Queens pharmacist and three managers cuffed for stealing millions of dollars in Medicaid fraud scheme

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A city pharmacist from Queens and three of her pharmacy managers were arrest for their alleged roles in a multimillion-dollar Medicaid scheme that involved HIV drugs and kickbacks, the Attorney General announced on Friday.

Irina Pichkhadze, 34, owner of First Choice Pharmacy, was charged alongside Queens residents Raymond Dieffenbacher, 46, and Tarlan Pinkhasov, 40, and Yana Dubrinskaya, 31, of Brooklyn, who work as pharmacy managers for Pichkhadze. First Choice Pharmacy, Express Audit Prevention Corp. (Express Audit) and OTC Distributors Inc. were also charged with crimes related to defrauding Medicaid out of over $10 million through the scheme allegedly based in First Choice Pharmacy in Harlem.

All four defendants were charged with grand larceny, health care fraud and scheme to defraud. Pichkhadze, Dieffenbacher and Dubrinskaya, along with Express Audit and OTC, were also charged with various counts of money laundering for allegedly knowingly conducting financial transactions designed to conceal the source of the larceny and health care fraud. Pichkhadze was also charged with criminal possession of a forged instrument.

The defendants are due back in court on Aug. 1.

“It is disturbing and deeply damaging to our society when health care professionals exploit our most vulnerable patients to steal millions of dollars reserved to provide New Yorkers with essential health care,” said Attorney General Letitia James. “We put our trust in medical providers to serve us with honesty and care, and these individuals took advantage of both that trust and our state. My office will continue to hold accountable those who forsake their professional responsibility to their patients and choose instead to use it to line their pockets with public funds.”

According to charges, the defendants allegedly paid or directed employees to pay cash kickbacks to Medicaid recipients in return for each patient’s agreement to fill their HIV prescriptions, which were filled at Pichkhadze’s First Choice Pharmacy, located at 245 East 124th St. in Manhattan. The pharmacy then allegedly billed and received hundreds of thousands of dollars from Medicaid for refills that First Choice Pharmacy either did not dispense to patients, a scheme known as “auto-refilling.”

According to state law, it is illegal for medical providers, including pharmacies, to pay or offer to pay cash kickbacks to anyone in return for the referral of medical services ultimately paid for by Medicaid.

Charges say that between Jan. 1, 2013, and Dec. 31, 2016, Pichkhadze’s First Choice Pharmacy allegedly didn’t purchase sufficient quantities of medication from licensed New York state drug wholesalers to justify the quantities of medication it claimed, through its billing records, to have dispensed to patients. Due to the false records allegedly filed by the Medicaid- and Medicaid-funded managed care organizations (MCOs) paid First Choice Pharmacy and the defendants over $10.2 million dollars that they allegedly were not entitled to.

Prosecutors say that large sums of money disguised as payments to pharmaceutical wholesalers that were allegedly put through banks accounts, bearing the names of Express Audit, OTC, Minnesota Independant [sic] Drugs, and Azure Drugs, among others. The latter two accounts were allegedly opened as assumed names for First Choice Pharmacy, where the defendants allegedly funneled money back to themselves under the guise of inventory purchases.

A search warrant executed at First Choice Pharmacy allegedly recovered hundreds of bottles of adulterated, diverted HIV medication. According to state law, pharmacies are required to only secure medication from licensed pharmaceutical wholesalers.

The Attorney General also filed a civil asset forfeiture and New York State False Claims Act action against criminal defendants as well as against three non-criminal defendants, Eduard Yagudayev, Janice Dieffenbacher and Marina Pichkhadze. The asset forfeiture action and civil recovery action seeks to recover over $22 million dollars in damages from the defendants for defrauding the state Medicaid program.

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