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Peter Khaim, 40, and Arkadiy Khaimov, 37, both of Forest Hills, got others to pose as pharmacy owners or supervisors to take advantage of emergency override codes added to the Medicare system during the national state of emergency, an indictment returned by a grand jury in Brooklyn alleges.
They used these to submit fraudulent claims for the expensive cancer medication Targretin Gel 1%, none of which was ever provided, ordered, or even authorized by medical professionals, it says.
Targretin Gel 1% has an average wholesale price of roughly $34,000 for each 60-gram tube, federal authorities noted.
The drugs were often ordered during periods when pharmacies weren’t operating, using doctors’ names on prescriptions without their permission, they said Monday.
Khaim and Khaimov paid others to pose as the owners of the pharmacies and hired pharmacists to pretend to be supervisors “for the purpose of obtaining pharmacy licenses and insurance plan credentialing,” Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division said.
To launder the money, the pair “created sham pharmacy wholesale companies, which they named after pre-existing pharmacy wholesalers,” Rabbitt said.
They also “fabricated invoices to make it appear that funds transferred from the pharmacies to the sham pharmacy wholesale companies were for legitimate pharmaceutical drug purchases,” he added.
The pair conspired with an international money launderer who arranged for funds to be wired from the sham pharmacy wholesale companies to companies in China for distribution to individuals in Uzbekistan, federal authorities said.
Members of the Uzbekistani immigrant community funneled back through an unlicensed money transfer business, minus a commission that was deducted by the money launderer, they said.
When the amount of fraudulent proceeds exceeded the amount of cash available in the Uzbekistani immigrant community, Rabbitt said, Khaim and Khaimov “directed the international money launderer to transfer funds back from the sham wholesale companies to the defendants, their relatives, or their designees, in the form of certified cashier’s checks and bags of cash that were dropped at their house in the middle of the night.
“The defendants used the proceeds of the scheme to purchase real estate and other luxury items,” he said.
Khaim and Khaimov are each charged with conspiracy to commit health care fraud and wire fraud and conspiracy to commit money laundering.
Khaim also was separately charged with concealing money laundering and aggravated identity theft.
Khaimov also was separately charged with concealing money laundering.
Both men “lined their own pockets by exploiting Medicare flexibilities that were designed to ensure that patients obtained access to needed medications during the COVID-19 crisis,” Rabbitt said.
“The changes to this program, funded by taxpayers, were put in place to help fellow citizens obtain needed medications during the pandemic, not line the pockets of fraudsters,” said Acting Director in Charge William F. Sweeney Jr. of the FBI’s New York Field Office.
“Those who attempt to illegally profit from our public funded healthcare programs should remember taxpayers also fund courts and jails,” Sweeney said.
The U.S. Department of Health and Human Services Office of Inspector General’s New York Field Office investigated the case along with the IRS-Criminal Investigation’s New York Field Office and the Federal Deposit Insurance Corporation’s Office of Inspector General.
Assistant Chief Jacob Foster of the Criminal Division’s Fraud Section’s National Rapid Response Strike Force and Trial Attorney Andrew Estes and Assistant Chief Brendan Stewart of the Fraud Section’s Brooklyn Strike Force are prosecuting the case.
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