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John Devlin, 37, is one of seven people who took deals from the government and admitted participating in a plot to defraud health insurance companies through patient brokering in several states, U.S. Attorney for New Jersey Philip R. Sellinger said.
The confessed schemers enlisted "recruiters" to pay users addicted to heroin and other drugs with "robust" private health insurance several thousand dollars to enter specific drug rehab centers in New Jersey and other states -- whether they needed treatment or not, Sellinger said.
They even arranged and paid for cross-country travel, he said.The company "maintained contractual relationships with drug treatment facilities around the country" and "engaged a nationwide network of recruiters" to identify and approach potential patients in New Jersey and elsewhere, Sellinger said.
The schemers often selected rehab facilities that they knew “provided ineffective drug treatment or actually fostered drug use on their premises” to keep the scheme going, the U.S. attorney said.
Those facilities, in turn, paid $5,000 to $10,000 per patient in referral fees -- funded by health insurance -- to a marketing company owned by Devlin and two accomplices, he said.
One of the defendants stayed in touch with the New Jersey patients at the facilities and specifically instructed them to stay long enough for the company to get the referral payments, Sellinger said.
The fraud cost the insurers millions, Sellinger said.
In addition to the prison term, U.S. District Judge Peter G. Sheridan sentenced Devlin to three years of supervised release.
Sellinger credited special agents of the FBI with the investigation leading to the guilty pleas, secured by Assistant U.S. Attorney Jason S. Gould of his Health Care Fraud Unit in Newark.
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