A New Jersey man has admitted to defrauding the state’s health benefits plan to the tune of $4.3 million, becoming the ninth person to plead guilty in a wide-ranging investigation into abuse of the plan.
Pharmaceutical sales representative Richard Zappala pleaded guilty Thursday to conspiracy to defraud a state health benefits plan. Zappala has been ordered to pay back the $4.3 million, and forfeit more than $1.4 million for participating in a prescription benefits fraud scheme in which people received kickbacks for filling prescriptions for compounded medication.
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Zappala worked for Alabama-based Cobalt Healthcare Consultants, according to a report by the Press of Atlantic City. The company provides “sales and consulting services for blood-based cancer diagnostic testing companies,” according to its Bloomberg business profile.
Prosecutors said that Zappala acted as a recruiter in the benefits scam, convincing people to get expensive and unnecessary medications from an out-of-state pharmacy. The prescriptions included pain medications, scar, antifungal and libido creams and vitamins, according to the Press.
Zappala faces up to 10 years in federal prison for his role in the fraud. He is scheduled to be sentenced in January.
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