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Prescription Fraud Conviction Shows Broad Sweep of Anti-Kickback Statute and Travel Act

Prescription Fraud Conviction Shows Broad Sweep of Anti-Kickback Statute and Travel Act


The April 2022 conviction of a Gloucester County man for two health insurance fraud scams illustrates how federal prosecutors are using complementary anti-bribery laws to charge people with a litany of offenses against the health care system.

Steven Monaco, 40, was a medical sales representative who was charged with two related scams that defrauded public health insurance plans, according to the U.S. Attorney’s Office for New Jersey. In one scheme, he arranged for kickbacks with a doctor, Daniel Oswari, that allowed Monaco to receive $36,000 in commissions while selling for a medical diagnostic laboratory between late 2013 and 2016. In the second scheme, Monaco and a pharmaceutical sales representative, Richard Zappala, duped insurance plans, including those for New Jersey state and local government plans, into paying for costly compounded prescription medications between 2014 and 2016. They paid Oswari and other medical professionals to sign medically unnecessary prescriptions and to identify and recruit patients with specific types of insurance plans (Medicare). Monaco and Zappala took shares of insurers’ payments to pharmacies for the unnecessary prescriptions. Through this second scheme, Monaco received approximately $350,000 and caused a loss of over $4.6 million to the insurance plans.

Monaco was convicted on various health care fraud, wire fraud and conspiracy counts, including conspiracy to violate the Anti-Kickback Statute (AKS) and the Travel Act. The AKS has been on the books since 1972 and prohibits, among other things, receiving payment from a health care provider in exchange for referring patients to that provider. The AKS applies to cases involving federal health care programs, such as Medicare.

However, the Travel Act charge against Monaco shows the government’s power to employ diverse laws to prosecute bribery. The law criminalizes the use of interstate commerce with the intent to promote or facilitate any unlawful activity, which includes bribery. So, activities like depositing checks or mailing a package in connection with conduct that could be viewed as a kickback or bribe can lead to federal prosecution. Since 2017, federal prosecutors have used the Travel Act in health care fraud cases more frequently. Several high-profile prosecutions have led to convictions and long prison sentences for Travel Act violations.

Prosecutors will continue their use of the Anti-Kickback Statute and Travel Act to prosecute alleged fraud against the healthcare system. If you are charged with any offense under these statutes, you will need a defense lawyer who is highly experienced in the complex world of health care fraud.

At the Law Offices of David Jay Glassman, our founding attorney has more than 40 years of experience handling kickback and bribery cases as a prosecutor and defense lawyer. Call our New Jersey firm at 866-221-1270 or contact us online 24 hours a day to speak to our attorney. We offer phone and video conferences for your convenience.