N.Y. U.S. Attorney: Pharmacy Owner Sentenced to Four Years in Prison for Health Care Fraud - Insurance News | InsuranceNewsNet

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April 19, 2024 Newswires
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N.Y. U.S. Attorney: Pharmacy Owner Sentenced to Four Years in Prison for Health Care Fraud

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NEW YORK, April 19 -- The office of the U.S. Attorney for the Southern District of New York issued the following news release on April 18, 2024:

Damian Williams, the United States Attorney for the Southern District of New York, announced that NERIK ILYAYEV was sentenced today to four years in prison for his involvement in a multimillion-dollar health care fraud scheme that targeted the Medicare and Medicaid programs and private insurance companies. ILYAYEV owned and operated two different pharmacies and submitted millions of dollars in fraudulent claims to the government health care programs and private insurers. ILYAYEV previously pled guilty to one count of conspiracy to commit health care fraud before U.S. District Judge Gregory H. Woods, who imposed today's sentence.

U.S. Attorney Damian Williams said: "Nerik Ilyayev took advantage of our nation's health care system, which provides payments for critical medications for low-income HIV patients. He paid illegal kickbacks to these patients to use their billing information and took millions of dollars in reimbursements from the Medicare and Medicaid program for medications that he did not actually dispense. This prosecution and today's sentence are part of our Office's ongoing work in combating fraud in the health care system and ensuring that public resources are spent on patients who need them, rather than being fraudulently stolen by criminal actors."

According to the Complaint, Information, court filings, and statements made in public court proceedings:

From approximately February 2021 through March 2022, ILYAYEV owned and operated a pharmacy in Manhattan ("Pharmacy-1"). ILYAYEV used Pharmacy-1 to pay illegal kickbacks to low-income HIV patients to recruit them to fill prescriptions for expensive HIV medications at Pharmacy-1. ILYAYEV did not actually obtain or provide HIV medications to these illegally recruited patients, but instead bought unopened bottles of pills back from the patients at a small fraction of their true value so he could re-use the same pills over and over again. ILYAYEV, on behalf of Pharmacy-1, then submitted fraudulent insurance claims to Medicare and Medicaid to cover the cost of the HIV medications he claimed to be dispensing. In order to conceal his role in the fraud scheme, ILYAYEV used the identity of another person ("Individual-1") and pretended to be Individual-1 to own and operate Pharmacy-1. Medicare and Medicaid collectively paid approximately $5.2 million in fraudulent claims for HIV medications to Pharmacy-1.

After shutting down Pharmacy-1, ILYAYEV took control of another pharmacy in Queens, New York ("Pharmacy-2"). Again, to conceal his role in the fraud, ILYAYEV used the identity of another person and pretended to be this individual to own and operate Pharmacy-2. Pharmacy-2 submitted fraudulent insurance claims to no-fault automobile insurance providers. Pharmacy-2 defrauded the no-fault automobile insurance providers of approximately $1.2 million. In addition, Pharmacy-2 unlawfully sold pharmaceuticals to other pharmacies that ILYAYEV had obtained from illegitimate sources.

* * *

In addition to the prison term, ILYAYEV, 36, of Queens, New York, was sentenced to three years of supervised release and ordered to pay restitution and forfeit more than $6 million.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of the Inspector General. Mr. Williams also thanked the National Insurance Crime Bureau and the Investigations Medicare Drug Integrity Contractor for their assistance in the investigation.

The case is being handled by the Office's Illicit Finance and Money Laundering Unit. Assistant U.S. Attorneys Cecilia E. Vogel and Thane Rehn are in charge of the prosecution.

* * *

Original text here: https://www.justice.gov/usao-sdny/pr/pharmacy-owner-sentenced-four-years-prison-health-care-fraud

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