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For Immediate Release:  
For Further Information:
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August 7, 2009  

Division of Criminal Justice
609-292-4791

Office of The Attorney General
- Anne Milgram, Attorney General
Division of Criminal Justice
- Deborah L. Gramiccioni, Director
Office of the Insurance Fraud Prosecutor
- Riza Dagli, Acting Insurance Fraud Prosecutor

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Atlantic County Pharmacist Sentenced for Illegally Dispensing Painkillers in Medicaid & Private Health Insurance Fraud

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TRENTON - Attorney General Anne Milgram and Criminal Justice Director Deborah L. Gramiccioni announced that an Atlantic County pharmacist was sentenced today for using phony prescriptions to distribute thousands of narcotic pills and fraudulently bill them to Medicaid and private insurance companies.

According to Acting Insurance Fraud Prosecutor Riza Dagli, Paola D’Ottavio, 42, of Pleasantville, was ordered by Superior Court Judge Albert J. Garofolo in Atlantic County to serve eight years in state prison and to pay $19,534 in restitution to Medicaid and $4,290 in restitution to Caremark/Advance PCS. D’Ottavio’s sentence was based on her May 19 conviction on four counts of health care claims fraud, as well as distribution of a controlled dangerous substance and Medicaid fraud. The conviction followed a 10-day jury trial in front of Judge Garofolo. D’Ottavio’s pharmacy license was revoked by the New Jersey Board of Pharmacy on July 8.

Deputy Attorneys General Erik Daab and Linda Rinaldi prosecuted the case and represented the Office of Insurance Fraud Prosecutor at trial. Detective Christine Barclay led the investigation, and Mona Patel, a paralegal in the Medicaid Fraud Control Unit, assisted at trial. The U.S. Drug Enforcement Administration assisted in the investigation.

The Atlantic County jury found that between Jan. 1, 2004 and June 30, 2005, D’Ottavio, a pharmacist licensed in the State of New Jersey, created false telephone prescriptions for hydrocodone and provided thousands of the pills to at least two purported customers. The customers were actually friends of D’Ottavio, who sold the drugs, splitting the profits with D’Ottavio. Hydrocodone is the main ingredient in the painkiller Vicodin.

The jury found that D’Ottavio submitted false claims for the drugs to Caremark/Advance PCS and Medicaid, as well as to private pay prescription insurance companies and pharmacy benefit managers. The claims stated the drugs were for legitimate private pay prescription insurance patients and Medicaid patients. It was determined that the drugs had not been legitimately prescribed by physicians for the people named on the prescriptions.

One of the purported customers, Terry Gatto, 54, of Egg Harbor Township, was previously prosecuted for picking up prescription drugs in the names of other patients, then selling the drugs on the street or black market and sharing the proceeds of those illegal sales with D’Ottavio. Gatto pleaded guilty to theft by deception on May 12, 2006. Gatto was sentenced in June to one year probation.

Another purported customer, Vicki Guld, 48, of Galloway, pleaded guilty before Superior Court Judge James Isman in Atlantic County to a criminal accusation which charged her with conspiracy to possess a controlled dangerous substance. On May 29, Guld was sentenced to three years probation.

Acting Fraud Prosecutor Dagli noted that some important cases have started with anonymous tips. People who are concerned about insurance cheating and have information about a fraud can report it anonymously by calling the toll-free hotline 1-877-55-FRAUD or visiting the Web site www.njinsurancefraud.org. State regulations permit an award to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.

The Office of Insurance Fraud Prosecutor was established by the Automobile Insurance Cost Reduction Act of 1998. The office is the centralized state agency that investigates and prosecutes both civil and criminal insurance fraud, as well as Medicaid fraud.

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