Two New Jersey Men Sentenced to Prison for Roles in Multimillion-Dollar Compounded Prescription Drug Scheme

NEWARK, N.J. – Two New Jersey brothers have been sentenced to prison for their roles in a scheme to defraud public and private health benefits programs, U.S. Attorney Philip R. Sellinger announced today.

John Cuffari, 61, of Cedar Grove, New Jersey, was sentenced to 17 months in prison for his role in defrauding benefits programs of at least $5.3 million for the billing of medically unnecessary compounded prescriptions. He previously pleaded guilty to an information charging him with conspiracy to commit health care fraud. U.S. District Judge Renee Bumb imposed the sentence on Jan. 4, 2023, in Camden federal court.

Christopher Cuffari, 57, of Little Falls, New Jersey, was sentenced to 27 months in prison for his role in defrauding benefits programs of $7.89 million for the billing of medically unnecessary compounded prescriptions. He previously pleaded guilty to an information charging him with conspiracy to commit health care fraud. U.S. District Judge Peter Sheridan imposed the sentence on Jan. 3, 2024, in Trenton federal court.

“This investigation is only one example of how the belief that these cases have no victims is not true,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Fraud creates tougher regulations and policies from government agencies and insurance companies to prevent it from taking place. That trickles down to patients who have a much harder time getting the healthcare they may desperately need. The Cuffari brothers are just a small cog in a tremendously frustrating wheel of criminals, but we won't be deterred from bringing every one of them to justice.”

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

Compounded medications are specialty medications mixed by a pharmacist to meet the specific medical needs of an individual patient. Although compounded drugs are not approved by the Food and Drug Administration (FDA), they are properly prescribed when a physician determines that an FDA-approved medication does not meet the health needs of a particular patient, such as if a patient is allergic to a dye or other ingredients in the prescription.

Between November 2014 and July 2016, John Cuffari participated in a conspiracy that involved the submission of fraudulent prescriptions for compounded medications to public and private insurance plans. Christopher Cuffari participated in the conspiracy between November 2014 and September 2017. The scheme centered on the discovery that certain insurance plans paid for prescription compounded medications – including scar creams, wound creams, and metabolic supplements/vitamins – at exorbitant reimbursement rates.

John and Christopher Cuffari worked as sales representatives for several marketing companies and compounding pharmacies and targeted individuals who had insurance plans that covered compounded medications. They then convinced those individuals to obtain prescriptions for compounded medications, regardless of medical necessity, often by providing them with cash payments. In order to obtain prescriptions for compounded medications for some of the recruited individuals, the defendants caused payments to be made to a New Jersey-based physician.

In addition to the prison terms, both defendants were sentenced to three years of supervised release.

U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to the sentencings.

The government is represented by Assistant U.S. Attorney Chelsea D. Coleman of the U.S. Attorney’s Office, Opioid Abuse Prevention and Enforcement Unit in Newark.