Two Pharmacy Owners Plead Guilty in $18M Foreign Medicare Fraud Scheme
17 Nov 2022
Patent Infringement
Two New York pharmacy owners who “exploited the Covid-19 emergency for their own financial gain,” pleaded guilty to an international scheme to submit fraudulent claims to Medicare for cancer medication, the Department of Justice announced Wednesday.
Arkadiy Khaimov, 39, of Forest Hills, and Peter Khaim, 42, also of Forest Hills, engaged in an elaborate healthcare scheme involving more than a dozen pharmacies in New York, according to the justice department. The two would submit millions of dollars in fraudulent Medicare claims for expensive cancer drugs that were not prescribed or distributed to patients. The drugs, Targretin gel, made by Bausch and Panretin gel, made by Concordia, were allegedly dispensed during periods when certain pharmacies were closed due to the pandemic.
“Khaim, Khaimov, and their co-conspirators exploited the Covid-19 emergency for their own financial gain by using COVID-19-related ‘emergency override’ billing codes to submit additional fraudulent claims for Targretin Gel 1%,” the justice department said in a news release.
The scheme started in New York but became a complex international endeavor as the two men attempted to launder money, amounting to more than $18 million. Khaim and Khaimov established shell companies and sham pharmacy wholesale companies to create the illusion they were operating actual businesses.
In reality, they were sending funds from the false Medicare claims to the sham companies. Then, the funds were sent to companies in China and distributed to individuals in Uzbekistan. At that point, the two men received some of the funds in cash, the announcement said.
They also allegedly sent money from the fraudulent claims to their relatives through cashier’s checks and used the money themselves to purchase property. Both men face a 20-year prison sentence and their separate hearings are scheduled for May 2023.
A spokeperson for the Center for Medicare and Medicaid Services did not immediately respond to a request for comment.
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