A.G. Schneiderman Announces Indictment Against Pharmacy Owner, Pharmacist, And Three Pharmacies For Allegedly Defrauding Medicaid Of Over $3 Million

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
November 17, 2017

Attorney General’s Press Office / 212-416-8060
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A.G. SCHNEIDERMAN ANNOUNCES INDICTMENT AGAINST PHARMACY OWNER, PHARMACIST, AND THREE PHARMACIES FOR ALLEGEDLY DEFRAUDING MEDICAID OF OVER $3 MILLION  

Pharmacy Owner Allegedly Stole Over $3 Million By Falsely Billing HIV Medications That Were Never Dispensed

NEW YORK – Attorney General Eric T. Schneiderman today announced the indictment of Hin T. Wong (“Wong”), 49, of Manhattan, Mery Gooden, 58, of the Bronx, and three pharmacies. The indictment charges Wong, the owner of three Manhattan pharmacies – New York Pharmacy Inc. (“NY Pharmacy”), NYC Pharmacy Inc. (“NYC Pharmacy”), and New York Healthfirst Pharmacy Inc. (“NY Healthfirst”) – for defrauding several government-funded healthcare programs, including Medicaid and Medicare, by falsely billing prescription refills and stealing over $3 million in reimbursement for medication they did not dispense. Wong was indicted for Grand Larceny in the First Degree, a class “B” felony, and other crimes. In addition, Mery Gooden, a pharmacist at NYC Pharmacy, was indicted for Grand Larceny in the Second Degree and other related crimes.

“Pharmacists’ most important duty must be to the welfare of their patients – not lining their own pockets,” said Attorney General Schneiderman. “The blatant theft and abuse of Medicaid is reprehensible and will not be tolerated by my office.”

Following up on a tip from Amida Care Inc., a Medicaid Managed Care Organization, the Attorney General’s Medicaid Fraud Control Unit (MFCU) conducted several undercover operations at NY Pharmacy, NYC Pharmacy, and NY Healthfirst Pharmacy. Wong, a licensed pharmacist, and Gooden, the supervising pharmacist of NYC Pharmacy, allegedly paid undercover agents posing as Medicaid patients cash for HIV prescriptions and for referring other Medicaid patients to bring their prescriptions to NY Pharmacy and/or NYC Pharmacy. 

The defendants thereafter allegedly submitted false claims for reimbursement to various insurers, including Medicaid, for prescription refills Wong nor her staff ever dispensed – a scheme known as “auto-refilling.” Wong, NY Pharmacy, NYC Pharmacy, and NY Healthfirst are charged with allegedly receiving over $60,000 for prescription refills dispensed just to undercover agents. 

Today’s indictment further alleges that Wong’s pharmacies did not purchase enough medication to support their substantial billings to Medicaid and other insurers. Between January 1, 2014 and August 1, 2017, Wong’s pharmacies billed Medicaid and other insurers over $11 million for medications they allegedly dispensed, but purchased only a fraction of the amount of drugs necessary to fill those prescriptions. Today’s indictment alleges that Wong and her pharmacies stole over $3 million as a result of obtaining reimbursement for medication they did not dispense.

Today’s indictment charged the two defendants and three pharmacies as follows:

  • Hin T. Wong is charged with one count of Grand Larceny in the First Degree, a class B felony; four counts of Grand Larceny in the Second Degree, a class C Felony; two counts of Healthcare Fraud in the Second Degree, a class C felony; three counts of Scheme to Defraud in the First Degree, a class E felony; twelve counts of Offering a False Instrument for Filing in the First Degree, a class E felony; and one count Medical Assistance Provider; Prohibited Practices, a class E felony.
  • Mery Gooden is charged with two counts of Grand Larceny in the Second Degree, a class C felony; one count of Grand Larceny in the Third Degree, a class D Felony; one count of Scheme to Defraud in the First Degree, a class E felony; and one count Medical Assistance Provider; Prohibited Practices, a class A misdemeanor.
  • NY Pharmacy Inc. is charged with one count of Grand Larceny in the First Degree, a class B felony; four counts of Grand Larceny in the Second Degree, a class C Felony; two counts of Healthcare Fraud in the Second Degree, a class C felony; three counts of Scheme to Defraud in the First Degree, a class E felony; nine counts of Offering a False Instrument for Filing in the First Degree, a class E felony; and one count Medical Assistance Provider; Prohibited Practices, a class E felony. 
  • NYC Pharmacy Inc. is charged with one count of Grand Larceny in the First Degree, a class B felony; three counts of Grand Larceny in the Second Degree, a class C felony; one count of Scheme to Defraud in the First Degree, a class E felony; three counts of Offering a False Instrument for Filing in the First Degree, a class E felony; and one count Medical Assistance Provider; Prohibited Practices, a class A misdemeanor. 
  • New York Healthfirst Pharmacy Inc. is charged with two counts of Grand Larceny in the Second Degree, a class C Felony and one count of Scheme to Defraud in the First Degree, a class E felony. 

If convicted, Wong faces up to twenty-five years in state prison and Gooden faces up to fifteen years in state prison; each of Wong’s pharmacies can be ordered to pay a fine double what it gained from its criminal conduct, as well as restitution to those victimized by its conduct.

Hin T. Wong and NY Pharmacy Inc. were initially arrested on August 24, 2017 by MFCU investigators following the execution of a search warrant at NY Pharmacy. Today’s indictment supersedes an initial indictment and is the product of MFCU’s continuing investigation into defendants’ conduct.

On August 24, 2017, the Attorney General filed a civil asset forfeiture and recovery action against Wong, her three pharmacies, and another entity owned by Wong, KT Studio Inc. a/k/a Dove Cat Studio a/k/a C’est La Vie Studio, in New York County Supreme Court, seeking over $11 million in damages. As part of the civil action, the Attorney General also obtained a court order freezing the bank accounts held by the defendants to preserve money wrongfully obtained from Medicaid. The civil action is still pending.

The Attorney General thanks the New York State Office of the Medicaid Inspector General and the United States Department of Health and Human Services Office of the Inspector General (HHS-OIG) for their continued partnership and assistance in this investigation. The Attorney General also thanks Medicaid managed care companies Amida Care and Wellcare; pharmacy benefit managers CVS Caremark and Optum RX; and pharmaceutical wholesalers HD Smith and McKesson for their cooperation throughout the investigation.

The charges against the defendants are merely accusations. The defendants are presumed innocent unless and until proven guilty in a court of law.

MFCU’s investigation was conducted by Investigator Nefertiti Clarke with the assistance of Supervising Investigator Dominick DiGennaro and Deputy Chief Investigator Kenneth Morgan. The audit investigation was conducted by Supervising Principal Auditor Investigator Cristina Marin and Auditor Investigator Megan Scott with the assistance of New York City Regional Deputy Chief Auditor Jonathan Romano and New York City Regional Chief Auditor Thomasina Smith. Investigative support was provided by Confidential Legal Analyst Nicole Maher.

The criminal case is being prosecuted by MFCU Special Counsel Imran S. Ahmed with the assistance of Special Assistant Attorney General George Bronner and New York City Regional Director Christopher M. Shaw. The civil action is being handled by Senior Counsel Marie Spencer and Special Assistant Attorney General Elizabeth Kappakas with the assistance of MFCU Chief of Civil Enforcement Carolyn Ellis.  Special Assistant Attorney General Thomas O’Hanlon is the MFCU Chief of Criminal Investigations-Downstate. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney.