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DOJ Drops Bombshell in Menendez Corruption Trial: Dozen More Unreimbursed Flights Paid for by Co-Defendant Melgen

On Wednesday the Department of Justice dropped a bombshell in the public corruption trial against Senator Bob Menendez (D-NJ) and co-defendant Dr. Salomon Melgen, set to begin in a New Jersey federal courtroom on September 6.

It had been reported for some time that Menendez had previously acknowledged taking three trips to the Dominican Republic and Florida that were paid for by Melgen. When two of those trips were discovered, Menendez belatedly reimbursed Melgen the $58,500 expense associated with them.

But in a 30-page brief filed with the court on Wednesday, the DOJ stated, “The press revealed for the first time that Menendez had flown free of charge multiple times in 2010 on Melgen’s private jet—a fact that Menendez had omitted from the annual financial disclosure form he is required to file. Once exposed, on January 4, 2013, Menendez wrote a $58,500 check to Melgen to cover two roundtrip flights, more than two years after Menendez took them in 2010.” According to the DOJ brief:

A few weeks later, when the FBI executed a search warrant at Melgen’s offices on January 30, 2013, Menendez swiftly issued a statement: “Senator Menendez has traveled on Dr. Melgen’s plane on three occasions, all of which have been paid for and reported appropriately.”

That was a lie.

The truth is that Menendez and his personal guests had enjoyed more than a dozen flights on Melgen’s private jet, dating back at least as far as 2006—not a single one of which Menendez had paid for or reported on his annual financial disclosure forms. Menendez persisted in the obfuscation just a few days later, telling CNN on February 4 that the reason he wrote the $58,500 check to Melgen over two years after the flights was that the payment ‘fell through the cracks.’

A month later, Melgen repeated the “three occasions” lie in an interview appearing in an online newspaper owned by Melgen.

What both defendants’ false public statements sought to hide was that the $58,500 check did not cover all of the private flights that Menendez accepted from Melgen—it covered just the two personal trips that the defendants believed the public knew or would find out about. But Menendez’s and Melgen’s lies to the public were aimed at covering up more than just flights.

They were aimed at hiding a corrupt pact spanning seven years, in which Melgen showered many more things of value on the New Jersey Senator than just flights on a private jet, and Menendez reciprocated with official action advancing the South Florida eye doctor’s personal whims and business interests.

Social media reacted quickly to the new revelations included in the DOJ brief:

“[T]he evidence at trial will prove the defendants’ bribery scheme beyond a reasonable doubt,” the brief continued.

The remainder of the memorandum, The DOJ wrote, “is intended to provide a guide for the Court regarding the evidence the Government will offer and to preview several legal issues that may arise.”

Menendez’s co-defendant, Dr. Salomon Melgen, was convicted on 67 felony counts of Medicare fraud in April on charges that are directly related to the sort of illegal lobbying the federal government alleges Menendez undertook on Melgen’s behalf. The DOJ brief noted:

Melgen’s fortune was anchored by his South Florida ophthalmology practice, and a substantial portion of that practice involved treating Medicare-eligible patients for macular degeneration, an eye disease treated with the drug Lucentis. His lucrative practice was threatened in 2009, when a post-payment review of his Lucentis claims by the Centers for Medicare and Medicaid Services (CMS) revealed that he had billed Medicare for millions of dollars’ worth of the drug that he never actually bought, leading to a formal demand that he repay Medicare $8.9 million in overbillings for the years 2007 and 2008. That is when Melgen called upon Menendez, as one staffer memorialized in an email, to ‘weigh in with CMS.’

Lucentis is an injectable preservative-free solution that is stored in single-use vials. The label approved by the Food and Drug Administration (FDA) specifies: “Each vial should only be used for the treatment of a single eye. If the contralateral eye requires treatment, a new vial should be used.”

Each single-dose vial, which costs approximately $2,000, is deliberately packaged with more Lucentis than is actually needed for a single dose in case any is spilled while preparing to administer the drug; this “overfill” ensures that there will be a sufficient amount for the dose. Any overfill that remains after administration should be discarded. The Centers for Disease Control and Prevention (CDC) warns that using a single-dose vial to treat multiple patients risks infection. Medicare reimbursement policy reflects the one-vial, one-eye administration of Lucentis by allowing for full reimbursement of a single vial, despite the overfill lost after the single dose from that vial is administered.

Testimony from CMS officials, Menendez staffers, and others, along with internal records, correspondence, and Melgen’s own admissions, will demonstrate that, from at least 2007 through 2012, Melgen disregarded the FDA label, defied the CDC’s warning, and exploited Medicare’s billing procedures.

Under Melgen’s direction, his ophthalmology practice, Vitreo-Retinal Consultants (VRC), routinely extracted and harvested overfill from single-dose Lucentis vials, used the overfill to treat multiple patients, and billed Medicare for a full vial each time the drug was administered. Because VRC managed to extract multiple doses of Lucentis per vial, but billed Medicare for a full vial for each dose, Melgen was paid millions by Medicare for vials he never
bought.

Last week Melgen’s sentencing on those convictions was surprisingly delayed until after the public corruption trial, giving rise to speculation that Melgen will become a witness against Menendez in return for a lighter sentence on those charges. He currently faces 25-years-to-life.

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