Randolph man convicted in health insurance scheme involving former Morris Township school principal

Photo: justice.gov/usao-nj
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A federal jury has convicted a Randolph man for scheming to defraud public health benefits plans by ordering medically unnecessary compound prescriptions.

Matthew Puccio, 40, will face up to 10 years in prison and fines of $250,000 or twice the gross gain or loss from his crime, when sentenced this fall, U.S. Attorney Philip R. Sellinger said in a statement.

Puccio was convicted on Tuesday of conspiracy to commit health care fraud, after a seven-day trial before U.S. District Judge John Michael Vazquez.

Puccio’s brother-in-law, Peter Frazzano, former principal of the Sussex Avenue Elementary School in Morris Township, still awaits sentencing.

Frazzano pleaded guilty in 2019 to conspiring to scam the New Jersey School Employees’ Health Benefits Program, the New Jersey State Health Benefits Plan, and other plans, out of $2.7 million between November 2014 and March 2016.

During that same period, authorities say, Puccio was a sales representative for several compounding pharmacies.

Compounded medications–altered drugs–sometimes are prescribed for people with certain conditions, such as allergies to a specific ingredient, or the need for a liquid medication when swallowing pills is difficult.

The U.S. Food and Drug Administration does not approve compounded drugs or guarantee their potency and safety.

Puccio and others targeted and recruited people with health plans that covered compounded medications, and enlisted a pair of New Jersey physicians to write bogus prescriptions for these individuals, authorities told the jury.

The pharmacies billed health plans for these prescriptions, and Puccio and others received kickbacks, authorities said.

“Puccio and his conspirators caused a significant loss to public health benefits programs,” Sellinger said.

Frazzano also faces up to 10 years behind bars. His plea deal calls for $2.7 million in restitution and forfeiture of $270,751 in criminal proceeds. Adjourned several times, his sentencing has been pushed to early 2023.

During his tenure at Sussex Avenue, the grades 3-5 school was recognized for its work with economically disadvantaged pupils, and Frazzano was honored for supporting a program for autistic youths. He resigned in July 2018.

Puccio and Frazzano are married to sisters employed by the Morris School District. One is a guidance counselor, the other, an elementary school principal.

The Puccio case was prosecuted by Assistant U.S. Attorneys Emma Spiro and Shawn Barnes of the Criminal Division in Newark.

Sellinger credited special agents of the FBI, Newark Division, under the direction of Special Agent in Charge James E. Dennehy in Newark, with the investigation leading to Puccio’s conviction.

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