‘Pill mills’ cash in on addiction
HACKENSACK, N.J. — They came by vanloads from downtown Newark. The Medicaid recipients and homeless drug addicts piled into a medical center in a strip mall in Passaic, where they got cursory examinations and bogus diagnoses from a licensed doctor. The patients left with gift cards and prescriptions for narcotic painkillers, investigators said, while Joseph Dituro and his partners got the Medicaid reimbursements.
Dr. Magdy Elamir - a neurologist with an elegant Saddle River home and a lengthy criminal history - found a different way to profit from demand for prescription drugs, authorities said: He was charged with selling prescriptions from his office in Jersey City as part of a sprawling drug ring.
And at the Bridgeview Medical Center in Fort Lee, state investigators said, dozens of patients lined up each day with cash for oxycodone prescriptions written in the shaky hand of Dr. Kamil Mustafa, an anesthesiologist in his late 80s. Mustafa allegedly served as the frontman for a chiropractor whose license had been revoked, lending an illegal pill mill the veneer of medical legitimacy, authorities said.
These schemes and others, outlined in state investigations, police reports and court documents, are a window into a growing world of prescription drug trafficking, one that begins not on a street corner but in a doctor’s office, and has contributed, many say, to the spread of addiction in New Jersey and across the United States.
In particular, they shed light on illicit management companies and on the growing medical subfield of pain management, which officials consider poorly regulated and rife with abuse.
“I think the mechanism by which these businesses are set up lends itself to criminality,” said Bergen County Prosecutor John L. Molinelli. “It is very lucrative, financially.”
The past two decades have seen an explosion of pain clinics, alternative wellness and rehabilitation practices across the country, driven in part by demand for opiate painkillers and their increased use to treat everything from terminal illness and chronic pain to dental surgery, experts said. These businesses, legitimate or not, operate in a gray area outside the traditional medical system.
“Some medical management companies with names that incorporate benign terms like ‘pain management’ and ‘wellness’ have transformed street-corner drug dealing into an orderly and seemingly ordinary business endeavor,” said a report released this month by the State Commission of Investigation, the result of a two-year probe into the roots of prescription drug addiction in New Jersey.
Walk-in clinics now line the strip malls and commercial streets of North Jersey; their exact number is hard to verify, officials said. “Just anecdotally, driving around, you become more attuned to it,” said Lee Seglem, the commission’s assistant director. “I couldn’t believe how many I was seeing. Drive through Paramus and look at the strip malls.
“The big problem is that you have to assume that most are legitimate,” Seglem said, “But we found some, and it’s so easy to subvert the system, the way it’s structured.”
That’s because of an anemic and sluggish state regulatory system, filled with loopholes. The New Jersey State Board of Medical Examiners licenses and regulates physicians, but the commission’s report called the board’s disciplinary actions “weak and infrequent.” In addition, there is no comprehensive oversight of medical businesses in New Jersey. While state laws regulate how these businesses are meant to be set up - for example, a practitioner with a lesser degree, such as a chiropractor, cannot legally hire a licensed medical doctor - little enforcement is in place.
In the meantime, drug-related deaths in the state increased by 20 percent between 2010 and 2011, according to the state Medical Examiner’s Office: Three-quarters of them involved prescription drugs. Oxycodone, a strong opiate-based painkiller, was involved in a third of the 1,008 drug-related deaths in 2011.
State investigators found so many prescription pills in circulation, they initially assumed dealers were hijacking truckloads of drugs, Seglem said. “There is an extraordinary amount of this medication making its way onto the street.”
Within a 19-month period, a doctor at a Camden chiropractic clinic reportedly wrote so many oxycodone prescriptions that state investigators estimated the street value of the pills at $10 million. Oxycodone, when purchased legally, costs between $100 and $150 for a bottle of 100 tablets. On the street, “oxies” can reach prices of a dollar a milligram: $30 for a 30 milligram pill - that same bottle can sell for $3,000.
“This has always been a problem, but it’s getting a lot worse,” said Ed Ponzini, a pharmacist and owner of three pharmacies in Wayne, Butler and Livingston. “The abuse potential is so high and there isn’t a system in place to block it.”
In the past five years, at least nine doctors in North Jersey have been named in prescription pill trafficking schemes, authorities said.
Lured by the promise of easy money, or drawn into partnerships with criminal enterprises, these doctors set up shadow practices, churning out scripts, authorities said. Pharmacists, dentists and chiropractors in North Jersey have also been implicated in the illicit drug trade.
Dituro completed medical school in Guadalajara, Mexico. In the 1980s, he worked as an emergency room physician in New Jersey and as a medical director in the New Mexico prison system. He opened a holistic health store in Los Angeles but returned to New Jersey when the business went under, according to the state commission report.
In early 2009, he responded to a Craigslist ad seeking a “medical director,” and was hired at Passaic Medical Center, operated by a management company owned by unlicensed businessmen, according to the report. Dituro told the commission that his staff sought out Medicaid recipients, transporting dozens each day to the offices for examinations and prescriptions.
By May 2011, Dituro was drawing so many people looking for fraudulent scripts that he had to hire a bouncer, according to the report. Between January 2010 and September 2011, Dituro wrote more than 2,600 prescriptions - drugs the patients could use themselves or sell on the street, the report said. The medical center, meanwhile, pocketed the insurance claims. Within two years, Dituro took in more than $1.6 million. In 2011, he ranked third in the state for the number of Medicaid claims filed.
Dituro’s medical license is currently inactive, records show, but no charges have been filed. Dituro testified before the commission, which referred its findings to the state Attorney General’s Office.
Bridgeview Medical Center in Fort Lee was another case, described in the report and in court documents, of an illicit partnership fronted by a doctor. Mustafa was already semiretired when he went to work with Joseph Gianetti, a chiropractor whose license had earlier been revoked due to professional misconduct, state records show.
In 2006, Gianetti pleaded guilty to health care fraud and tax evasion, and in 2007 was sentenced to four months in prison and ordered to pay $688,000 in restitution, records show.
Shortly thereafter, investigators said, Gianetti returned to the Bridgeview facility, listing Mustafa as an owner. But Mustafa was merely a “conduit for generating cash via the sale of narcotic prescriptions” for $300 or more apiece, according to the report, which portrayed Gianetti as the brains behind the operation.
Mustafa allegedly wrote a torrent of prescriptions for thousands of patients he saw for mere minutes - on one day in April 2011, he saw 77 patients, according to the state report. Former patients told investigators that Mustafa was “frail, unkempt and distracted,” and testified that Gianetti often had to re-sign Mustafa’s signature and patients’ names on prescriptions.
The pair were arrested in 2012 on licensing and drug-related charges.
Reached recently at the rebranded Bridgeview Rehabilitation and Medical Arts Center in the same Main Street offices, Gianetti said the report had distorted facts and contained untrue allegations. He said he was the office manager, not the owner, and that the center “no longer writes any narcotic prescriptions.”
Gianetti confirmed that Bridgeview had accepted cash from patients, and that he and other staff members had completed prescriptions for Mustafa, calling it standard practice in doctors’ offices. “Dr. Mustafa would scribble so illegibly, pharmacies used to call,” Gianetti said.
Bridgeview was not a “pill mill,” Gianetti said, calling the report’s allegations of thousands of patients seen by Mustafa “absolutely 100 percent a lie.”
“You go to work for a salary,” Gianetti said. “And now if you’re successful, you’re unscrupulous?”
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Dr. Michael Chung Kay Lam had a successful private practice in Fort Lee, but when he was arrested in 2010, authorities said Lam took in hundreds of thousands of dollars in cash on the side selling oxycodone and Percocet prescriptions for up to $500 a pop to patients he did not examine.
Lam pleaded guilty in 2012, and his license was suspended. “This is not a crime of need, but a crime of greed, pure and simple,” assistant Bergen County Prosecutor David Calviello said at Lam’s 2012 sentencing. Lam came to the attention of authorities only after lines of cars from faraway counties began to fill the street outside his office.
“It’s always a concern when something can go pretty much unchecked,” said Tim McMahon, a special agent with the federal Drug Enforcement Administration’s New Jersey office. “A lot of the investigations come from people phoning in tips. We may not be aware of it, unfortunately, until somebody calls up and gives us information.”
Dr. Priscilla Ilem, an 85-year-old Wayne psychiatrist who pleaded guilty in 2012 for illegally selling oxycodone prescriptions, had twice before come under scrutiny for her prescription practices. In 2001, the DEA suspended Ilem’s license to prescribe controlled substances, according to state records.
The DEA did not seek disciplinary action and restored Ilem’s license in 2005 - in the meantime, though, Ilem continued to write prescriptions. In 2006, Ilem was reprimanded by a state administrative law judge and paid a $13,000 fine.
When Magdy Elamir was indicted in May 2012 by a state grand jury on charges that he wrote prescriptions with a suspended license, it was just the latest in a two-decade string of legal trouble.
Elamir, received a medical degree from Cairo University and was licensed by New Jersey in 1982. After establishing his neurology practice, Elamir began branching out into side businesses: unlicensed MRI centers that led to a lawsuit for fraudulent insurance claims and an HMO that was liquidated by federal authorities after losing $25 million in Medicaid reimbursements.
In 2009, Elamir was among 32 people arrested in an investigation into an elaborate prescription drug ring involving drug runners and crooked pharmacists that authorities said put illicit prescription painkillers on the streets in Bergen, Hudson and other counties. The 2010 state indictment alleged that he wrote painkiller and anti-anxiety prescriptions for cash without examining patients and submitted claims for Medicaid reimbursements.
Elamir was “no different than a street-corner drug dealer,” Deputy Attorney General Debra Conrad said in court filings. “He sold drugs to people for money. The only difference is that he did so under cover of his medical practice.”