Somerset County man guilty of stealing millions from fund for brain injury victims
MANVILLE - A borough man has been convicted in federal court of stealing millions of dollars from a state government fund that was earmarked for victims of traumatic brain injury.
C.R. Kraus, 58, of Manville, was convicted of all 10 counts of an indictment following a trial before U.S. District Judge Zahid N. Quraishi in Trenton federal court. Kraus was found guilty of conspiracy to commit healthcare fraud, five acts of healthcare fraud, and four counts of tax evasion, U.S. Attorney Philip R. Sellinger announced.
In January 2023, Kraus’s conspirators, Harry Pizutelli and Maritza Flores, pleaded guilty to conspiracy to commit healthcare fraud and tax evasion relating to defrauding the New Jersey Traumatic Brain Injury Fund (TBI Fund) of millions of dollars for their own personal benefit.
“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,” Sellinger said. “Stealing resources intended to help New Jersey residents who are already coping with serious challenges is especially egregious. 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.”
The TBI Fund, run by the New Jersey Division of Disability Services, provides New Jersey residents who have suffered a traumatic brain injury with services and support when funding from insurance, personal resources, or other programs is unavailable to meet their needs.
After a prospective patient applies for services, TBI Fund personnel review the application and, if approved, the patient is authorized to secure designated services from a third-party vendor.
Once a patient receives services approved by the TBI Fund, the vendor or service provider submits an invoice to the TBI Fund for payment.
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When an invoice is received, TBI Fund personnel review the invoice to ensure that the patient had been approved to receive the services.
If the invoice is approved, an internal payment voucher is generated, authorized by TBI Fund personnel, and then submitted to the New Jersey Department of the Treasury for payment, which issues a check directly to the vendor.
Pizutelli, manager of the TBI Fund and responsible for its day-to-day operation, supervised, managed, and oversaw the process by which third-party vendors were paid for services.
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, Sellinger said.
Pizutelli orchestrated the distribution of fraudulent vendor payments to Flores and Kraus by generating and processing false invoices and internal payment vouchers, Sellinger said.
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. Pizutelli then approved and transmitted the internal payment vouchers so that his conspirators received vendor payments, according to court documents.
Authorities said Pizutelli orchestrated these fraudulent payments to maintain and advance romantic and/or sexual relationships with Flores, including more than $940,000 in fraudulent distributions to Flores and more than $3.245 million in fraudulent distributions to Kraus.
To obscure their fraudulent conduct, Flores and Kraus also evaded the payment of income taxes by making material misstatements and omissions on their federal income tax returns and significantly underreporting the income they had derived from the fraudulent scheme, Sellinger said.
The healthcare fraud conspiracy charge and substantive healthcare fraud charges to which Kraus was convicted each carry a maximum penalty of 10 years in prison and a maximum fine of $250,000.
The tax evasion charges to which Kraus was convicted each carry a maximum penalty of 10 years in prison and a maximum fine of $250,000. Sentencing is scheduled for Oct. 8.
Email: mdeak@mycentraljersey.com
Mike Deak is a reporter for mycentraljersey.com. To get unlimited access to his articles on Somerset and Hunterdon counties, please subscribe or activate your digital account today.
This article originally appeared on MyCentralJersey.com: Manville man stole millions from fund for brain injury victims
