June 9, 2018

New York State's Comptroller and New York State's Attorney General announce guilty plea of Queens pharmacy owner for $1.5 million Medicaid fraud scheme


New York State's Comptroller and New York State's Attorney General announce guilty plea of Queens pharmacy owner for $1.5 million Medicaid fraud scheme
Source: Office of the State Comptroller

On June 8, 2018 State Comptroller Thomas P. DiNapoli and Attorney General Barbara  Underwood announced that Arkady Goldin of Brooklyn and Value Pharmacy, Inc., ["Value"] a pharmacy formerly located in Corona, Queens before re-locating to its current location in Lynbrook, NY, entered felony guilty pleas in Supreme Court, Queens County admitting to defrauding the State’s Medicaid program out of $1.5 million. The case was investigated and prosecuted as part of the Attorney General and State Comptroller’s Joint Task Force on Public Integrity.

The State Comptroller said that "Arkady Goldin billed Medicaid millions for cancer medications he never dispensed. Thanks to our partnership with the Attorney General’s Office, Goldin has been convicted, his corrupt pharmacy closed, and he and his partners will pay the state back for the $3 million total in stolen Medicaid funds" while the Attorney General added that “We have zero tolerance for those who defraud the state’s Medicaid program. We will continue to aggressively pursue all individuals who steal from Medicaid to enrich themselves at the expense of those who need the program for their fundamental health care.”

Supreme Court Justice Barry Kron accepted Goldin’s guilty plea to Health Care Fraud in the Second Degree, a class C felony, and to violating the Social Services Law prohibition on the payment of kickbacks related to the State’s Medicaid program, a class E felony.

The pharmacy entered a guilty plea to Grand Larceny in the First Degree, a class B felony. Goldin will be sentenced to six months incarceration, five years’ probation, and, along with Value, will be required to pay $1.5 million as restitution for money stolen from Medicaid. The defendants will also pay an additional $1.5 million in financial penalties, including a $10,000 fine that must be paid by the corporation. Goldin will also be required to perform 200 hours of community service.

Goldin's and Value's pleas will also resolve a separate civil asset forfeiture and False Claims Act law suit filed by the Attorney General’s Medicaid Fraud Control Unit Civil Enforcement Division in New York State Supreme Court, Queens County.

In papers filed in court, the State alleged that Goldin, an owner of Value, which formerly was located in Corona, Queens, had a kickback arrangement with a former employee of Nassau University Medical Center (NUMC) who earlier in the investigation pleaded guilty to unlawfully accepting kickbacks related to Medicaid services. In exchange for steering expensive cancer prescriptions from NUMC to Value, Goldin paid the hospital employee a monthly cash referral fee and provided him with other items of value, including tickets to sporting events, an iPad, and free meals. State law prohibits all medical providers, including pharmacies, from paying or offering to pay kickbacks to another person in return for the referral of medical services ultimately paid for by Medicaid.  

Additionally, as part of the scheme, the investigation uncovered that Value did not purchase sufficient amounts of medication from licensed New York State drug wholesalers that would have been necessary if Value legitimately dispensed prescriptions for which Value billed Medicaid. As a result of the unlawful scheme, Medicaid ultimately paid Value over $1.5 million for unlawful claims for medications.

Since 2011, the Attorney General and Comptroller have worked together to fight corruption through their Joint Task Force on Public Integrity. They have brought charges against dozens of individuals implicated in public corruption schemes around the state – resulting in the return of millions in restitution to taxpayers through these convictions.

Comptroller DiNapoli’s investigation was led by the OSC Division of Investigations, working with the OSC Division of State Government Accountability.

The AG’s MFCU investigation was conducted by Investigator Daniel McCarron with the support of Supervising Investigators Dominick DiGennaro and Ronald Lynch, under the supervision of MFCU Deputy Chief Investigator Kenneth Morgan. Financial analysis was developed by Auditor-Investigator Edgar Romero and Senior Auditor-Investigator Olga Sunitsky, under the supervision of MFCU NYC Regional Chief Auditor Thomasina Smith. Investigative support was provided by Supervising Legal Assistant Wendy Dorival, as well as Confidential Legal Analysts Victoria Sepe, Daniel Herzog, and Patrice Noel. Additional components of the investigation were supported by Assistant Attorney General Lisa Wallace and Bureau Chief Brent Meltzer of the Attorney General’s Real Estate Finance Bureau.

The criminal case was prosecuted by Special Assistant Attorneys General Michael Leigh and Megan Friedland under the supervision of MFCU NYC Deputy Regional Director Twan Bounds, Regional Director Christopher M. Shaw, and MFCU’s Chief of Criminal Investigations–Downstate Thomas O’Hanlon. The civil case was litigated by Special Assistant Attorneys General Elizabeth Kappakas and Diana Elkind, with the assistance of MFCU Civil Enforcement Division Chief Carolyn Ellis. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney.  

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

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