Former Colombo Consiglieri, Associate Among Five Nabbed In South Florida in $93 Million Healthcare Fraud Case

Federal authorities busted five people in New Jersey and Florida for being part of a national conspiracy to scam Federal healthcare programs out of $93 million. (Some would say this case could potentially make a Brooklyn Federal Judge look somewhat foolish, as is explained below.)

Thomas Farese
Thomas Farese, aka Tom Mix, alleged Colombo consiglieri.

The US Attorney's office also announced that two people connected to the scheme (which involved orthotic braces) in New Jersey already pleaded guilty.

The charges the five men are currently facing—health care fraud and conspiracy to commit health care fraud—are punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine, among other things.

Neither the US Attorney nor the Justice Department included reference to the Colombo crime family, even though two of the five men are known to have longtime ties to the New York crime family.

Thomas Farese (aka Tom Mix), 78—the alleged former consiglieri and street boss for the Colombo crime family—who was living in Delray Beach, Florida, was reportedly at the top of the scheme, which involved “durable medical equipment and genetic cancer screening,” as the Justice Department noted (leaving out mention of the Colombo family, as well as Farese's rank and mob nickname).

Joining Farese is old pal/Colombo family associate Pat Truglia, 53, of Parkland. 

Pat Truglia
Pat Truglia

The others named in the case are Domenic J. Gatto, 46, of Palm Beach Gardens, Nicholas Defonte, 72, and Christopher Cirri, 63, both of Toms River, N.J.

Orthopedic braces are medical devices designed to help properly align, position, support, stabilize, and protect certain parts of the body (particularly the muscles, joints, and bones) while a person heals from an injury.

According to prosecutors, some defendants had hidden financial interests in companies that made the devices, while others owned and operated call centers that processed orders. The call centers allegedly bribed telemedicine companies, which in turn bribed doctors to prescribe the devices for patients who didn’t need them. The companies owned by the defendants that made the devices provided them to the patients and fraudulently billed Medicare and other federal health care programs, according to a criminal complaint, NBC News reported.

The two New Jersey residents who pleaded guilty via videoconference: 46-year-old Brian Herbstman, of Jackson, who pleaded guilty to health care fraud conspiracy and violating anti-kickback statutes, and 48-year-old Sean Hogan of Old Bridge, who pleaded guilty to money laundering conspiracy. Both are scheduled for sentencing on Aug. 31.

The complaint alleges that between October 2017 and April 2019, Farese, Truglia, Cirri, DeFonte, and Gatto participated in a nationwide conspiracy to defraud Medicare, TRICARE, the Department of Veterans Affairs, and other Federal and private health care benefits programs.

For Farese and Truglia, this certainly isn't their first brush with the law. Around a decade back, the Feds charged both with loan sharking, money laundering, and other mob mainstay crimes in a Brooklyn court.

With that case, Farese was arrested in South Florida at around 6:00 a.m. on Jan. 5, 2012, by FBI agents. Truglia was also ensnared in the case. 

Shortly after the arrests, Farese was identified as the street boss for the Colombo family. His predecessor, Andrew (Mush) Russo, allegedly named Farese his replacement in 2011 when Mush was arrested, according to a complaint filed in Brooklyn Federal Court.

The presumed ace in the hole for the Feds was a Colombo capo who flipped and agreed to help in an undercover capacity. Reynold Maragni become a Federal informant in late 2011 and wore a wire that recorded substantial evidence that bolstered allegations that Farese was deeply involved in illicit money laundering activities.

Farese was acquitted, however, and Truglia was convicted in December of 2012. In the end, Truglia didn't spend a day in jail on this conviction. The judge in the case—Judge Frederic Block, now US District Court Judge for the Eastern District of New York—was in his corner, as per Gang Land News reporting

Brooklyn Federal prosecutors argued that Truglia was a full participant in a money laundering plot with Farese when he mailed two checks totaling $47,000 to Maragni in December of 2011 after the mobster had given Truglia $47,000 in "loansharking proceeds." They also noted that in 1995 Truglia was convicted of money laundering and grand theft in a state racketeering case, and was later busted for violating parole. 

Truglia should get a sentence within the recommended guidelines of 21-to-27 months, they argued.

Reynold Maragni
Reynold Maragni, Colombo capo who flipped and wore wire.

But Judge Block stopped them in their tracks after deciding that Truglia was a "patsy." Truglia had lived a largely law abiding life, the judge noted, and his problems with the law were all the fault of his brother Anthony. 

Block gave Truglia three years of probation. The judge also tossed in a $5000 fine, and ordered Patsy to avoid a huge list of organized crime members and associates.

As for what helped Farese beat the case, sources have  highlighted that Maragni never testified about the recordings he made. The Feds decided not to let him testify because his two previous appearances on the witness stand ended in disastrous verdicts for the Feds. Thomas (Tommy Shots) Gioeli and Francis (BF) Guerra were both acquitted of murder charges.

Reportedly, prosecutors decided to cut their losses with Maragni and put him in mothballs. (Maragni also had been caught doing some funny stuff during his undercover stint, including selectively recording his pals by turning the tape recorder on and off, passing notes to the wiseguys he was supposed to record, etc.)

The tapes Maragni made were still played during the Farese/Truglia trial.  But he never took the stand.

Tom Mix History
In 1978, Farese was indicted in Fort Lauderdale for masterminding a marijuana smuggling and distribution operation under the cover of his Olympic Shipping Lines operation. The case included allegations of bribery (based on conversations recorded by police who bugged Farese’s office) against two former state representatives. In 1980, Farese was convicted and sentenced to 30 years in prison, but was released in 1994.

Mere months later DEA agents posed as drug dealers seeking to launder more than $1 million. They sought help from Farese, who at the time had hidden interests in three strip clubs – Hialeah’s Club Pink Pussycat, Goldfinger in Sunrise, and Club Diamonds in West Palm Beach. Agents reported that Farese washed more than $1.1 million in drug money for them before his racketeering indictment in January 1996. Farese later pleaded guilty and got 10 years, plus six years special parole. He was released from prison in 2005.

In the current healthcare fraud case, as per the Justice Department: Christopher Cirri, 63, and Nicholas DeFonte, 72, both of Toms River, New Jersey, the owners and operators of a fraudulent marketing company were charged with one count of conspiracy to commit health care fraud in connection with paying and receiving health care kickbacks and bribes for orthotic brace orders. Cirri and DeFonte were arrested and appeared before U.S. Magistrate Judge Jessica S. Allen of the District of New Jersey

Domenic Gatto, 46, of Palm Beach Gardens, Florida, an owner and operator of an orthotic brace supplier, was charged with one count of conspiracy to commit health care, in connection with soliciting and receiving health care kickbacks.  Gatto surrendered and appeared before U.S. Magistrate Judge Jessica S. Allen of the District of New Jersey

The complaint alleges that Truglia, Cirri, and DeFonte operated or controlled marketing call centers to solicit beneficiaries of federal and private health care benefit programs and to entice them to accept orthotic braces regardless of need.  Truglia, Cirri, and DeFonte paid telemedicine companies illegal kickbacks and bribes in exchange for doctors and other medical professions signing brace orders and falsely swearing to their medical necessity. Truglia, Cirri, and DeFonte concealed the kickbacks and bribes by entering into sham contracts with the fraudulent telemedicine companies and issuing invoices describing the payments as “marketing” or “business process outsourcing” expenses.

Farese and Truglia purchased these brace orders through orthotic brace suppliers in Georgia and Florida through which they billed the federal and private health care benefit programs for the orders. To conceal their ownership interests in the brace suppliers, Farese and Truglia used nominee owners and provided those names to Medicare in lieu of their own.

The complaint further alleges that Gatto connected Cirri and DeFonte to other co-conspirators and arranged for Cirri and DeFonte to sell orthotic brace orders to orthotic brace suppliers in New Jersey and Florida in exchange for illegal health care kickbacks and bribes. Gatto and others paid Cirri and DeFonte kickbacks and bribes for each federal health care beneficiary for whom orthotic brace orders were sold to orthotic brace suppliers to be billed to Medicare, TRICARE, CHAMPVA, and other federal and private health care benefit programs. To conceal the kickbacks and bribes, Cirri and DeFonte created sham invoices labeling the payments as “marketing” and “business processing outsourcing” expenses. To conceal his ownership interest in the brace supplier, Gatto used a nominee owner on forms submitted to Medicare and used shell corporations to transfer the funds he paid in connection with the purchase of the supplier.

The charges here—health care fraud and conspiracy to commit health care fraud—are punishable by a maximum potential penalty of 10 years in prison and a $250,000 fine, or twice the gross profit or loss caused by the offense, whichever is greater. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division; Acting U.S. Attorney Rachael A. Honig of the District of New Jersey; Special Agent in Charge Scott J. Lampert of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Special Agent in Charge Christopher F. Algieri of Department of Veterans Affairs Office of Inspector General (VA-OIG); Special Agent in Charge Patrick J. Hegarty of the Defense Criminal Investigative Service (DCIS); and Special Agent in Charge George M. Crouch Jr. of the FBI’s Newark Field Office made the announcement.