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Pharmacy Owners Plead Guilty to COVID Fraud and Money Laundering Scheme

Headlines that Matter for Companies and Executives in Regulated Industries

Pharmacy Owners Plead Guilty to COVID Fraud and Money Laundering Scheme

Two New York men pled guilty for their alleged involvement in a complex money laundering conspiracy to launder proceeds from a fraudulent health care scheme, which involved the submission of false and fraudulent claims to Medicare through New York area pharmacies that the men and their co-conspirators owned and controlled.

The men used the pharmacies to submit millions of dollars in fraudulent claims to Medicare, including by using COVID-19 billing codes to submit claims for expensive cancer treatments that were not actually provided. They then allegedly used shell companies to conceal their criminal proceeds, which totaled over $18 million. According to the government, the men are alleged to have generally sent their proceeds from pharmacy bank accounts they owned to sham pharmacy wholesale companies. The monies were then sent to: (1) companies in China for distribution to persons in Uzbekistan; (2) the defendants’ relatives or designees; or (3) directly to the defendants, who then purchased real estate and luxury items. 

Read DOJ’s press release here.

Pennsylvania Psychiatrist Charged with Fraudulent Medicare Billing Scheme 

A Lehigh Valley psychiatrist, who is the sole owner of Blue Mountain Psychiatry, was charged with four counts of healthcare fraud. According to the US Department of Justice’s (DOJ) press release, the licensed psychiatrist improperly and fraudulently billed Medicare for services that were not provided at all as well as services that were not provided at the level claimed. Specifically, the psychiatrist is alleged to have billed Medicare for: (i) more than 24 hours’ worth of services on a single day; (ii) treating the same patient at the same time at different nursing homes; and (iii) treating the deceased beneficiaries. The government alleges that Blue Mountain received Medicare payments of at least $1.36 million as a result of the fraudulent claims.

Read DOJ’s press release here.

Guilty Plea in Department of Veteran Affairs Scuba Fraud Investigation 

The Director of Training and School Certifying Official at a dive shop in Georgia became the sixth defendant to plead guilty to submitting false claims to the US Department of Veteran Affairs (VA). According to DOJ’s press release, the individual caused more than $700,000 in false claims to be paid out through the submission of false and fraudulent information to the VA. The other defendants who previously pled guilty include owners and employees at the dive shop and another scuba shop. Collectively, the defendants are alleged to be responsible for defrauding more than $6 million from VA education benefits. 

Read DOJ’s press release here.

California Man Found Guilty of Health Care Fraud and Prescription Drug Diversion Scheme 

A California man was convicted by a federal jury of conspiracy to commit health care fraud, health care fraud, and conspiracy to engage in the unlicensed wholesale distribution of prescription drugs. According to DOJ’s press release, in 2016 and 2017 the defendant used beneficiary information received from his co-conspirators to write false and fraudulent prescriptions for expensive prescription medications. These claims were then allegedly submitted to Medicare and Medicaid of California by a co-conspirator’s pharmacies, and the defendant’s co-conspirators then sold the medications on the black market. 

Read DOJ’s press release here.

© 2023 ArentFox Schiff LLPNational Law Review, Volume XII, Number 322
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About this Author

D. Jacques Smith Attorney Litigation ArentFox Schiff Washington DC
Partner and Complex Litigation Practice Co-Leader

Jacques focuses his practice on government investigations and enforcement. Recognized as one of the top False Claims Act practitioners in the country, his clients largely encompass all branches of health care and life sciences. He has more than 30 years of experience handling jury, bench, and administrative trials in a variety of civil and criminal cases in state and federal courts throughout the country. Jacques excels at handling complex commercial disputes and internal investigations and responding to government inquiries. 

Jacques is...

202-857-6154
Randall A. Brater Litigation Attorney ArentFox Schiff Washington DC
Partner

Randy routinely litigates high-stakes matters in state and federal courts, including preliminary injunctions, motions practice, jury and bench trials, arbitrations, and mediation.

Randy often handles matters related to investigations and the False Claims Act, municipal bond finance, and trademark litigation. Randy also has represented agricultural chemical manufacturers in numerous data compensation disputes arising under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), environmental actions under CERCLA, employment, trade secret...

202-715-8472
Mohammed T. Farooqui ArentFoxSchiff
Associate

Mohammed has conducted internal and external investigations to assess compliance with federal and state laws, advised companies on adopting strategies to ensure compliance with anti-bribery and anti-corruption laws and regulations, and defended companies and individuals in actions brought by the DOJ and SEC. 

His experience includes leading a team of ArentFox Schiff attorneys tasked with reviewing the practices and procedures of one of the largest law enforcement agencies in the United States. Mohammed's regulatory enforcement experience...

212-457-5428
Laura Zell Associate ArentFox Schiff LLP
Associate

Laura specializes in intellectual property litigation, with a focus on trademark, trade dress, and copyright infringement, and complex litigation, as well as white collar defense and internal and government investigations. Laura has served as the lead associate at trademark and white collar trials in federal court, providing her with significant experience in all phases of litigation, ranging from discovery, motions practice, and witness preparation to direct and cross-examinations and post-trial motions.  

Intellectual Property...

202-857-6032
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