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TRENTON - Acting Attorney
General Paula T. Dow and Division of Criminal
Justice Director Stephen J. Taylor announced
that a co-owner of a Trenton mental health
clinic pleaded guilty today for his role in
a conspiracy to fraudulently over-bill the
Medicaid program by more than $160,000.
According to Acting Insurance
Fraud Prosecutor Riza Dagli, Osvaldo Morales
Sr., 61, of Bronx, N.Y., a co-owner of the
now-defunct Chambers Mental Health Clinic
LLC, pleaded guilty to third-degree Medicaid
fraud before Superior Court Judge Edward M.
Neafsey in Mercer County. The charge was contained
in a Nov. 13, 2007 state grand jury indictment.
Judge Neafsey scheduled sentencing
for March 31. The state recommended that Morales
serve a probationary sentence.
Morales’s co-defendants
- Pedro Acosta, 64, of Queens, N.Y., a co-owner
of Chambers Mental Health Clinic LLC and Arnold
Jacques, M.D., 60, of Jackson, the former
medical director of the clinic, a medical
doctor who practices as a psychiatrist - were
also charged in the Nov. 13, 2007 state grand
jury indictment. Acosta pleaded guilty to
second-degree health care claims fraud and
is awaiting sentencing. The case against Jacques
is pending. A co-owner of the clinic, Bernardo
Estambul, 61, of New York, N.Y., pleaded guilty
to an accusation charging him with Medicaid
fraud. Estambul was sentenced to three years
probation and ordered to pay $10,044 in fines
and restitution. Estambul was also barred
from participating in the Medicaid program
for five years.
In pleading guilty, Morales,
who operated Chambers Mental Health Clinic
in Trenton, admitted that between January
2004 and November 2005, he fraudulently over-billed
the Medicaid program.
Morales, Estambul and Acosta
caused Medicaid claims to be billed under
Jacques’ Medicaid provider number even
though Jacques did not provide the counseling
services billed. In addition, Morales, Estambul
and Acosta billed Medicaid for longer counseling
sessions than those that were actually provided.
Medicaid pays a higher rate for longer counseling
sessions and for counseling services provided
by a medical doctor as opposed to counselors
who did not have licenses. It is charged that
the defendants allegedly fraudulently billed
the Medicaid program for more than $160,000
to which they were not entitled.
Detectives Joseph Jaruszewski
and Kevin Gannon and Deputy Attorney General
Sherry L. Wilson were assigned to the investigation.
Wilson represented the Office of the Insurance
Fraud Prosecutor at the guilty plea hearing.
“Abuse of the Medicaid
Program and insurance fraud by persons who
hold professional licenses are particularly
disturbing crimes,” said Acting Insurance
Fraud Prosecutor Dagli. “Not only do
such Medicaid fraud schemes involve theft
of tax dollars, they also represent a theft
from a program designed to assist persons
who can not afford health insurance or health
care services. Such cases are a priority for
the Office of the Insurance Fraud Prosecutor.”
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 the 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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