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Press Release

Toms River, New Jersey, Sports Medicine Doctor Admits Accepting $60,000 In Cash Bribes For Prescription Referrals, Health Care Fraud

For Immediate Release
U.S. Attorney's Office, District of New Jersey

CAMDEN, N.J. – A sports medicine doctor with a practice in Toms River, New Jersey, today admitted accepting more than $60,000 in cash bribes in return for referring pain cream prescriptions and falsifying health records on behalf of Prescriptions R Us (PRU), a compound pharmacy in Lakewood, New Jersey, U.S. Attorney Paul J. Fishman announced.

James Morales, 45, of Toms River, pleaded guilty before U.S. District Judge Joseph H. Rodriguez in Camden federal court to an information charging him with conspiracy to accept kickbacks and commit health care fraud.

According to documents filed in this case and statements made in court:

Prescriptions R Us (PRU) was owned and operated by Vladimir Kleyman, 44, of Lakewood, New Jersey. As a compounding pharmacy, PRU prepared medication using different types and dosages of drugs in order to provide more personalized medications for patients. PRU supplied a topical cream for pain treatment that was made from ketamine (a Schedule III non-narcotic), lidocaine, diclofenac and other ingredients.

Morales operated Shore Sports Medicine, a medical practice in Toms River. Morales admitted that from February 2013 through December 2013, he accepted at least $60,000 in cash bribes from PRU in exchange for referring pain cream prescriptions.

Morales also admitted that on Dec. 19, 2013, Kleyman told Morales that the quantity of pain cream that Morales had prescribed was too high to get reimbursed by Horizon, a private health insurance plan. Kleyman asked Morales to start omitting quantity information on his prescriptions for the compounded pain cream. Morales admitted that he agreed to omit quantity information on prescriptions for patients enrolled in Horizon in order to help PRU obtain reimbursements.

The conspiracy charge to which Morales pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is scheduled for Oct. 5, 2015.

Kleyman previously pleaded guilty to conspiring to pay kickbacks in exchange for prescription referrals and committing health care fraud. His sentencing is scheduled for July 7, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel; and U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, with the ongoing investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Jane H. Yoon and Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

U.S. Attorney Paul J. Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes. 

Defense counsel: A. Ross Pearlson Esq., Matthew E. Beck Esq., William Finizio Esq., West Orange, New Jersey

Updated June 29, 2015

Press Release Number: 15-246