Two pharmacy owners in Brooklyn and Queens, Taesung Kim and Dacheng Lu, have been accused of submitting false and fraudulent claims to Medicare and Medicaid, according to an indictment unsealed in federal court on May 2nd. The pair owned and operated four pharmacies in total. Federal prosecutors claim that between January 2015 and December 2022, Kim and Lu conspired with others to submit fraudulent claims to the two government programs. The claims were for the dispensing of prescriptions and over-the-counter products that were not medically necessary, procured by the payment of kickbacks and bribes, or not provided at all.
In addition, prosecutors allege that Kim and Lu worked with others who paid illegal kickbacks and bribes in the form of cash and supermarket gift certificates to Medicare beneficiaries and Medicaid recipients who filled prescriptions at their pharmacies. Investigators also found that illegal kickbacks were paid to doctors who prescribed unnecessary medications in the form of rent and office space.
In total, the pair allegedly submitted around $26 million in fraudulent claims and laundered the proceeds through shell entities to generate cash that was then dispersed as profits to themselves and the pharmacies’ other owners. They also paid customers as kickbacks.
Kim and Lu are each charged with conspiracy to commit healthcare fraud, conspiracy to commit money laundering, and conspiracy to pay illegal healthcare kickbacks and bribes. If convicted on all counts, they face up to 35 years in federal prison.
