A massive federal health fraud case claimed another conspirator when a Fair Lawn pharmacy employee from Fort Lee admitted participating in a scheme that cost a federal workers' compensation program millions of dollars.
Zachary Ohebshalom, 34, was the second of five defendants to take a plea deal from federal prosecutors, less than a month after Estela Arco-Blaustein, 55, of Mahwah pleaded out in U.S. District Court in Newark for her role in the scheme.
Still facing charges are Dr. Mark Filippone, 71, of Wallington and the co-owners of Jiffy Scripts in Fair Lawn, Joseph Vangelas, 33, of Fort Lee. and Marlene Vangelas, 58, of River Vale.
Their scheme to fill bogus prescriptions for medically unnecessary pain creams for hundreds of now-former U.S. Postal Service employees caused losses of nearly $3.5 million, the government said.
It began after Joseph and Marlene Vangelas bought Filippone’s office for above fair market value, federal prosecutors said.
They then “permitted Filippone to continue to use the premises, for which he routinely failed to pay rent,” U.S. Attorney Craig Carpenito said.
The Vangelases conspired with Ohebshalom and Arco-Blaustein -- who was their pharmacist-in-charge -- to “leverage the property to force Filippone to continue to send prescriptions to their pharmacy,” the U.S. attorney said.
Filippone saw the workers, some of them coming from as far as Florida and Georgia, federal prosecutors said. Then he submitted bogus reports that allowed them to file phony disability claims for injuries they purportedly suffered on the job, they said.
Filippone also prescribed the “expensive but medically unnecessary, pain creams” Carpenito said.
He “continued to feed prescriptions to the pharmacy, so long as Miller and Vangelas permitted him to remain rent-free in the property,” the U.S. attorney said.
Meanwhile, the pharmacy owners and employees continued to “mine reimbursement rates within the federal workers’ compensation program for the ingredients of the pain creams in order to determine the most lucrative formulations,” Carpenito said.
They “then printed prescription labels for Filippone to use with his patients,” he said.
Filippone used the pre-printed labels and sent the prescriptions back to Arco-Blaustein, Miller, Vangelas, and Ohebshalom, the U.S. attorney said.
Arco-Blaustein last month pleaded guilty in federal court in Newark to a single count of conspiracy to commit healthcare fraud.
Ohebshalom pleaded guilty in the same courtroom on Tuesday to conspiring to violate the federal anti-kickback statute.
Both cold testify against the others or become leverage for federal prosecutors trying to secure additional plea deals from any or all of them.
U.S. District Judge Susan D. Wigenton scheduled Arco-Blaustein’s sentencing for April 22, although that could be extended depending on how the case progresses. She scheduled Ohebshalom for May 21.
Carpenito credited the FBI, the U.S. Postal Service, the U.S. Department of Labor, and special agents of IRS-Criminal Investigation with assembling the case.
Securing both plea deals was Assistant U.S. Attorney Joshua L. Haber of Carpenito’s Healthcare Fraud Unit in Newark.
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