The midwife was identified as Jeanette Breen, who operates the Long Island-based Baldwin Midwifery.
Ms Breen reportedly gave the pellets as an alternative to required vaccinations and then proceeded to falsify the children's immunisation records, according to the New York Department of Health.
The midwife reportedly began giving the pellets during the Covid-19 pandemic, specifically during the 2019-2020 school year. The majority of the affected children live in Long Island, according to the Associated Press.
In 2019, the state ended a religious exemption to vaccine requirements for schoolchildren in response to the pandemic.
The health department said that the false records have since been voided, and that the families will have to ensure their students are up-to-date with their shots before they can return to school.
“Misrepresenting or falsifying vaccine records puts lives in jeopardy and undermines the system that exists to protect public health,” State Health Commissioner James McDonald said in a statement.
Ms Breen was licensed by the state to provide healthcare services. She reportedly offered the families her "Real Immunity Homeoprophylaxis Program," which consisted of a series of oral pellets. The pellets were marketed as alternatives for vaccinations, but have not been recognised or approved by the state or the federal government for that use.
Approximately 1,500 students were given the pellets before Ms Breen reportedly began falsifying records. The records claimed the children had been immunised against measles, mumps, rubella, polio, chickenpox, diphtheria, tetanus, pertussis, hepatitis B and a host of other diseases.
Ms Breen's lawyer told the AP that she has cooperated with investigators, has paid her fine, and will continue to comply with any further health department requirements.
“Suffice it to say, Ms. Breen has provided excellent midwifery services for many years to many families, especially on Long Island. She is now toward the end of her career,” David Eskew, her attorney, told the AP. “From her perspective, this matter is over, done with, and closed and she is now moving on with her life.”
Ms Breen has reportedly paid $150,000 of the $300,000 fine. She will not have to pay the second half of the fine if she complies with state health laws, and agrees to never again administer any immunisations that must be reported to the state.
She has also been permanently banned from using the state's immunisation records.