The former manager of the New Jersey Traumatic Brain Injury Fund (TBI Fund) and a conspirator pleaded guilty for their roles in a decade-long scheme to defraud the fund of more than $4.5 million.
In a Jan. 4 press release, U.S. Attorney for New Jersey Philip Sellinger announced Harry Pizutelli, of Edison, pleaded guilty to a charge of conspiracy to commit health care fraud and Maritza Flores, of Toms River, pleaded guilty to a charge of conspiracy to commit health care fraud and a charge of tax evasion.
The pair, along with C.R. Kraus, were charged in January 2021 with criminal conspiracy to commit health care fraud in connection with the scheme, which ran from 2009 to 2019, defrauding the TBI Fund of public funds for their own personal benefit. The charges against Kraus remain pending.
Pizutelli was the manager of the TBI Fund, a publicly funded program run by the New Jersey Division of Disability Services that provides Garden State residents who have suffered a traumatic brain injury with services and support for their quality of life, and to help fill in any financial gaps. Services provided through the TBI Fund include physical, occupational and speech therapy; service coordination; pharmaceuticals; wheelchair ramp installation; home modifications and maintenance; and more.
In his role as TBI Fund manager, Pizutelli was responsible for day-to-day operations, during which he supervised, managed and oversaw the process of third-party vendors receiving payment for services provided to TBI Fund patients.
Prospective patients apply for services and, if approved by the TBI Fund, the patient can secure those services from a third-party vendor. Those vendors then submit an invoice to the TBI Fund. If the invoice is approved, an internal payment voucher is generated and authorized, and submitted to the state’s Department of Treasury, which issues a check directly to the vendor.
According to court documents and statements, prosecutors alleged that from 2009 through June 2019, the three defendants and others conspired to the scheme by misappropriating more than $4.5 million in fraudulent vendor payments for services that were never rendered.
“Pizutelli orchestrated the distribution of fraudulent vendor payments to Flores, Kraus, and others by generating and processing false invoices and internal payment vouchers,” according to court documents and statements released by the U.S. Attorney’s Office. “Pizutelli generated these invoices and vouchers to give the appearance that Flores, Kraus, and other conspirators had provided approved services to eligible patients when, in fact, they had not provided any services. Pizutelli then approved and transmitted the internal payment vouchers.”
Prosecutors alleged that part of the motive for Pizutelli orchestrating these fraudulent payments was to maintain and further romantic relationships with Flores and other conspirators.
They say that the fraudulent payouts included more than $940,000 to Flores and more than $3 million to Kraus. They also allege that Flores and Kraus went another step further by evading taxes through making misstatements on tax returns and underreporting the ill-gotten gains from the fraudulent scheme.
The conspiracy charge that Pizutelli and Flores pleaded guilty to carries a maximum penalty of 10 years in prison and a maximum fine of $250,000 or twice the gross loss sustained by victims, whichever is greater. The tax evasion charge carries a maximum penalty of 10 years in prison and a maximum fine of $250,000.
The U.S. Attorney’s Office says that Pizutelli will be sentenced May 8 and Flores on May 9.