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Two Atlantic County Men Admit Health Care Fraud Conspiracy Targeting State Health Benefits Programs

By kbm0423 on
Atlantic County

Two New Jersey men today admitted defrauding New Jersey state and local health benefits programs and other insurers by submitting fraudulent claims for medically unnecessary prescriptions, Attorney for the United States Vikas Khanna announced.

According to federal officials, Brian Pugh, 45, of Absecon and Thomas Schallus, 45, of Northfield, pleaded guilty to one count each of conspiracy to commit health care fraud.

According to documents filed in this case and statements made in court:

Pugh and Schallus were part of a criminal conspiracy in which state and local government employees were recruited and compensated to receive medically unnecessary compound prescription medications. 

Pugh and Schallus caused the pharmacy benefits administrator to pay approximately $1.47 million and $477,958.00, respectively, for medically unnecessary compounded prescription medications for individuals they recruited into the scheme.

Pugh and Schallus were previously charged alongside others in an indictment with conspiracy to commit health care fraud and wire fraud and other offenses. 

Conspiracy leader William Hickman pleaded guilty in June of 2020 to defrauding New Jersey health benefits programs and other insurers out of more than $50 million and is awaiting sentencing. 

Charges remain pending against co-defendants John Sher, Thomas Sher, and Christopher Broccoli, who are set to proceed to trial before Judge Kugler in Camden federal court on August 15. 

The charges against those three defendants are merely accusations, and they remain innocent unless and until proven guilty.