Trenton
- Attorney General Peter C. Harvey announced
that the Office
of Insurance Fraud Prosecutor
successfully
argued two cases before the Superior Court
which resulted in separate decisions that
upheld
the constitutionality of New Jersey’s
Insurance Fraud Prevention Act and the
awarding of more than $3.5 million in
civil penalties as a result of complaints
filed by the Office of Insurance Fraud
Prosecutor. The cases represent the largest
civil penalties to date in contested civil
actions under the New Jersey Insurance
Fraud Prevention Act.
“The
significance of these decisions cannot
be minimized,” Attorney General
Harvey said. “The cases challenged
the very heart of New Jersey’s nationally
recognized laws and efforts to attack
insurance fraud and the Attorney General’s
standing to bring actions under the statute.
In both cases, Superior Court judges dismissed
challenges to the Insurance Fraud Prevention
Act, upholding the constitutionality of
New Jersey’s statute. As a result
of these cases, more than $3.5 million
in civil penalties has been imposed upon
corrupt medical service corporations,
providers, and individual medical practitioners.
These decisions serve to maintain the
legitimacy of New Jersey’s recognized
position as a national leader in attacking
insurance fraud and related insurance
crime.”
Division of Criminal Justice Director
Vaughn L. McKoy and Insurance Fraud Prosecutor
Greta Gooden Brown said that in the case
of State v. HealthCare Integrated Services,
et al (HIS), Morris County Superior Court
Judge Charles Villanueva upheld the constitutionality
of the Insurance Fraud Prevention Act
and ordered HealthCare Integrated Services,
Inc. and four affiliated businesses to
pay more than $2.57 million in civil fines
as a result of committing 650 violations
of the Act. In rejecting the contention
that the Insurance Fraud Act violated
the federal and state constitution, Judge
Villanueva noted that HIS committed “intentional,
coordinated and calculated acts to get
around the system of regulatory safeguards.”
Insurance Fraud Prosecutor Brown noted
that Judge Villanueva assessed $1,009,920
in civil penalties against HIS; $575,000
against Edgewater Diagnostic Imaging,
P.A.; $830,000 against Monmouth Diagnostic
Imaging, P.A.; $82,000 against Wayne MRI,
P.A.; and $75,000 against Meadowlands
Diagnostic Imaging, P.A. The combined
award was $2,571,920.
The case was prosecuted and argued by
Deputy Attorney’s General John C.
Grady, Kathleen Waldron and Steven Smith
of the Office of Insurance Fraud Prosecutor.
Prosecutor Brown said the second decision
was issued by Passaic County Superior
Court Judge Christine L. Miniman and awarded
$935,610 in civil penalties in the case
of State v. Daniel Fontanella, a former
Passaic County chiropractor. Fontanella
pleaded guilty in March, 2001, to second
degree theft by deception following the
filing of criminal charges by the Passaic
County Prosecutor. At the guilty plea
hearing, Fontanella admitted that forty-five
percent of the billings submitted for
reimbursement to insurance carriers during
1996 and 1997 were fraudulent.
The complaint charged that Fontanella
submitted fraudulent bills for 441 patients
representing 11,035 fraudulent medical
treatments -- an average of 25 fraudulent
bills per patient. Insurance carriers
were billed $2,123,344 for the visits.
Judge Miniman estimated that Fontanella
gained $955,055 as a result of his conduct.
The judge also found that none of Fontanella’s
ill-gotten gains has been recovered by
the insurance carriers. In imposing the
financial penalty, Judge Miniman found
that Fontanella engaged in fraudulent
conduct with the specific intent to obtain
insurance benefits to which he was not
entitled and that he paid “runners”
to bring purported accident victims to
his practice for treatment. Fontanella
surrendered his New Jersey license to
practice chiropractic in 1998. The license
was revoked by the Board of Chiropractic
Examiners in March, 2005.
The case was prosecuted by Deputy Attorney
General John Grady, Attorney Assistant
Cynthia Rago, Manager II Ronald Dellano,
and Special Assistant Marius Lombardi
of the Office of the Insurance Fraud Prosecutor.