More charges in $50M state benefits prescription drug probe

By DAVID PORTERFeaturesAssociated Press

A police officer and three firefighters were among seven people indicted this week in an alleged $50 million prescription drug scheme involving public employees, the latest charges in an investigation that has already produced nearly two dozen guilty pleas.

A 50-count indictment unsealed Friday by the U.S. attorney's office in Camden, New Jersey, charged the seven with health care fraud, wire fraud and conspiracy. Twenty-three people already have pleaded guilty in connection with the investigation, according to the U.S. attorney's office.

Continue Reading Below

Named in the indictment were William Hickman, a pharmaceutical sales representative; his wife, Sara Hickman, the founder of a medical supply company; Ventnor police officer Thomas Schallus; brothers John Sher and Thomas Sher, both Margate firefighters; Camden firefighter Christopher Broccoli; and business owner Brian Pugh.

A message was left seeking comment from an attorney for Thomas Sher. Court filings didn't list attorneys who could speak for the other defendants. They were scheduled to appear in court in Camden on Friday.

According to the indictment, the defendants exploited the fact that some state and local government employees had insurance that covered expensive compound medications such as pain, scar, antifungal and libido creams. Reimbursements ran as high as thousands of dollars for a one-month supply.

A Louisiana-based compounding pharmacy, not identified in court papers, received more than $50 million in reimbursements from the state's pharmacy benefits administrator in 2015 and 2016, according to the indictment. Sara Hickman's company, Boardwalk Medical, of Northfield, New Jersey, allegedly received a percentage of that amount from the pharmacy.

Sara and William Hickman used the money for themselves and allegedly paid others, including Pugh, to recruit public-sector employees who were paid to get the prescriptions, which they didn't need and hadn't been prescribed by a doctor.

John Gaffney, a doctor based in Margate, pleaded guilty in 2017 to health care fraud for signing bogus prescriptions for patients he never saw. He faces up to 10 years in prison and is scheduled to be sentenced in July.

In addition to the conspiracy and fraud charges, which carry maximum penalties of between 10 and 20 years per count, the Hickmans and Pugh were charged with money laundering and money laundering conspiracy.

Michael Sher, brother of John and Thomas Sher and a former firefighter in Margate, was listed in the indictment as a co-conspirator. He pleaded guilty last year.