TRENTON - A new state report finds illicit medical practices are fueling prescription drug and heroin abuse in New Jersey.

The NJ State Commission of Investigation (NJSCI) report says underground drug operations are taking place in parking lots, schools and intersections.

Patrick Hobbs, chairman of the NJSCI, says drug transactions aren't going on in dark alleys anymore. "It's indoors, it has a waiting room, maybe a nurse," Hobbs says. "And the person doing the deal has a white coat, and hides behind the shield of a medical license."

Investigators found Medicaid patients and drug addicts in Newark were regularly taken to a doctor, where they got unnecessary prescriptions for painkillers. They say that doctor, who had ties to Russian organized crime, would hand patients a $10 gift card as a thanks.

The report also found that during a 19-month period, a chiropractic office in Camden prescribed oxycodone with an estimated street value of nearly $10 million.

The commission is proposing stronger oversight of the medical community and tougher penalties for offenders.