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2 rail conductors among 3 charged with prescription scheme

July 30, 2021 GMT

NEWARK, N.J. (AP) — Two New Jersey Transit conductors, including one who sits on the board of directors, took part in a fraud scheme involving expensive prescription drugs, according to charges announced Thursday by the Essex County prosecutor’s office.

Prosecutor Theodore Stephens announced that David Rasmussen and his wife, Suzanne Rasmussen, and Raymond Giovannone were arrested Wednesday and charged with theft and insurance fraud conspiracy.

David Rasmussen and Giovannone are conductors, and Rasmussen is a union delegate who was appointed to the board by Democratic Gov. Phil Murphy last year. All three live in Woodbridge.

NJ Transit provides more than 270 million passenger trips annually on its bus, rail and light rail lines. Rasmussen’s appointment to the board came as Murphy sought to implement reforms at the state-run operator after years of mismanagement and under-investment. Through a spokesperson, Murphy said in an email Thursday he was “extremely disturbed by the charges against David Rasmussen, which represent a serious breach of the public trust,” and said he expected Rasmussen to resign immediately.

The charges are connected to a larger investigation by the U.S. attorney’s office that has led to numerous guilty pleas in federal court over the last several years, the prosecutors office said.

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According to federal authorities involved in the larger probe, the scheme exploited the fact that some New Jersey state and local government employees had insurance that covered expensive compound medications such as pain, scar, antifungal and libido creams. Reimbursements ran as high as thousands of dollars for a one-month supply.

Conspirators recruited government employees like teachers, police and firefighters to submit claims for prescriptions, based solely on the amount of money the insurance company would pay for them.

According to prosecutors in the current case, Suzanne Rasmussen recruited NJ Transit employees to get doctors to prescribe unnecessary prescriptions for the expensive medications. The scheme allegedly caused New Jersey State Blue Cross/Blue Shield to pay out nearly $900,000.

An NJ Transit spokesperson said David Rasmussen and Giovannone have been suspended without pay, and deferred additional comment to the prosecutor’s office. A phone message was left at SMART-TD Local 60, the conductors’ union that represents both men and where Rasmussen has served as a delegate and legislative representative.

The prosecutor’s office didn’t immediately have information on attorneys for the Rasmussens and Giovannone. A phone message was left at a number listed for the Rasmussens; two numbers listed for Giovannone weren’t accepting messages.