Vernon Business Owner Admits $1.3 Million Health-Care Fraud

A former owner of a Vernon medical-supply business pleaded guilty in federal court to health-care fraud after admitting that false claims for custom breast prostheses caused nearly $1.3 million in losses to Medicaid and other health insurance plans.

Jacqueline Pelphrey, 50, formerly of Manchester and now of Freedom, Pennsylvania, entered her plea Tuesday, October 6, in Hartford federal court. According to the U.S. Attorney's Office for the District of Connecticut, Pelphrey owned and operated Women's Health Resources Inc., doing business as Essentials for the Special Woman, in Vernon.

The business sold post-mastectomy products, including custom breast prostheses, and submitted claims to health-care benefit programs. Court documents and statements made in court say that, beginning no later than August 2018, Pelphrey submitted claims for prostheses that clients had not ordered, purchased, or received.

As part of her guilty plea, Pelphrey admitted that the conduct caused a total of $1,299,633.10 in losses to Medicaid and other health insurance plans, prosecutors said. The affected programs included Medicaid, private insurers, and benefit programs for which private insurers processed claims.

Pelphrey was released on a $10,000 bond while awaiting sentencing. Her sentencing hearing is scheduled for December 29 in Bridgeport. Health-care fraud carries a maximum possible prison term of 10 years; the sentence will be determined by the court.

The investigation was conducted by the U.S. Department of Health and Human Services Office of Inspector General and the FBI. Assistant U.S. Attorney David J. Sheldon is prosecuting the case.