by Carolyne Volpe Curley / Carolyne@WestEssexNOW.com
UPDATE: According to the US Department of Justice, Michael Esposito was sentenced on July 25 to:
NORTH CALDWELL, NJ - Michael Esposito, 45, of North Caldwell, was charged today with one count of wire fraud. According to US Attorney Paul Fishman, Esposito was arrested today by FBI agents for "fraudulently using funds that he solicited for bulk medical supply and consumer goods transactions."
Esposito appeared this afternoon before US Magistrate Judge Mark Falk in Newark federal court and was released on bail.
According to the complaint, Esposito was the president of three companies - AME Consulting Group, AME Group, and AG Distributors - all of which purported to deal in buying consumer items in bulk from manufacturers for resale to both wholesalers and retailers.
It is alleged that Esposito used funds received electronically for "payments to apparent victim investors from prior transactions, restaurant bills, and salary for himself" rather than for the intended purpose of the transaction.
During a specific August 2013 incident, an individual known as "Victim 1" wired more than $1 million to Esposito for medical supplies and consumer goods transactions which were never received.
The charge of wire fraud is punishable by a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.
Fishman credited special agents with the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, with the investigation leading to the charges.
The government is represented by Assistant US Attorney Andrew Kogan of the U.S. Attorney’s Office Economic Crimes Unit in Newark. Esposito is represented by Brooke M. Barnett Esq., of Newark.
Daniel Metz, 34, of Fairfield, Sentenced to Nine Months for Conspiracy to Commit Wire Fraud, Thursday
FAIRFIELD, NJ - In Trenton today, Daniel Metz, 34, of Fairfield, was sentenced to prison for his role in a scheme to defraud hospitals of more than $800,000, according to US Attorney Paul J. Fishman. In August, Metz had pled guilty to conspiracy to commit wire fraud, a count which carries a maximum potential penalty of 20 years in prison and a $250,000 fine. He was sentenced today to nine months in prison and nine months of home confinement. Charles B. Carey Jr., 35, of Clark, whose cooperation led to Metz’ conviction, was sentenced to three years of probation.
According to documents filed in this case and statements made in court, Metz and Carey both worked for Integra LifeSciences Corporation of Plainsboro, a provider of orthopedic products such as devices and implants for the spine, foot and ankle, hand and wrist, and shoulder and elbow.
Integra initially employed Metz as a Product Specialist in July, 2005. Apparently, surgeons routinely allow product specialists to be present during surgeries and, should they need any of the items which the sales person has with them, they use the items and the hospital is later billed for the items used. Integra Product Specialists bring with them consignment trays with pre-packaged products and they, and their supervisors, are compensated based on salary, sales target-based commission and bonuses.
Metz eventually became Northeast Regional Manager, supervising 16 Product Specialists and Assistant Sales Representatives in Massachusetts, New Jersey, New York, and Pennsylvania. While working in his managerial role, Metz oversaw Carey, who was a Product Specialist from January, 2009, until he resigned in April, 2011.
During court proceedings, Metz admitted that he used various fraudulent methods to overcharge hospitals and surgery centers, including sometimes charging for a greater quantity or a more expensive product than was actually used. He also admitted in court that he taught his fraudulent schemes to those he supervised, including Carey, who admitted to also employing the methods.
Together, Metz and Carey admitted to fraudulently causing medical facilities to pay more than $800,000 in inflated bills. When the fraud was brought to the company's attention, Metz was fired from Integra in April, 2013.
In addition to the prison term and home confinement, US District Judge Joel A. Pisano sentenced Metz to three years of supervised release. As part of their plea agreements, Metz will pay $100,000 and Carey, $77,000, which represents the amounts of money they personally made through the fraud scheme. The defrauded hospitals have already been reimbursed by Integra for the fraudulent charges.
Assisting Fishman with the investigation were special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford and Morris County Prosecutor’s Office detectives, under the direction of Prosecutor Fredric M. Knapp.
The US Attorney's stand-alone Health Care and Government Fraud Unit handles both criminal and civil investigations and prosecutes health care fraud offenses. Since 2010, the office has recovered more than $635 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.
The government was represented by Jacob T. Elberg, Chief of the US Attorney’s Office’s Health Care and Government Fraud Unit, in Newark.
The defense counsel for Metz was Lawrence Lustberg Esq., Newark, and for Carey, Timothy Donohue Esq., of West Orange.