Thirteen Indicted in Pill Mill and Health Care Fraud Scheme

Thirteen individuals were indicted for their involvement in a large-scale pill mill operation and conspiracy to defraud Medicare and Medicaid of millions of dollars, according to a DEA press release. The charges are a result of a long-term wiretap investigation.

Two indictments, filed by the Office of the Special Narcotics Prosecutor, span 3 medical clinics in Brooklyn, New York. On April 7, 12 defendants were arrested in Brooklyn, Queens, Staten Island, Manhattan, and New Jersey in connection with the scheme to commit money laundering, fraud, and illegally sell prescription narcotics.

Physicians Lazar Feygin and Paul Mcclung and office managers Konstantin Zeva, Rachel Smolitsky, Vyacheslav Maksakov, and Pavel Krasnou are charged with running the 3 medical clinics that allegedly engaged in criminal activity.

Allegedly, the medical clinics named in the indictment defrauded Medicaid and Medicare by billing millions of dollars in unnecessary medical tests. Physicians and other medical practitioners allegedly prescribed oxycodone to patients with no legitimate medical purpose, and required patients to submit to the unnecessary medical tests in exchange for the prescriptions.

Several defendants also reportedly engaged in laundering money to conceal illegal proceeds.

DEA officials identified the clinics, named Parkville Medical Health and LF Medical Services, as highly prolific oxycodone pill mills frequented by a group of doctor shoppers. A small group of employees from the practice broke off and formed PM Medical, which allegedly engaged in the same pattern of criminal activity.

The investigation, called “Operation Avalanche,” included several instances of physical surveillance, interviews with patients and former employees, a series of Russian-language wiretaps, analysis of medical records, consultations with medical and insurance industry experts, and a review of financial records associated with the clinics and other related corporate entities.

The defendants allegedly prescribed over 3.7 million oxycodone pills between early 2012 and early 2017 and ordered reimbursed procedures that generated over $16 million in revenue. The indicted medical practitioners also allegedly prescribed over 2.6 million pills between mid-2013 and early 2017, and ordered reimbursements that generated more than $8 million in profits.

According to the press release, the investigation also revealed that oxycodone prescriptions were routinely written for no legitimate medical reason, and that some medical practitioners were pressured to write the illegal prescriptions.

The indictments contain a combined 477 charges that include counts of money laundering, health care fraud, and unlawfully selling prescriptions of controlled substances.

Reference

Operation Avalanche: Millions of narcotic painkillers pumped onto black market, millions fraudulently billed to Medicaid, Medicare [news release]. New York. DEA’s website. https://www.dea.gov/divisions/nyc/2017/nyc040717.shtml. Accessed April 10, 2017.