‘I do this with SO MANY PPL’: Red Bank man admits role in drug rehab bribery scheme

A Red Bank man admitted Wednesday to participating in a multi-state scheme to bribe drug-addicted people to enter rehabilitation centers in order to collect referral fees for a marketing company, authorities said.

Peter J. Costas, 26, of Red Bank pleaded guilty to one count of conspiracy to commit health care fraud, appearing by teleconference before U.S. District Judge Peter G. Sheridan, according to a news release from U.S. Attorney Craig Carpenito's office.

Federal authorities allege Costas and his unnamed conspirators defrauded health insurance companies by running a scheme to convince people with drug addictions to repeatedly enter rehabilitation centers even when it wasn't medically necessary, according to the news release.

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Costas worked with several marketing companies, but the support of one California-based company that had contracts with several drug rehabilitation centers around the country, was crucial, authorities said.

The company recruited Costas to pay bribes — often amounting to several thousands of dollars — to dozens of people addicted to heroin and other drugs who had "robust" private health insurance to convince them to enter drug treatment facilities. Once they agreed to accept the money, Costas and the owners of the marketing company would arrange and pay for the patients to travel to centers in California and other states, according to the news release.

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Costas kept in touch with New Jersey patients, specifically instructing them to stay at the facilities long enough to generate referral payments.

"Costas and the marketing company often directed patients to different rehabilitation facilities month after month to generate multiple referral payments without regard to whether the substance abuse treatment was medically necessary or effective," the U.S. Attorney's Office alleged.

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One patient told Costas he'd continue to enroll in new facilities with the purpose of generating new referral fees and receiving more bribes. When the patient later expressed skepticism that Costas would hold up his end of the deal, Costas responded in a Facebook message "Don’t worry. . . . I do this with SO MANY PPL," according to a court document.

Many of the facilities provided ineffective treatment and fostered drug use on their property, according to the news release.

The facilities typically paid the marketing company between $5,000 and $10,000 for each patient referral, and Costas and other brokers received approximately half that amount for each patient they brokered, authorities said.

Prosecutors said the conspiracy cost health insurers millions of dollars.

Costas faces a maximum 10-year prison sentence and a $250,000 fine, or twice the gross gain or loss from the offense, at his sentencing, which is scheduled for Sept. 29.

Assistant U.S. Attorney Jason S. Gould of the Health Care Fraud Unit in Newark represented the government in the case.

"Mr. Costas has accepted full responsibility for the conduct at issue in this case. We look forward to presenting all of his background information at the time of sentencing," Costas' Philadelphia-baattorney Ashley Shaprio wrote in an email.

Andrew Goudsward: agoudsward@gannett.com; @agoudsward on Twitter.