RED BANK – A local man was sentenced to 13 months in prison for his part in a scheme where he bribed drug addicts to enroll in specific drug rehab locations, who would then pay him a sort of finder’s fee.
Peter J. Costas, 27, of Red Bank, was imprisoned on one count of conspiracy to commit health care fraud, U.S. Attorney Craig Carpenito announced.
He was involved in a scheme in New Jersey and California where he would recruit drug addicts who had private health insurance. Several marketing companies were involved. The most important one had contracts with drug treatment facilities across the country. Costas was employed by this marketing company to recruit potential patients.
Costas would bribe the addicted people to travel to these rehabs, sometimes as much as several thousand dollars. Costas and the owners of the marketing company would arrange for, and pay for the cross country travel. Costas would then stay in contact with the patients, telling them to stay in rehab long enough to generate referral payments.
One Facebook conversation between a patient and Costas had the patient offering to go to multiple locations as long as they got paid each time.
The rehab centers made their money off the patients’ insurance, and would give the marketing company a fee of $5,000 to $10,000 per referral. Costas and other “brokers” would get half.
The rehab centers were some that were known for not being effective or actually allowed drug use on the premises.
The people in the scheme did not care if the addicts were cured.
In addition to the prison term, Costas was sentenced to three years of supervised release and ordered to pay restitution of $502,208.