Somerset County Man Convicted in Multi-Million Dollar Fraud Against NJ Traumatic Brain Injury Fund

C.R. Kraus found guilty of healthcare fraud and tax evasion, faces significant prison time and fines.

C.R. Kraus, a 58-year-old from Manville, New Jersey, has been convicted on multiple charges including conspiracy to commit healthcare fraud and tax evasion, as announced by U.S. Attorney Philip R. Sellinger. The verdict came after a trial before U.S. District Judge Zahid N. Quraishi in Trenton federal court, where Kraus faced a total of ten charges.

Kraus’s co-conspirators, Harry Pizutelli and Maritza Flores, had previously admitted to similar charges in January 2023. The trio was involved in a scheme that defrauded the New Jersey Traumatic Brain Injury Fund (TBI Fund) of millions of dollars, a fund intended to assist residents with traumatic brain injuries when other financial resources are insufficient.

From 2009 through June 2019, Pizutelli, who managed the TBI Fund, collaborated with Kraus and Flores to siphon over $4 million through fraudulent vendor payments for non-existent services. This scheme was motivated partly by Pizutelli's personal relationships with Flores and Kraus, with fraudulent payments processed to appear as legitimate service provisions.

In addition to healthcare fraud, Kraus and Flores were involved in tax evasion, failing to report their illicit income, thereby underreporting their tax obligations. Kraus alone received over $3.245 million from this fraudulent activity.

"This defendant was convicted of multiple crimes for his role in a conspiracy that resulted in the theft of millions of dollars earmarked for victims of traumatic brain injuries. Stealing resources intended to help New Jersey residents who are already coping with serious challenges is especially egregious," said U.S. Attorney Philip R. Sellinger.

Each charge of healthcare fraud and tax evasion carries a maximum penalty of 10 years in prison and a $250,000 fine. Kraus’s sentencing is scheduled for October 8, 2024.

“People battling to regain their lives after surviving a traumatic brain injury, and then digging out from the astronomical costs of healthcare related to the injury are the victims in this case,” FBI – Newark Special Agent in Charge James E. Dennehy said. “Those people should have been the recipients of money from a fund created specifically to help them, not Kraus and his co-conspirators."

The successful conviction resulted from collaborative efforts among the FBI, IRS - Criminal Investigation, and various New Jersey state departments, highlighting the severe legal consequences of defrauding public health funds and evading tax responsibilities.