Former N.J. School Employee Pleads Guilty to Defrauding State Health Benefits Program

June 4, 2004

New Jersey Director of Division of Criminal Justice Vaughn McKoy announced that a former Lambertville public school employee has pleaded guilty to theft by deception for submitting fraudulent health insurance claims to the State Health Benefits Program.

According to Insurance Fraud Prosecutor Greta Gooden-Brown, Paul J. Scrudato, 56, of Toms River, Ocean County, pleaded guilty before Ocean County Superior Court Judge James Citta to charges contained in a March 16 indictment filed by the Division of Criminal Justice. Scrudato pleaded guilty to one count of theft by deception (3rd degree). When sentenced on July 23, Scrudato faces up to five years in state prison and a fine of up to $15,000.

Gooden-Brown noted that in pleading guilty, Scrudato reportedly admitted that between June, 2001 and April, 2003, he falsely represented to his employers at the South Hunterdon Regional School District 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.

An investigation by the Division of Criminal Justice – Office of Insurance Fraud Prosecutor revealed that, 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.

As a result of Scrudato’s misrepresentation, Horizon Blue Cross and Blue Shield of New Jersey, Delta Dental Insurance Company, and the New Jersey Division of Pension and Benefits paid more than $5,300 in health care claims submitted for the woman’s children.

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.

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