Operator of N.J. Medicaid Clinic Pleads Guilty to Fraud Charges

October 29, 2003

New Jersey Attorney General Peter Harvey announced that the Executive Director of a Camden County outpatient mental health clinic, along with the clinic’s senior administrators, have pleaded guilty to Health Care Claims Fraud for reportedly submitting more than $13,000 in inflated patient billings to the Medicaid Program for payment and/or reimbursement.

According to Vaughn McKoy, Director, Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden Brown, Cristino Morales, 60, of Philadelphia, pled guilty on Oct. 27 to Health Care Claims Fraud before Camden County Superior Court Judge Irvin Snyder.

Morales, the executive director of New Hopes of New Jersey, Inc., an outpatient mental health clinic located in Camden, is scheduled to appear before Judge Snyder on Jan. 23, 2004, for sentencing.

Gooden Brown said that Morales was charged in a March 13 State Grand Jury indictment with Health Care Claims Fraud (2nd degree) and Medicaid Fraud (3rd degree). The indictment also charged Maria Carmen Cruz, 39, of Philadelphia, with Health Care Claims fraud and Medicaid fraud. Patrick Traynor, 63, of Abington, Pa., was charged with Medicaid Fraud (3rd degree) by way of an separate Accusation filed by the Insurance Fraud Prosecutor. Traynor was employed as the Program Director for New Hopes, while Cruz served as the clinic administrator.

Gooden Brown noted that Morales, Traynor and Cruz reportedly pleaded guilty at separate hearings before Judge Snyder. In entering a guilty plea, Morales admitted that from May – October, 1999, more than $13,000 in fraudulent invoices were reportedly submitted to the Medicaid Program.

The phony invoices sought payment for mental health counseling and psychological services which were reportedly never provided. Specifically, Morales submitted bills for individual mental health counseling services when such counseling sessions were not provided. (Medicaid regulations prohibit billing for multiple family members.) Morales also admitted submitting fraudulent billings for mental health counseling sessions purportedly provided to children when no such services ever took place.

Traynor pleaded guilty to Medicaid Fraud charges on Feb. 11, reportedly admitting that from March – June, 1999, he prepared, at Morales’ direction, patient progress notes for counseling sessions which never occurred.

As a result of Traynor’s actions, New Hopes submitted fraudulent billings to the Medicaid Program for payment for counseling sessions that did not occur. Traynor is scheduled to be sentenced on Dec. 5 before Judge Snyder. Cruz pleaded guilty to the charges on Sept. 15 and is scheduled to be sentenced on Dec. 5.

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