Daniel Passafiume, Multimillion-Dollar Compounded Prescription Drug Scheme, New Jersey 2021
New Jersey Man, Former Police Officer, Admits Role in $3.27 Million Prescription Scheme
A former police officer in New Jersey has pleaded guilty to his role in a multimillion-dollar scheme that defrauded state health benefits programs through the submission of medically unnecessary prescriptions for compounded medications. Acting U.S. Attorney Rachael A. Honig announced the guilty plea of Daniel Passafiume, 45, of Monroe, New Jersey.
According to documents filed in this case and statements made in court, between January 2014 and November 2016, Passafiume and a conspirator, identified as CC-1 in the information, marketed certain prescription “compounded medications,” including vitamins and pain creams, to beneficiaries of New Jersey state insurance plans, including the State Health Benefits Program (SHBP). These insurance plans paid thousands of dollars for compounded medications, which are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient.
Passafiume and his conspirator had agreements with pharmacies to collect large commission payments for each prescription they obtained for the pharmacy. Passafiume and CC-1 found individuals with these insurance plans and connected them with doctors who were willing to sign prescriptions without an examination or a determination that the individuals needed the compounded medications. Those recruited to obtain prescriptions included employees of a New Jersey police department, family members of these employees, and Passafiume’s own family members. At times, Passafiume provided beneficiaries with cash, checks, and gift cards for agreeing to obtain these prescriptions.
The conspiracy charge carries a maximum potential penalty of 10 years in prison and a fine of $250,000 fine, or twice the gain or loss from the offense, whichever is greater. As part of his plea agreement, Passafiume must forfeit $284,659 in criminal proceeds and pay restitution of $3.27 million. Sentencing is scheduled for July 12, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, with the investigation leading to today’s guilty plea.
The government is represented by Senior Trial Counsel Leslie Faye Schwartz of the Special Prosecutions Division and Assistant U.S. Attorney Osmar J. Benvenuto of the Health Care Fraud Unit in Newark.
Defendant information:
Defendant Name: Daniel Passafiume
Criminal Charges: Conspiring to commit health care fraud
City and State: Monroe, New Jersey
Date: July 12, 2021
Sentence or Outcome: Guilty plea, 10 years in prison, $3.27 million in restitution
Dollar Amounts: $284,659 in criminal proceeds, $3.27 million in restitution
Key Facts
- State: New Jersey
- Category: Healthcare Fraud
- Source: DOJ Press Release â†â€â€
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