Here's why an Edison man stole $4.5M from fund for patients with brain injuries
TRENTON - An Edison man who formerly was the manager of the New Jersey Traumatic Brain Injury (TBI) Fund has pleaded guilty to defrauding the fund of more than $4.5 million over a decade to maintain and advance romantic and/or sexual relationships with co-conspirators.
Harry Pizutelli, 64, pleaded guilty Wednesday before U.S. District Court Judge Zahid N. Quraishi to one count of conspiracy to commit healthcare fraud, U.S. Attorney Philip R. Sellinger announced.
Martiza Flores, 45, of Toms River, one of Pizutelli's conspirators in the long-running scheme to defraud the fund, also pleaded guilty before Quraishi to conspiracy to commit healthcare fraud and tax evasion.
Pizutelli and Flores each face 10 years in prison and a maximum $250,000 fine on the healthcare fraud charge. Flores also faces 10 years and a maximum $250,000 fine on the tax evasion charge.
Sentencing for Pizutelli is scheduled for May 8 and Flores is scheduled to be sentenced the following day, May 9.
In January 2021, Pizutelli, Flores, and co-defendant C.R. Kraus were charged with conspiracy to commit healthcare fraud in connection with a scheme to defraud the TBI Fund of millions of dollars of public funds for their own personal benefit. The charges against Kraus remain pending.
According to the U.S, Attorney's Office, Pizutelli orchestrated the fraudulent payments to maintain and further romantic and/or sexual relationships with Flores and other conspirators.
According to court documents and statements, the TBI Fund is a publicly funded program run by the New Jersey Division of Disability Services of the New Jersey Department of Human Services. The fund provides residents who have suffered a traumatic brain injury with services and support to maximize their quality of life when funding from insurance, personal resources, or other programs is unavailable to meet their needs.
The services paid for by the TBI fund include physical, occupational, and speech therapy; service coordination; assistive technology; cognitive therapy; neuropsychological services; pharmaceuticals; wheelchair ramp installation and other home modifications; and general home management and maintenance.
When a prospective patient applies for services, TBI Fund personnel review the application and, if approved, the patient is authorized to secure designated services from a third-party vendor. Once a patient receives services approved by the TBI Fund, the vendor or service provider submits an invoice to the TBI Fund for payment.
Pizutelli, as manager of the TBI Fund, was responsible for the day-to-day operations. He supervised, managed, and oversaw the process by which third-party vendors were paid for services.
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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, according to the U.S. Attorney's Office.
Pizutelli orchestrated the distribution of fraudulent vendor payments to Flores, Kraus, and others by generating and processing false invoices and internal payment vouchers.
Pizutelli also generated invoices and vouchers that made it look like Flores, Kraus, and others had provided approved services to eligible patients when, in fact, no service had been provided.
Pizutelli then approved and transmitted the internal payment vouchers.
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Pizutelli orchestrated the fraudulent payments to maintain and further romantic and/or sexual relationships with Flores and other conspirators.
Pizutelli orchestrated the fraudulent payment of more than $4.5 million from the TBI Fund to members of the conspiracy, including more than $940,000 to Flores and more than $3.245 million to Kraus, which they used for their own personal use, the U.S. Attorney's Office said.
Flores and Kraus also evaded the payment of income taxes on the funds fraudulently received by making material misstatements and omissions on their federal income tax returns and significantly underreporting the income they derived from the scheme, officials said.
Email: srussell@gannettnj.com
Suzanne Russell is a breaking news reporter for MyCentralJersey.com covering crime, courts and other mayhem. To get unlimited access, please subscribe or activate your digital account today.
This article originally appeared on MyCentralJersey.com: Here's why an Edison man stole $4.5M from fund for patients with brain injuries
