C.R. Kraus was convicted in Trenton federal court last week. The 10-count indictment pertains to a scheme to defraud the New Jersey Traumatic Brain Injury Fund of millions of dollars for personal benefit.
Prosecutors had accused Kraus, 58, of Manville, of participating in the scheme along with conspirators, Harry Pizutelli and Maritza Flores. Pizutelli and Flores each pleaded guilty to charges in January.
The state runs the publicly funded TBI Fund . It provides residents who suffered a traumatic brain injury with services and support to maximize their quality of life when funding from insurance, personal resources or other programs is unavailable to meet their needs. Pizutelli was the manager of the fund. He was responsible for day-to-day operations. That included supervising, managing and overseeing the process of paying third-party vendors for services rendered to beneficiaries.
“From 2009 through June 2019, Pizutelli, Kraus, and Flores conspired to defraud the TBI Fund by misappropriating more than $4 million in fraudulent vendor payments for purported services that were never actually provided,” according to the case documents and trial evidence released by prosecutors from the U.S. Attorney’s Office for the District of New Jersey. “Pizutelli orchestrated the distribution of fraudulent vendor payments to Flores and Kraus by generating and processing false invoices and internal payment vouchers.
"Pizutelli generated these invoices and vouchers to give the appearance that Flores and Kraus had provided approved services to eligible patients when, in fact, they had not provided any services," according to the documents, which added: "Pizutelli then approved and transmitted the internal payment vouchers so that his conspirators received vendor payments.”
'Especially egregious'
Prosecutors alleged that Kraus received more than $3.245 million in fraudulent distributions. He also subsequently evaded taxes to obscure that conduct, they said.
U.S. District Judge Zahid Quraishi in Trenton heard the trial. Kraus was convicted of all 10 counts:
- One count of conspiracy to commit health care fraud,
- Five counts of health care fraud, and
- Four counts of tax evasion.
Each count carries a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is set for Oct. 8.
“This defendant was convicted of multiple crimes for his role in a conspiracy that resulted in the theft of millions of dollars earmarked for victims of traumatic brain injuries,” said
U.S. Attorney for New Jersey Philip Sellinger . “Stealing resources intended to help New Jersey residents who are already copying with serious challenges is especially egregious.”
“People battling to regain their lives after surviving a traumatic brain injury, and then digging out from the astronomical costs of healthcare related to the injury are the victims in this case,” said FBI-Newark Special Agent in Charge James Dennehy. “Those people should have been the recipients of money from a fund created specifically to help them not Kraus and his co-conspirators.”
“My office, and our law enforcement partners, are always working to root out this kind of criminal activity and ensure the guilty face appropriate punishment,”
Sellinger added.
“We are obviously disappointed with the verdict,” Bruce Throckmorton, an attorney for Kraus, told NJBIZ. “Mr. Kraus was a nave pawn in the scheme, who was deceived by his long-time friend. We anticipate filing an appeal of the conviction at the proper time.”
Editor's note: This story was updated at 9:21 a.m. ET April 22, 2024, to include a statement from Kraus' attorney.
See also:
Copyright © 2024 BridgeTower Media. All Rights Reserved.
Most Popular
Comments / 0