By In a significant crackdown on healthcare fraud, local pharmacy providers have been charged with orchestrating a massive scheme to defraud Medicare and Medicaid. The indictment, unsealed in Brooklyn, charges two New York men, Taesung “Terry” Kim and Dacheng “Bruce” Lu, with submitting false and fraudulent claims for medically unnecessary prescriptions and over-the-counter products that were not actually dispensed. The scheme, which involved four pharmacies, resulted in approximately $29 million in fraudulent claims. The charges include conspiracy to commit healthcare fraud, money laundering, and paying illegal kickbacks and bribes.
The fraudulent activities carried out by Kim and Lu involved submitting false claims to Medicare and Medicaid for products that were either medically unnecessary or not provided at all. The indictment reveals that the duo conspired with others to pay illegal kickbacks and bribes to Medicare beneficiaries and Medicaid recipients to fill their prescriptions at their pharmacies. These kickbacks and bribes were in the form of cash and supermarket gift certificates.
The scheme also involved paying illegal kickbacks and bribes to doctors who prescribed the medically unnecessary medications filled at their pharmacies. These payments were made in the form of rent and office staff, further entrenching the fraudulent activities. The fraudulent claims submitted by Kim and Lu’s pharmacies amounted to approximately $29 million, highlighting the extensive nature of the scheme.
The indictment also charges Kim and Lu with conspiracy to commit money laundering. They allegedly laundered the proceeds of their fraud through shell entities to generate cash that they could disperse as unrecorded profits to themselves and the pharmacies’ other owners. This elaborate scheme underscores the lengths to which the defendants went to defraud the healthcare system.
Legal Consequences and Charges
The charges against Kim and Lu are severe, reflecting the gravity of their fraudulent activities. If convicted, they each face a maximum penalty of 10 years in prison for conspiracy to commit healthcare fraud, 20 years in prison for conspiracy to commit money laundering, and five years in prison for conspiracy to pay illegal healthcare kickbacks and bribes. The indictment serves as a stark reminder of the legal consequences of engaging in healthcare fraud.
The announcement of the charges was made by Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, Assistant Director in Charge Michael J. Driscoll of the FBI New York Field Office, and Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG). The FBI and HHS-OIG are actively investigating the case, underscoring the seriousness of the charges.
The indictment is part of a broader effort by the Justice Department to crack down on healthcare fraud. The department has been working tirelessly to identify and prosecute individuals and entities involved in fraudulent activities that undermine the integrity of the healthcare system. The charges against Kim and Lu are a testament to these efforts and serve as a warning to others who may be engaged in similar activities.
Impact on the Healthcare System
The fraudulent activities carried out by Kim and Lu have significant implications for the healthcare system. Healthcare fraud not only results in financial losses but also undermines the trust and integrity of the healthcare system. The fraudulent claims submitted by Kim and Lu’s pharmacies diverted resources away from legitimate healthcare needs, impacting the quality of care provided to patients.
The charges against Kim and Lu highlight the need for robust measures to prevent and detect healthcare fraud. The Justice Department’s efforts to crack down on fraudulent activities are crucial in maintaining the integrity of the healthcare system. By holding individuals and entities accountable for their actions, the department aims to deter others from engaging in similar fraudulent activities.
The case also underscores the importance of vigilance and oversight in the healthcare system. Healthcare providers, beneficiaries, and recipients must be aware of the potential for fraud and take steps to report suspicious activities. The collaboration between the Justice Department, FBI, and HHS-OIG in investigating and prosecuting healthcare fraud is essential in protecting the integrity of the healthcare system.