A Fair Lawn pharmacist from Mahwah admitted Wednesday that she participated in a scheme to fill bogus prescriptions for medically unnecessary pain creams, costing a federal workers’ compensation program millions of dollars.
Estela Arco-Blaustein, 55, was the first of five people charged by the government in the massive fraud to take a guilty plea.
She admitted Wednesday in U.S. District Court in Newark that her role in the healthcare fraud conspiracy caused losses of $1.5 million to $3.5 million, U.S. Attorney Craig Carpenito said.
Arco-Blaustein was pharmacist in charge of Jiffy Scripts pharmacy on Promenade Boulevard, which was filling the prescriptions as fast as 71-year-old physician Mark Filippone of Wallington could write them.
Hundreds of now-former U.S. Postal Service employees visited Filippone, some of them coming from as far as Florida and Georgia, authorities said.
The doctor submitted bogus reports that allowed them to file disability claims for injuries they purportedly suffered on the job, Carpenito said.
Filippone also prescribed “expensive but medically unnecessary, pain creams” to the patients, the U.S. attorney said.
Behind the scheme, prosecutors said, was Jiffy Scripts.
Co-owners Joseph Miller, of Fort Lee, and Marlene Vangelas, of River Vale, had bought Filippone’s office for above fair market value.
They then “permitted Filippone to continue to use the premises, for which he routinely failed to pay rent,” Carpenito said.
Miller, Vangelas, Arco-Blaustein and a fourth defendant -- Zachary Ohebshalom of Edgewater – “conspired to leverage the property to force Filippone to continue to send prescriptions to their pharmacy,” the U.S. attorney said.
Filippone “continued to feed prescriptions to the pharmacy, so long as Miller and Vangelas permitted him to remain rent-free in the property,” he said.
Meanwhile, they 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 wasn’t mentioned in previous news releases and statements about the case.
Her name finally surfaced publicly on Wednesday, when she pleaded guilty in U.S. District Court in Newark to a single count of conspiracy to commit healthcare fraud.
She would likely 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.
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 the plea agreement was Assistant U.S. Attorney Joshua L. Haber of Carpenito’s Healthcare Fraud Unit in Newark.
ALSO SEE: A Fort Lee insurance broker must spend six months in federal prison -- followed by six months of home confinement -- and repay $1 million that was siphoned from a Horizon Blue Cross Blue Shield and the United Auto Workers (UAW) Local 2326 Health Care Plan.
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