CAMDEN, NJ—A pharmacist with a compounding pharmacy in Lakewood, New Jersey, admitted today to paying tens of thousands of dollars in cash bribes to physicians for referring pain cream prescriptions, defrauding health care benefit programs out of hundreds of thousands of dollars, U.S. Attorney Paul J. Fishman announced.

The president and pharmacist-in-charge of Prescriptions R U.S.—Vladimir Kleyman, 43, of Lakewood, New Jersey—pleaded guilty to an information charging him with conspiracy to pay kickbacks and to commit health care fraud. Kleyman, who originally was charged by complaint in January of 2014, entered his guilty plea before U.S. District Judge Joseph H. Rodriguez in Camden federal court.

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

From January 2013 through January 2014, Kleyman provided another individual with tens of thousands of dollars in cash and checks to provide bribes to physicians for referring prescriptions for a compounded pain cream to Prescriptions R US. Compounding pharmacies prepare medication, using different types and dosages of drugs, in order to provide more personalized medications for patients. The compounded pain cream prepared by Prescriptions R U.S. in this case contains several components, including ketamine (a Schedule III non-narcotic), lidocaine and diclofenac.

During his guilty plea proceeding, Kleyman admitted that in a series of meetings in November and December 2013 alone, he arranged for the middleman to receive more than $40,000 in cash or checks with the understanding it would be used to pay bribes for the referral of pain cream prescriptions.

Kleyman also admitted he knew certain health insurance carriers, including federal health care benefit programs, did not cover compounded pain cream, but he nevertheless dispensed the pain cream to these patients and obtained payment from their insurance carriers by falsely representing the pain cream to be other covered items. Kleyman also acknowledged he defrauded health insurance carriers by making false and misleading representations about the quantity of the pain cream that he dispensed and the frequency with which he dispensed it. As a result, private insurance payors paid the pharmacy hundreds of thousands of dollars.

The conspiracy count with which Kleyman is charged carries a maximum potential penalty of five years in prison and a $250,000 fine. The government is also seeking Kleyman’s forfeiture of any proceeds derived from his offense. Sentencing is currently scheduled for Jan. 20, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark; the U.S. Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Thomas O’Donnell; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the ongoing investigation.

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 $540 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.

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Defense counsel: Alain Jeff Ifrah, Esq., Washington