On December 21, 2020, the Department of Justice (DOJ) announced that two owners of over a dozen New York-area pharmacies were charged for their roles in a $30 million health care fraud and money laundering scheme.
The DOJ alleged that the pharmacy owners used emergency override billing codes, which went into effect due to the COVID-19 pandemic, in order to submit fraudulent claims for expensive cancer drugs that were never purchased by the pharmacies, prescribed by physicians, or dispensed to patients. The DOJ alleged that these claims were often placed when the pharmacies were not operational and by identifying doctors on prescriptions without their permission. The DOJ asserted that the pharmacy owners were ultimately paid over $30 million for these claims. The DOJ further alleged that the pharmacy owners acquired control over dozens of New York pharmacies by paying others to pose as owners and hiring pharmacists as purported supervising pharmacists in order to obtain pharmacy licenses and insurance plan credentialing.
The DOJ also alleged that the pharmacy owners engaged in a complex money laundering conspiracy with the proceeds of their frauds. More specifically, the DOJ alleged that the pharmacy owners created sham pharmacy wholesale companies and falsified invoices to make it appear that funds transferred to the sham pharmacy wholesale companies were for legitimate drug purchases.
The pharmacy owners were each charged with one count of conspiracy to commit health care fraud and wire fraud and one count of conspiracy to commit money laundering. Individually, the pharmacy owners were charged with concealment money laundering. One of the pharmacy owners was also charged with aggravated identity theft.
See here for the DOJ press release.
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