Ex-owner of Tony's Baltimore Grill in Atlantic City sentenced to 37 months in health care fraud

Dec. 13—The onetime owner of the iconic Tony's Baltimore Grill in Atlantic City was sentenced this week to 37 months in prison for his role in a massive Shore-based prescription drug scheme that defrauded more than $50 million from the New Jersey state health benefits system.

On July 14, Brian Pugh, 45, of Absecon, pleaded guilty before U.S. District Judge Robert B. Kugler to one count of conspiring to defraud a health care benefits program by submitting fraudulent claims for medically unneccesary prescriptions, according to First Assistant U.S. Attorney Vikas Khanna.

Kugler imposed the sentence on Monday in federal court in Camden.

Authorities said Pugh was part of a vast conspiracy based at the Jersey Shore in which state and local government employees were recruited and paid to receive medically unnecessary compound prescription medications, including libido creams, vitamins, scar ointments and other expensive medications.

Prosecutors said Pugh directly caused the pharmacy benefits administrator to pay more than $1.4 million for medically unnecessary compound prescription medications for individuals he recruited into the scheme, and he received more than $430,000 in the conspiracy.

In addition to the prison term, Kugler sentenced Pugh to three years of supervised release and ordered restitution of more than $1.4 million and forfeiture of $437,604.

Pugh was part of a wide-ranging scheme in which state and local government employees were recruited and compensated to receive medically unnecessary compound prescription medications.

More than three dozen people, including firefighters, police officers, drug sales representatives, teachers and guidance counselors, have been convicted or pleaded guilty to roles in the conspiracy to defraud New Jersey health benefits programs, according to the U.S. Attorney's Office.

The leader of the conspiracy, William Hickman, pleaded guilty in June 2021 to being the organizer of the prescription drug conspiracy, which prosecutors say cost state health-benefit plans more than $53 million, and is awaiting sentencing.

Hickman, 43, of Northfield, agreed to more than $26 million in forfeitures of investment accounts and other property, according to Kugler. He is awaiting sentencing. Hickman is alleged to have used a shell company, Boardwalk Medical LLC, to solicit the services of the late James Kauffman, an endocrinologist, and other doctors for fraudulent prescriptions for expensive creams, vitamins, and libido medication, and scar ointments.

Kauffman hanged himself in prison while awaiting charges that he arranged the 2012 murder of his wife, April Kauffman, a Shore radio personality and veteran's advocate.

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