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Financial Fraud Law

Pharmacy Preyed On HIV Patients While Fraudulently Billing Medicaid for Millions, Prosecutors Assert

 Three men have been arrested on charges that they defrauded government-funded health care programs by buying back prescriptions and billing Medicaid as if the medication had been dispensed. The two owners of 184th Street Pharmacy in the Bronx, along with the supervising pharmacist, targeted financially vulnerable patients, putting their health at risk by paying them to forgo necessary anti-retroviral HIV medications, according to prosecutors.

Owners Ahmed Hamed, of Bayside, Queens, and Tarek Elsayed, of Elmhurst, Queens, and the supervising pharmacist, Mohammed Hassan Ahmed, of Elmhurst, have been charged with felony Grand Larceny and Scheming to Defraud the Government; in addition, Hamed and Elsayed have been charged with felony Money Laundering.

“These defendants abused the fundamental trust between health care providers and patients by putting their own greed above the health needs of the patients,” said New York Attorney General Eric T. Schneiderman. “This blatant theft and abuse of one of our state’s most important health care programs is reprehensible and will not be tolerated.”

According to prosecutors, the defendants, working together, frequently submitted claims for thousands of dollars in reimbursements to Medicaid and Medicaid managed care organizations for medications they did not dispense between March 1, 2013, and the present. In less than a year, government-sponsored health care programs, including Medicaid, Medicare, and a number of Medicaid-funded managed care organizations, paid 184th Street Pharmacy in excess of $9.8 million, the government asserted.

Prosecutors asserted that on at least eight occasions between October 2013 and February 2014, Ahmed, Elsayed, and Hamed paid patients hundreds of dollars in cash in exchange for forgoing their prescriptions, most of which were for HIV medication. The defendants then submitted false claims to Medicaid and to Medicaid-funded health plans certifying that they had in fact dispensed the medication in question, according to prosecutors. Allegedly, on other occasions, Ahmed, Elsayed, and Hamed submitted claims to Medicaid and Medicaid managed care companies costing these insurers thousands of dollars in reimbursements for prescriptions refills that were never dispensed. The defendants also paid Medicaid recipients cash for referring new patients, giving them a bonus for each new patient they brought in, the charges assert. 

Medicare has received numerous complaints regarding its patients being paid to not receive HIV medication and is also believed to be a victim of the defendants’ conduct, according to prosecutors. The state said that its investigation of 184th Street Pharmacy is ongoing.

Ahmed and Elsayed also allegedly funneled the proceeds of their crimes through several companies they owned and controlled, including A and H Vitamin Supply Corp., Kinrey Medicine Supplies Corp., North American Drugs Corp., Health Care Medicine Supply Corp., NYC Medicine Supply Inc., Five Borough Drugs Corp., Tri-Borough Limo Inc., Premier Gate LLC, United Pillars LLC, and two companies alleged to be sound-alikes for well-established wholesalers: Andas Pharmaceutical Supply Corp. and Kinrey Medicine Supplies Corp.

Hamed and Elsayed are charged with three counts of Grand Larceny in the Third Degree, a class D felony, one count of Scheme to Defraud in the First Degree, a class E Felony, and one count of Money Laundering in the Fourth Degree, a class E Felony. Ahmed is charged with three counts of Grand Larceny in the Third Degree, a class D felony, and one count of Scheme to Defraud in the First Degree. If convicted, each defendant faces up to seven years in prison.

In addition to arresting the defendants, the state’s Medicaid Fraud Control Unit, with the assistance of the United States Department of Health and Human Services, Office of the Inspector General, the New York State Office of the Medicaid Inspector General, the United States Food and Drug Administration, and the New York City Police Department, executed a search warrant at 184th Street Pharmacy, located at 69 East 184th Street in the Bronx.

The state also obtained a court order freezing the bank accounts held by the criminal defendants for more than $9.8 million. The order freezes the bank accounts of the above-listed corporations up to the amount of the proceeds they received from their alleged wrongful conduct. The state further obtained a temporary restraining order prohibiting the defendants and the 10 companies from transferring assets. The state also seized property belonging to the criminal defendants, including a Maserati, two BMWs, and a Mercedes-Benz.  

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