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Feds investigate NY pharmacy, charge owners with healthcare fraud

The United States Department of Justice (DOJ) recently announced criminal charges against two pharmacy owners from New York. According to the feds, the two were part of a $30 million healthcare fraud scheme that included improper use of a new emergency code, implemented by the government to help with the COVID-19 pandemic. The use of the code, according to the prosecution, resulted in the submission of fraudulent claims.

The government has filed the following charges against the two owners:

  • Conspiracy to commit health care fraud. The prosecution has filed this charge in connection to the allegedly false claims filed by the pharmacists for payment from Medicare.
  • Wire fraud. The prosecution states that wire fraud was present in the pharmacists’ attempts to hide the payments from Medicare, discussed in more detail below.
  • Conspiracy to commit money laundering. The government claims the pharmacists created sham pharmacy wholesale companies for the purpose of hiding these funds. The pharmacists, they claim, would transfer the payments from Medicare to these companies in an attempt to distance the funds from connection to the Medicare payment. The government further states this was a global scheme, using companies located in China and making payments in Uzbekistan. The pharmacists would then have the individuals involved in the global scheme send the funds back to the pharmacists at a later date.

If convicted, the accused face restitution payments for the fraudulent funds, fines, and potential imprisonment.

This case is an example of the government’s focused crackdown on any practices that may be viewed as an attempt to exploit flexibilities worked into the Medicare system in response to the pandemic. Other pharmacies throughout the state are wise to make note of this growing focus and take the time to make sure their own practices follow the law.