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C.R. Kraus, a Manville resident, was convicted in April of conspiracy to commit healthcare fraud, five acts of healthcare fraud, and four counts of tax evasion, US Attorney Philip Sellinger said. Two of Kraus' co-conspirators pled guilty for their role in the scheme and are awaiting sentencing, Sellinger said.
From 2009 to 2019, Kraus and his co-conspirators conspired to defraud the brain injury fund by misappropriating more than $4 million in fraudulent vendor payments for purported services that were never actually provided, Sellinger said.
Harry Pizutelli, a manager of the fund orchestrated the distribution of fraudulent vendor payments to Maritza Flores and Kraus by generating and processing false invoices and internal payment vouchers, Sellinger said.
Pizutelli generated these invoices and vouchers to give the appearance that Flores and Kraus had provided approved services to eligible patients when, in fact, they had not provided any services, Sellinger said. Pizutelli then approved and transmitted the internal payment vouchers so that his conspirators received vendor payments, Sellinger said.
Sellinger said Pizutelli orchestrated the payments to maintain a romantic relationship with Flores, including more than $940,000 in fraudulent distributions to Flores and more than $3.245 million in fraudulent distributions to Kraus.
To obscure their fraudulent conduct, Flores and Kraus also evaded the payment of substantial amount of income taxes by making material misstatements and omissions on their federal income tax returns and significantly underreporting the income they had derived from the fraudulent scheme, Sellinger said.
In addition to the prison term, Judge Quraishi sentenced Kraus to three years of supervised release and ordered restitution of $4.19 million.
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