assisted by the Jersey City police Special Investigation Unit that includes Capt. Gary Lallo, Sgt. Anthony Musante, Sgt. Wally Wolf, Det. Wael Shahid, Det. Jeff Guilfoyle, Det. Vincent Disbrow, Det. Hector Marrero, Officer Alex Torres, Officer Chris Dolan, and Officer Erik Infantes.
Deputy Attorney General Carol Stanton Meier, Det. Sgt. Scott Naismyth and Analyst Bethany Schussler are handling the asset forfeiture action for the Division of Criminal Justice.
– TOM HESTER SR., NEWJERSEYNEWSROOM.COM
