Two New York Pharmacy Owners Admit to Money Laundering in Medicare Fraud Case

On Wednesday, the Department of Justice announced that two New Yorkers pleaded guilty to conspiracy to commit money laundering of the proceeds from false and fraudulent Medicare claims. 

The DOJ’s press release states that the defendants, Arkadiy Khaimov and Peter Khaim, engaged in a sophisticated conspiracy to launder the proceeds from their fraudulent health care scheme involving over a dozen New York-area pharmacies. The men owned and controlled the pharmacies and used them to submit over $18 millions in fraudulent Medicare claims, the agency says. 

The DOJ asserts that Khaim and Khaimov used their pharmacies to submit Medicare claims for expensive cancer medications, Targretin Gel 1% and Panretin Gel 0.1%, that were not prescribed by physicians or dispensed to patients. Further, the pair purportedly exploited COVID-19-related “emergency override” billing codes to submit additional fraudulent claims, exploiting the pandemic for their own financial gain. 

The press release further explains that the men used several shell companies including fake pharmacy wholesale companies to conceal the proceeds from their healthcare fraud scheme. The funds were typically sent to companies in China and then distributed to individuals in Uzbekistan who would send funds to the defendants in cash. Additionally, the DOJ alleges that the fake wholesale companies would distribute certified cashier’s checks and cash to the defendants and their families. 

The two men each pleaded guilty to one count of conspiracy to commit money laundering and now face a maximum sentence of 20 years in prison. The defendants will be sentenced next May.