Two pharmacy healthcare fraud kickback schemes lead to arrests

Two New York women were arrested today on criminal charges related to their alleged participation in programs designed to pay illegal kickbacks and bribes to Medicare beneficiaries and Medicaid recipients for medically unnecessary prescriptions issued by various New York pharmacies, resulting in total losses of more than $10.5 million resulted in Medicare and Medicaid.

“As alleged, the defendants have repeatedly paid illegal bribes and kickbacks to fill medically unnecessary prescriptions at pharmacies in Brooklyn and Queens, which has cost Medicare and Medicaid millions of dollars,” said Assistant Attorney General Kenneth A. Polite, Jr. from the Judicial Criminal Division of the Department. “Together with our partners, the Department is committed to addressing these illicit relationships that defraud federal health programs designed to help some of our most vulnerable citizens.”

According to court documents and proceedings, Hua Huang, 47, of Fresh Meadows, and Huiling Wu, 40, of Brooklyn, were separately charged by a complaint over their role in plots to defraud Medicare and Medicaid by filing claims that prescription drugs were caused by illegal ones Healthcare kickbacks and bribes at three pharmacies in Brooklyn and Queens.

“Paying Medicare kickbacks serves only to enrich the complicit parties while jeopardizing the integrity of the program and taxpayers at the expense of taxpayers,” said Special Agent in Charge Susan A. Frisco of the US Department of Health and Human Services inspector general (HHS- OIG). “Our agency and law enforcement partners remain strong in our determination to investigate and prosecute individuals allegedly violating laws protecting federal public health programs.”

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Huang was an employee of NY Elm Pharmacy Inc. (NY Elm), based in Flushing. She allegedly referred one person to a podiatrist, who signed prescriptions — including for durable medical devices and diclofenac epolamine — which NY Elm and other co-owned companies then billed for Medicare and Medicaid. Huang provided the person with supermarket gift certificates for each prescription brought to the pharmacy, and also provided the person with cash in exchange for the person’s monthly insurance premium for over-the-counter products. Federal police officers conducted a search of NY Elm concurrent with Huang’s arrest.

Wu was an owner and employee of 888 Pharmacy Inc. (888 Pharmacy), based in Brooklyn. She allegedly referred a person to certain podiatrists who would sign prescriptions, which 888 Pharmacy then billed for Medicare and Medicaid. Wu gave the person a credit for every prescription brought to the 888 pharmacy. She also provided the person with supermarket gift certificates in exchange for the person’s monthly insurance premium for over-the-counter products. Federal police officers conducted a search of Pharmacy 888 at the same time as Wu’s arrest. Two other pharmacies were searched, one in Brooklyn and one in Hawaii.

“The defendants allegedly engaged in schemes designed to defraud Medicare and Medicaid through a coordinated system of kickbacks and bribes for unnecessary prescriptions,” said Acting Assistant Director Michael J. Driscoll of the FBI’s York Field Office. “The FBI, along with our law enforcement partners, remains resolute in our efforts to protect federally sponsored healthcare programs designed to help needy members of our community. Individuals willing to defraud these programs will be held accountable for their actions in the criminal justice system.”

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If convicted, Huang and Wu each face a maximum sentence of 10 years in prison. A federal district court judge will determine the sentence after considering US sentencing guidelines and other legal factors.

HHS-OIG and the FBI’s New York regional offices are investigating the case.

Trial Attorney Patrick J. Campbell and Deputy Chief Miriam Glaser Dauermann of the CID’s Health Care Fraud Strike Force are prosecuting the case.

The Fraud Division directs the Crime Division’s efforts to combat healthcare fraud through the Health Care Fraud Strike Force Program. As of March 2007, this program, which consists of 15 strike forces operating in 24 federal counties, has indicted more than 4,200 defendants, totaling more than $19 billion in bills to the Medicare program. In addition, the Centers for Medicare & Medicaid Services, in cooperation with the Office of the Inspector General for the Department of Health and Human Services, are taking steps to hold providers accountable for their involvement in healthcare fraud programs. For more information, see https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

A criminal complaint is merely an allegation. All accused are presumed innocent until proven guilty in a court of law.

© 2022 The US Department of JusticeNational Law Review, Volume XII, Number 342

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