Former N.J. School District Employee Charged with Defrauding State Health Benefits Program

March 18, 2004

New Jersey Attorney General Peter Harvey announced that a former Linden public school employee has been charged by the Division of Criminal Justice – Office of Insurance Fraud Prosecutor with Health Care Claims Fraud and theft by deception for submitting more than $20,000 in fraudulent health insurance claims to the State Health Benefits Program.

According to Vaughn McKoy, director, Division of Criminal Justice and Insurance Fraud Prosecutor Greta Gooden Brown, Paul J. Scrudato, 56, of Toms River, Ocean County, was charged via a State Grand Jury indictment with Health Care Claims Fraud (2nd degree) and theft by deception (3rd degree). If convicted, Scrudato faces up to 20 years in state prison and a fine of up to $180,000.

Gooden Brown noted that the State Grand Jury indictment alleges that between October, 1999 and April, 2003, Scrudato submitted $21,916 in fraudulent health insurance claims to Delta Dental and Horizon Blue Cross/Blue Shield.

The indictment charges the claims were fraudulent in that Scrudato represented that a woman with whom he resided and her children from a previous marriage were his lawful dependants for purposes of the State Health Benefits Program. Under the terms of the health benefit contract, the woman nor her children were considered lawful dependants and were not eligible to receive state health and/or dental insurance coverage. At the time the fraudulent claims were submitted, Scrudato was employed at the McManus Middle School in Linden as an Information Systems Administrator.

Gooden Brown noted that Delta Dental and Horizon Blue Cross/Blue Shield administer dental and health insurance claims as third party administrators for the State Health Benefits Program. Health and dental claims are paid for by tax dollars as a benefit of employment with the State of New Jersey or other government employment.

The indictment was handed up to Mercer County Superior Court Judge Linda Feinberg, the Assignment Judge in charge of the State Grand Jury, on March 16.

The case will be assigned to the Ocean County Superior Court for trial. Scrudato will be ordered to appear for arraignment and bail.

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