|TRENTON - Attorney General Jeffrey S. Chiesa announced that the former owner of a Newark clinic has been sentenced for his role in a scheme in which pharmacy owners and employees bought completed prescription forms for expensive drugs, such as HIV/AIDS drugs, from patients so Medicaid could be billed for drugs that were never actually dispensed.
Bryan X. Chandler, aka Dr. X, 45, of East Orange, the former owner and director of Samaritan Medical, a clinic that formerly operated at 508 South Orange Avenue in Newark, was sentenced yesterday (Aug. 7) to three-years of probation by Superior Court Judge Martin G. Cronin in Essex County. Judge Cronin ordered Chandler to pay $102,633 in restitution, which represents all payments made by Medicaid to his clinic since it opened in 2007. Chandler will be barred from participating in the Medicaid program as a service provider for five years. He must forfeit assets seized in the investigation, including $18,220 in cash and two vehicles, and will waive any rights to $17,239 in pending Medicaid claims due to Samaritan. Chandler’s sentence was based on his Aug. 28, 2008 guilty plea to an accusation charging him with second-degree health care claims fraud.
In pleading guilty, Chandler admitted that he recruited beneficiaries to come to his clinic so that multiple prescriptions could be written in each beneficiary's name and sold to pharmacies in Newark. Those pharmacies billed Medicaid for the medicines without dispensing them to the named beneficiaries.
Chandler was charged as a result of Operation PharmScam, an investigation targeting Medicaid fraud totaling more than $2 million. The investigation was conducted by the Office of Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit and the U.S. Food and Drug Administration’s (“USFDA”) Office of Criminal Investigations. As a result of the investigation and subsequent prosecution, five pharmacists from three different Newark pharmacies have been sentenced. The investigation determined that patients who agreed to go without their medicines were paid cash for their prescriptions, which were used to fraudulently bill Medicaid at prices 10 to 30 times higher than what was paid to the patient. The investigation determined that prescriptions for HIV/AIDS drugs and other expensive specialty drugs were bought for several hundred dollars and billed to Medicaid for thousands of dollars.
Deputy Attorney General David Noble and Detectives Danielle Han, Jacqueline Latty, and Kevin Gannon were assigned to the case. Acting Insurance Fraud Prosecutor Ronald Chillemi thanked the USFDA for its assistance in the investigation.
Acting Insurance Fraud Prosecutor Chillemi 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 at 1-877-55-FRAUD, or visiting the Web site at www.NJInsurancefraud.org.” State regulations permit a reward to be paid to an eligible person who provides information that leads to an arrest, prosecution and conviction for insurance fraud.