United States District Court for the District of New Jersey in Camden

CAMDEN — An Ocean County pharmaceutical sales representative and a Florida doctor have been indicted in an ongoing $50 million prescription fraud scheme that targeted state health care plans in South Jersey.

A federal grand jury returned a 16-count indictment against Keith Ritson, 40, of the Bayville section of Berkeley Township, and Dr. Frank Alario, 63, of Delray Beach, according to a news release from U.S. Attorney Craig Carpenito. The pair allegedly defrauded the New Jersey state health benefits programs and other insurers out of more than $2.5 million and unlawfully obtained and disclosed individually identifiable patient health information.

Ritson and Alario are charged with conspiracy to commit health care fraud and wire fraud, as well as individual acts of health care fraud and wire fraud, according to the release. They also are charged with a second conspiracy to wrongfully obtain and disclose patients’ individually identifiable health information.

Alario is additionally charged with making false statements in a health care matter, and Ritson faces additional charges of conspiring to commit money laundering and substantive counts of money laundering.

Both were scheduled to appear Thursday before U.S. Magistrate Judge Ann Marie Donio via videoconference.

Prosecutors have said the scheme centers on the billing of the state’s public employee health benefit plans for medically unnecessary compounded drugs, with payouts from prescription reimbursements going to line the pockets of all participants.

Conspirators recruited individuals to get expensive and medically unnecessary compounded medications from Central Rexall Drugs Inc., a Louisiana pharmacy, according to the release.

Hayley Taff, 37, the CEO of Central Rexall, pleaded guilty by videoconference last month to one count of conspiracy to commit health care fraud.

Officials allege Ritson recruited individuals to receive the drugs, which Alario signed off on without examining, speaking with or establishing a physician-patient relationship with the patient, according to the release. Alario sent a form to Central Rexall’s compliance program, falsely attesting he saw and spoke with patients in person.

“Ritson and Alario earmarked established patients of Alario’s medical practices who had insurance that covered the expensive compound medications,” according to the release. “Alario prescribed the medications not for the patient’s need or request, but for the benefits he and Ritson stood to gain.”

Ritson received a percentage of the money Central Rexall received for the medications, and Alario benefited by receiving free meals, entertainment, travel and other remuneration from Ritson, officials said.

In another scheme charged in the indictment, Ritson and Alario accessed patient files to find out their insurance coverage, according to the release. At least once, the pair accessed patient information on an office computer for the purpose of determining insurance coverage for the medications.

“Ritson also had access to parts of Alario’s office where patient information was stored or could be heard and observed, including employee-restricted areas with medical files, fax machines and computers,” officials said, adding Ritson also was frequently present in exam rooms during patient appointments with Alario for the purpose of promoting the compound medications.

Alario commonly introduced Ritson to his patients as his “nephew” or gave the impression that Ritson was affiliated with the medical practice, officials said.

If convicted, the charges carry a variety of maximum potential penalties, from 20 years in prison for the health care fraud and wire fraud conspiracy count to each health care fraud count carrying a maximum penalty of 10 years in prison. All of the offenses also are each punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greater.

Contact: 609-272-7241

mbilinski@pressofac.com

Twitter @ACPressMollyB

Staff Writer

My beat is public safety, following police and crime. I started in January 2018 here at the Press covering Egg Harbor and Galloway townships. Before that, I worked at the Reading Eagle in Reading, Pa., covering crime and writing obituaries.

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