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For Immediate Release:
For Further Information:
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December 16, 2010

Office of The Attorney General
- Paula T. Dow, Attorney General
Division of Criminal Justice
- Stephen J. Taylor, Director
Office of the Insurance Fraud Prosecutor

- Riza Dagli, Acting Insurance Fraud Prosecutor

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609-292-4791
Citizen Inquiries-
609-292-4925

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Co-Owners of Defunct Mercer County Mental Health Clinic Sentenced For Medicaid Fraud

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TRENTON - Attorney General Paula T. Dow and Criminal Justice Director Stephen J. Taylor announced that two co-owners of a defunct Mercer County mental health clinic have been sentenced for their roles in a scheme to fraudulently over-bill the Medicaid program by more than $125,000.

According to Acting Insurance Fraud Prosecutor Riza Dagli, Pedro Acosta, 65, of Queens, N.Y., co-owner of the now-defunct Chambers Mental Health Clinic LLC, which was formerly located in Trenton, was sentenced yesterday (Dec. 15) to three years in state prison and ordered to pay $52,707 in restitution and the same amount in civil penalties. Acosta’s sentence was based on his May 2, 2008 guilty plea to second-degree health care claims fraud before Superior Court Judge Darlene J. Pereksta in Mercer County.

Also yesterday, Osvaldo Morales Sr., 62, of Bronx, N.Y., also a co-owner of Chambers Mental Health Clinic LLC, was sentenced to three years probation and ordered to pay $14,152 in restitution and the same amount in civil penalties. Morales pleaded guilty on Jan. 27, 2010 to third-degree Medicaid fraud before Superior Court Judge Edward M. Neafsey in Mercer County. The charges were contained in a Nov. 13, 2007 state grand jury indictment.

Acosta and Morales will each be debarred from the Medicaid program for eight years. Both defendants were sentenced by Judge Neafsey.

In pleading guilty, Osvaldo and Morales admitted that between January 2004 and November 2005, they fraudulently over-billed the Medicaid program.

Two of Acosta and Morales’ co-defendants were previously sentenced:

Arnold Jacques, M.D., 61, of Jackson, the former medical director of the clinic, a medical doctor who practices as a psychiatrist – was also charged in the Nov. 13, 2007 state grand jury indictment. Jacques was sentenced on Nov. 29 to three years in state prison and ordered to pay a total of $49,941 restitution to the Medicaid and Medicare programs. Jacques’ sentence was based on his Sept. 8 guilty plea to second-degree conspiracy, second-degree health care claims fraud, and third-degree Medicaid fraud.

A third owner of Chambers Mental Health Clinic LLC, Bernardo Estambul, 62, of New York, N.Y., previously pleaded guilty to an accusation charging him with Medicaid fraud and was subsequently 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.

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 specialist medical doctor as opposed to counselors who did not have licenses. The defendants fraudulently billed the Medicaid program for more than $125,000 to which they were not entitled.

Detectives Joseph Jaruszewski and Kevin Gannon and former Deputy Attorney General Sherry L. Wilson were assigned to the investigation. Deputy Attorney General Nina D. Bonner represented the Office of the Insurance Fraud Prosecutor at yesterday’s sentencing hearings.

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