March 13, 2014: Twin Brother Pharmacists Each Sentenced to 42 Months in Prison for Defrauding Patients and Insurance Companies of $1.5 Million
Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
March 13, 2014
United States Attorney's Office
District of New Jersey
NEWARK, N.J. - Two pharmacists - twin brothers who previously owned the West Orange Pharmacy - were each sentenced 42 months in prison today for reaping at least $1.5 million in illicit gains by defrauding patients, Medicaid and insurance companies over the past 15 years, U.S. Attorney Paul J. Fishman announced.
Robert and William Carlucci, both 70 and of Florham Park, N.J., previously pleaded guilty before U.S. Magistrate Judge Michael A. Hammer to separate informations charging them with conspiring to commit health care fraud. The sentenced was imposed today by U.S. District Judge Faith Hochberg in Newark federal court.
According to documents filed in this case and statements made in court:
Robert Carlucci, William Carlucci, and another conspirator, Leonard "Lenny" Stefanelli, 49, of East Hanover, N.J., participated in a variety of schemes designed to cheat customers and bilk insurance companies out of at least $1.5 million. Stefanelli pleaded guilty before Judge Hammer on Jan. 24, 2014, to an information charging him with illegally dispensing oxycodone and is scheduled to be sentenced April 30, 2014.
They used a practice they referred to as "TRADE-QUICK" to under-fill prescriptions. Each letter in "TRADE-QUICK" corresponded to a number, beginning with "T" for "1" through "K" for "0." The conspirators would enter a two-letter code into the West Orange Pharmacy computer system that indicated how much of the prescription they intended to fill. The code "QK" indicated that a prescription for 90 dosage units would instead be filled with 60 dosage units, because the "Q" stood for the number "6" and the "K" stood for the number "0." After under-filling the prescription, the co-conspirators billed Medicaid and other insurance companies for the fully filled prescription.
Without informing the patients, the conspirators substituted generic drugs for the brand-name drugs prescribed by the patients' physicians. Then they billed Medicaid and other insurance companies for the full amount of the brand-name drugs. The conspirators entered the prescribing physicians' phone numbers into the West Orange Pharmacy computer system as a code to indicate that they were utilizing this particular scheme.
The conspirators also filled outstanding refills on a given prescription without the patients' knowledge and then billed Medicaid and the private insurers for the refills. They entered a dot (".") into the West Orange Pharmacy computer system as a code to indicate that they were utilizing this particular scheme.
The conspirators would sometimes lose money on a given prescription. On those occasions, they looked through a patient's profile and found additional costs that they could pass on to Medicaid and other insurance companies. They would submit bills for these additional costs, and they would enter the code "COV" into the West Orange Pharmacy computer system to reflect this scheme.
The conspirators purchased prescription drugs back from their customers and would reuse those drugs to fill other patient prescriptions. They billed Medicaid and other insurance companies for the full amount of the filled prescriptions.
The conspirators purchased prescription drugs from non-licensed wholesalers at a substantial discount to the drugs' wholesale price, then dispensed these discounted drugs to patients and billed Medicaid and private insurers for the full costs associated with the drugs.
In addition to the prison term, Judge Hochberg sentenced each of the Carlucci brothers to three years of supervised release and fined them $75,000 each.
U.S. Attorney Fishman credited special agents of the DEA Tactical Diversion Squad, under the direction of Special Agent in Charge Carl Kotowski; and special agents of the Food & Drug Administration's Office of Criminal Investigations, under the direction of Mark Dragonetti, with the investigation leading to today's sentencings. He also thanked the Elizabeth, Clinton, Toms River, West Orange, and Marlboro police departments, along with the Essex County Sheriff's Department, for their work on this case.
The government is represented by Assistant U.S. Attorney Rahul Agarwal of the U.S. Attorney's Office Criminal Division in Newark.
Robert Carlucci: Ricardo Solano Esq., Newark
William Carlucci: Mark Berman Esq., River Edge, N.J.
Stefanelli: Carlos Ortiz Esq., Morristown, N.J.