Edison Resident Charged With Defrauding State Health Care Program

EDISON, NJ – An Edison resident, along with two others, was charged with participating in a long-running scheme to defraud a publicly funded state health care benefit program, of more than $4.5 million, Acting U.S. Attorney Rachael A. Honig announced.

Harry Pizutelli, 62, of Edison, was charged on Wednesday with conspiracy to commit health care fraud. Also charged were C.R. Kraus, 55, and Maritza Flores, 43, of Toms River.

According to court documents, the New Jersey Traumatic Brain Injury Fund (TBI Fund) provides residents who have suffered a traumatic brain injury with services and support, when insurance or other programs is unavailable to meet their needs.

After a patient applies for services, TBI Fund personnel review the application and, if approved, the patient is authorized to secure services from a third-party vendor. Once a patient receives services approved by the TBI Fund, the vendor or service provider submits an invoice for payment. When an invoice is received, TBI Fund personnel review the invoice to ensure that the patient had been approved to receive the services.

If the invoice is approved, an internal payment voucher is generated, authorized by TBI Fund personnel, and submitted to the New Jersey Department of the Treasury for payment, which issues a check directly to the vendor.

Pizutelli was the manager of the TBI Fund and was responsible for the day-to-day operation. He supervised, managed, and oversaw the process by which third-party vendors were paid for services rendered to eligible patients, officials said.

From 2009 through June 2019, Pizutelli, Kraus, Flores, and others conspired to defraud the TBI Fund by misappropriating more than $4.5 million in fraudulent vendor payments for services that were never actually provided, said the court documents.

According to court documents, Pizutelli orchestrated the distribution of fraudulent vendor payments to Kraus, Flores, and others by generating and processing false invoices and internal payment vouchers. Pizutelli generated these invoices and vouchers to give the appearance that Kraus, Flores, and others had provided approved services to eligible patients when they had not, officials said.

Pizutelli approved and transmitted the internal payment vouchers so that his conspirators received vendor payments even though they had performed no services to eligible patients, officials said.

Pizutelli orchestrated these fraudulent payments to maintain and further romantic and/or sexual relationships with Flores and other conspirators, said the documents.

Pizutelli orchestrated the fraudulent payment of more than $4.5 million from the TBI Fund to members of the conspiracy, including more than $4 million in fraudulent distributions to Kraus and Flores, which they used for their own personal benefit and enrichment, according to the statement.

To obscure their fraudulent conduct, Kraus and Flores made material misstatements on their federal income tax returns, by significantly underreporting the income they had derived from the scheme, officials said.

The health care fraud conspiracy charge carries a maximum penalty of 20 years in prison and of $250,000 or twice the gross receipts to the defendants or gross loss sustained by any victims, whichever is greater.