Essay Sample on Pension Scams

Introduction

Pension plans are among the most valuable assets that offer many benefits including financial security after retirement. Just like other valuable assets, a persons' pension can become the target for scams, illegal activities, and inappropriate or high-risk investments. Particularly, pension scams take diverse forms and appear as a legitimate investment opportunity to many people(Rosoff, Pontell, & Tillman, 2014). According to WPTV News, (2011), white-collar criminals can target anyone, everyone, regardless of their economic status and costs Americas' taxpayers more than $2.6 billion per year. Of concern is the evolving nature of pension scams especially in the U.S. Initially, many pension scams focused on making premature payments to members of the pension schemes. Recent cases have shifted the focus from early payments to more sophisticated fraudulent and high-risk investments (Consumer Federation, 2013). Current pension scams are categorized as white-collar crimes that are characterized by concealment, deceit, and violation of trust without the use of threat, violence or physical force(Rosoff, Pontell & Tillman, 2014). A recent example of such pension scams is the health care fraud conspiracy in the state of New Jersey.

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For many public employees, the New Jersey States Health Benefit Plan offers one of the best health coverage plans in the U.S. The project has more than 835,000 current, and former employees enrolled in its health insurance programme together with their families (Weaver, 2018). The extensive and sophisticated health benefit programme became a prime target of fraud in the early months of 2015. Following FBI investigations that targeted "prescription benefits fraud" in South Jersey, nine people including a Margate physician, a city firefighter, and three Mainland pharmaceutical reps pleaded guilty to charges of defrauding more than $25 million (Weaver, 2018). In the same investigation, more than $50 million was paid to an anonymous "compounding pharmacy" by an unnamed "Pharmacy Benefits Administrator "for compounded medications destined to people living in New Jersey(Weaver, 2018). According to the investigations, the "massive prescription-fraud scheme" involved systematic recruitment of public employees to obtain unnecessary medical prescriptions and without any treatment.

In many cases, the white-collar criminals recruited teachers, state troopers, municipal police officers, and fire-fighters to obtain expensive compounded medical prescriptions. In return, the out-of-state pharmacy received generous reimbursements from the New Jersey's health insurance plan. The out-of-state pharmacy, as well as pay co-conspirators, provided the doctors and recruiters with generous kickbacks in exchange for the fraudulent prescriptions. In a statement made by one of the investigators, the generous nature of the State's health plan presented numerous opportunities to defraud the health benefit plan (Rosoff, Pontell, & Tillman, 2014). Commonly referred to as the "Cadillac plan," the extensive health insurance coverage and premiums are largely funded by taxpayers in New Jersey(Weaver, 2018). Further, the inclusion of compounded drugs by the white-collar criminals heightened the pension scam since the prices of the drugs are largely inflated and lack technical regulations. It is therefore not surprising that one of the investigators expressed his concerns that the $25 million pension scam was just a tip of the iceberg of what goes on (Weaver, 2018). According to him, the health benefit plan pays out hundreds of millions of dollars in fraudulent claims every year. In the end, the taxpayers pay for services that are otherwise not performed.

Conclusion

After pleading guilty to the charges in Camden federal court, Robert B. Kugler, a U.S District Judge convicted a medical doctor, a teacher, a guidance counselor, two firefighters and several pharmaceutical employees (Weaver, 2018). Michael Sher from Northfield, New Jersey, was also convicted of actively recruiting other people into the pension scam as well as conspiracy charges to defraud the health benefit plan. During the court proceedings, one of the attorneys representing the health benefit plan described the act of public servants such as Michael Sher to defraud the public he swore to protect, as unconscionable. Michael Sher faces a $250,000 fine and a maximum penalty of ten years in prison(Weaver, 2018). Some of the other conspirators who pleaded guilty await sentencing in March 2018. They could also face a sentence not exceeding ten years in prison.

References

Consumer Freedom. (2013, April 5). Wayne Pacelle and The HSUS Scam [Video File]. YouTube. Retrieved from https://www.youtube.com/watch?v=4hN0ai9WzBQRosoff, S., Pontell, H., & Tillman, R. (2018). Profit Without Honor (6th ed., pp. 4-6). Pearson Education, Inc. Retrieved from https://mail.google.com/mail/u/0/#inbox/16210a86f9a43ec2?projector=1&messagePartId=0.2

Weaver, D. (2018). Suspended Doctor Pleads Guilty To Drug Distribution Charges. Office of the Atlantic County Prosecutor. Retrieved 11 March 2018, from https://www.acpo.org/suspended-doctor-pleads-guilty-to-drug-distribution-charges/WPTV News. (2011, November 24). Pension Fraud Grows As Employees Wait For Actions [Video File]. YouTube. Retrieved from https://www.youtube.com/watch?v=4hN0ai9WzBQ