Health Care Fraud

By Jay W. McCann

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News

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Last Modified on Nov 27, 2025

As the retired Chief of the Passaic County Prosecutor’s Insurance Fraud and Financial Crimes Unit, Jay W. McCann handled many cases involving Doctor, medical insurance/health care and pharmacy fraud.

The U.S. Attorney’s office also prosecutes these matters as demonstrated by their recent prosecution of Nestor Jaime of the Pine Brook section of Montville. Mr. Jaime operated the Fabio Pharmacy formerly on Market Street, Paterson, Passaic County, New Jersey.

Pharmacy owners must be aware of their obligation not to file false claims regarding their business.

Mr. Jaime was indicted for Health Care Fraud pursuant to Title 18 of the United States Code for violating sections 1347 and 2. The government claimed the false submissions were in excess of 2.5 million. The charge of health care fraud has a maximum penalty of 10 years in prison and fine of $250,000 or more depending on the amount of the fraud.

The pharmacy participated in the Medicare Program. The Medicare Program (AMedicare@) is a federally funded health care program that provided medical insurance benefits for individuals aged 65 and older and certain disabled individuals who qualified under the Social Security Act. The benefits available under Medicare were governed by federal statutes and regulations. Medicare was administered from the Centers for Medicare and Medicaid Services (ACMS@), a federal agency within the U.S. Department of Health and Human Services (AHHS@). Individuals who received Medicare benefits were referred to as Abeneficiaries. Medicare was divided into four parts: hospital insurance (Part A), medical insurance (Part B), Medicare Advantage (Part C), and prescription drug benefits (Part D). Medicare beneficiaries obtained Part D benefits in two ways: (a) by joining a Prescription Drug Plan, which covered only prescription drugs; or (b) by joining a Medicare Advantage Plan, which covered both prescription drugs and medical services (collectively, APart D Plans@). These Part D plans were operated by private health insurance companies approved by Medicare and were often referred to as drug plan Asponsors. Medicare was a Ahealth care benefit program,@ as defined in Title 18, United States Code, Section 24(b).

In this case, the defendant filed approximately 591 false or fraudulent claims to Medicare for the drug Dificid, which doctors prescribe to treat diarrhea (Clostridioides difficile infections). Mr. Jaime submitted and caused the submission of claims for Dificid on behalf of Medicare beneficiaries even though the Fabio Pharmacy did not receive any prescriptions for Dificid from those beneficiaries, health care providers. Nevertheless, Mr. Jaime, without authorization, included the health care providers, NPI on the false and fraudulent claims for Dificid to make it appear as though the claims were for reimbursements for legitimate prescriptions that were sent to and filled by the Fabio Pharmacy. The claims were on the high end of the drug=s price range, about $4,500 per prescription. If the claims were legitimate, the pharmacy would have needed to dispense at least 11,820 units of Dificid. However, his pharmacy only purchased approximately 100 units. Clearly the Medicare claims were fraudulent.

If you have been charged with the crime of health care fraud in New Jersey, you are encouraged to contact Jay W. McCann or one of the skilled criminal defense attorneys at the law firm of Wronko & Loewen.