Pharmacy Executives and Pharmacist Face Charges Over $33M Health Care Scheme in New Jersey

Jersey City bank fraud sentence

Pharmacy Executives and Pharmacist Face Charges Over $33M Health Care Scheme in New Jersey

NEWARK, N.J. – Today, three individuals linked to the pharmaceutical industry were brought before the court on allegations of submitting false claims to Medicare and TRICARE, as revealed by U.S. Attorney Vikas Khanna. The trio is also accused of engaging in illicit kickback activities.

Staten Island resident William B. Welwart, 69; Ethan B. Welwart, 35, from Bolivar; and Gary Kaczka, 62, of Saddle Brook, have been indicted on 22 counts, including health care fraud, wire fraud, and conspiracy to commit these offenses. Both William and Ethan Welwart face additional charges related to wire fraud and violations of the federal anti-kickback statute. All three were presented before U.S. District Judge Esther Salas and have been released on a bond of $250,000 each.

Key points from the indictment:

  • Between January 2017 and December 2020, the accused ran several pharmacies, notably Apogee Bio-Pharm LLC in Edison. William B. Welwart held the position of CEO and owner, while Ethan B. Welwart managed operations and reportedly owned other pharmacies involved in the alleged fraud. Kaczka served as the head pharmacist at Apogee.
  • The group is said to have collaborated with marketing firms to produce unnecessary prescriptions via telemarketing and telemedicine tactics. In return for directing prescriptions to their pharmacies, the Welwarts are believed to have offered kickbacks to these marketing entities.
  • These marketing firms identified potential beneficiaries for high-cost medications and persuaded them over the phone to accept these drugs. The prescriptions, along with recorded calls, were then sent to telemedicine companies, which in turn paid physicians to approve them. The prescriptions were then directed to pharmacies like Apogee, which sought reimbursements from federal health programs. A portion of these reimbursements was then allegedly given back to the marketing firms as kickbacks.
  • The total loss incurred by Medicare and other federal health programs due to this scheme is estimated to be over $33 million.

The accused face varying potential prison sentences for their charges, ranging from five to 20 years, along with hefty fines.

U.S. Attorney Khanna acknowledged the efforts of the FBI and other agencies in uncovering this scheme.

It’s essential to note that these are mere allegations, and the accused are considered innocent until proven otherwise.


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