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NY Pharmacy Owners Plead Guilty to Money Laundering During COVID-19

The U.S. Department of Justice (DOJ) announced on November 16 that two pharmacy owners from Forest Hills, New York have pleaded guilty to conspiracy to commit money laundering through submission of fraudulent claims to Medicare during the COVID-19 pandemic. The co-conspirators owned over a dozen pharmacies in the New York area, through which they submitted fraudulent claims for expensive cancer medications (Targretin Gel 1% and Panretin Gel 0.1%) that were never prescribed by a physician or dispensed to patients. DOJ found that the co-conspirators were exploiting “emergency override” billing codes that were established in response to the COVID-19 emergency.

Through this fraudulent scheme, the co-conspirators collected over $18 million from Medicare reimbursements, which they attempted to conceal through several shell companies, including sham companies that were designed to look like legitimate pharmacy wholesalers. The money was sent from the company bank accounts directly to the co-conspirators or their relatives or designees, or it was sent to companies in China and then distributed to individuals in Uzbekistan and collected by the co-conspirators in cash.

The co-conspirators are scheduled for sentencing in May 2023 and face a maximum penalty of 20 years in prison.

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