Borough Residents Charged in  $10M+ Medicaid Fraud Scheme

Borough Residents Charged in $10M+ Medicaid Fraud Scheme

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Pichkhadze’s First Choice Pharmacy is located at 245 East 124th Street in Manhattan.

By Forum Staff
Three borough residents have been charged with orchestrating and participating in a multi-million dollar Medicaid fraud scheme involving kickbacks and HIV drugs, State Attorney General Tish James announced Friday.
Pharmacy owner Irina Pichkhadze, 34, and three of her pharmacy managers: Raymond Dieffenbacher, 46; Tarlan Pinkhasov, 40; and Yana Dubrinskaya, 31, the only one of the four suspects who lives outside of Queens; Pichkhadze’s First Choice Pharmacy; and two additional companies, Express Audit Prevention Corp. and OTC Distributors, Inc., were charged with crimes related to defrauding Medicaid out of more than $10 million in a kickback and drug diversion scheme through First Choice Pharmacy in Harlem.
According to prosecutors from the attorney general’s Medicaid Fraud Control Unit, the defendants, acting in concert with each other, allegedly paid or directed employees to pay cash kickbacks to Medicaid recipients in return for each patient’s agreement to fill their HIV prescriptions at First Choice. The pharmacy in turn billed and eventually received hundreds of thousands of dollars from Medicaid for refills that it either did not dispense to patients, a scheme known as “auto-refilling,” or were predicated on the payment of an unlawful kickback.
According to James, State law strictly prohibits all medical providers, including pharmacies, from paying or offering to pay cash kickbacks to anyone in return for the referral of medical services ultimately paid for by Medicaid.
Prosecutors also alleged on Friday that their investigation found that between Jan. 1, 2013 and Dec. 31, 2016, First Choice Pharmacy did not purchase sufficient quantities of medication from state drug wholesalers to justify the quantities of medication it claimed, through its billing records, to have dispensed to patients. Relying on thousands of false claims for payment filed by the pharmacy, Medicaid and Medicaid-funded managed care organizations in turn paid First Choice and the individual defendants more than $10.2 million dollars to which, prosecutors allege, they were not entitled.
Large sums of that money, prosecutors allege, were then funneled through bank accounts bearing the names of Express Audit, OTC, Minnesota Independant [sic] Drugs, and Azure Drugs, among others, and disguised as payments to pharmaceutical wholesalers. The latter two accounts were opened as assumed names for First Choice Pharmacy and in effect, prosecutors allege, the defendants funneled money back to themselves under the guise of inventory purchases.
During its investigation, MFCU executed a search warrant at First Choice and recovered hundreds of bottles of allegedly adulterated, diverted HIV medication. State law requires pharmacies to only secure medication from licensed pharmaceutical wholesalers.
In conjunction with the criminal case, James on Friday also filed a civil asset forfeiture and New York State False Claims Act action against criminal defendants Pichkhadze, Dieffenbacher, Dubrinskaya, Pinkhasov, First Choice Pharmacy, Express Audit, and OTC, as well as against three non-criminal defendants Eduard Yagudayev, Janice Dieffenbacher, and Marina Pichkhadze. The asset forfeiture action and civil recovery action seeks to recover more than $22 million dollars in damages from the defendants for defrauding the State Medicaid program.
“It is disturbing and deeply damaging to our society when health care professionals exploit our most vulnerable patients to steal millions of dollars reserved to provide New Yorkers with essential health care,” James said.


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