A.G. Schneiderman Announces Indictment Of Three Brooklyn Pharmacies, Pharmacy Owners, And Pharmacists For Alleged $5 Million Medicaid Fraud

Pharmacies Allegedly Used Pharmacist Barred From Medicaid And Billed Medicaid For Medications Never Dispensed While Hiding The Identity Of The True Owner Who Lived In Pakistan

NEW YORK – Attorney General Eric T. Schneiderman today announced the indictment of three pharmacies and seven individuals for allegedly defrauding Medicaid of over $5 million. The pharmacies were allegedly paying customers for prescriptions obtained from a local doctor and then billed Medicaid for the drugs even though they were never dispensed.   

“Those who defraud Medicaid to line their own pockets are scamming taxpayers and depriving others of important health care services, and today’s indictment sends a clear message that there will be consequences,” said Attorney General Schneiderman. “My office will continue to crack down on those who engage in waste, fraud, and abuse of taxpayer money.” 

Corporate defendants Perfect Gift US, Inc., d/b/a Central Pharmacy, located at 397 Mother Gaston Blvd., Princess RX, Inc., d/b/a Hastings Drug Corp., located at 2061 Atlantic Ave., and Bright RX, Inc., d/b/a Buffalo Drugs, located at 183 Buffalo Ave., and their owners and operators, Munir A. Khan, Beenish Daha, and Muhammed Z. Khan, a/k/a Sean Chris, were indicted for committing various felonies, including  Grand Larceny in the First Degree, Grand Larceny in the Second Degree, and Offering a False Instrument for Filing in the First Degree.  In addition, two pharmacists, Louis A. Pisani and Kenneth Brown, were indicted on similar charges. Two others, Chaudury M. Yaqoob and Jose Cepeda, were also indicted for various felonies, including Grand Larceny in the Fourth Degree and Offering a False Instrument for Filing in the First Degree.  If convicted of the Class B felonies, the defendants face up to twenty-five years in state prison.  

In response to information provided by the New York City Human Resources Administration, the Attorney General’s Medicaid Fraud Control Unit (“MFCU”), together with the New York State Office of the Welfare Inspector General, learned that Jose Cepeda was allegedly directing or steering patients from a local doctor’s office to Perfect Gift Pharmacy with their prescriptions. The clerk who was working behind the counter, Chaudury M. Yaqoob, would allegedly pay cash for the prescriptions.  The pharmacy would then allegedly bill Medicaid for the medications that were never dispensed, but were, instead, placed back on the shelf. 

The investigation disclosed that Perfect Gift and Princess Pharmacies were owned and operated by Munir A. Khan. Munir A. Khan was banned from billing Medicaid and deported to Pakistan following a 2008 federal conviction for adulteration of prescription drugs and the filing of false tax returns. To hide Khan’s involvement in the pharmacies, a violation of Medicaid’s rules, both Perfect Gift and Princess Pharmacies were allegedly, on documents filed with the state, owned by Khan’s daughter, Beenish Daha, who was listed as President.  Bright RX was solely owned and operated by Munir Khan’s son, Muhammed Z. Khan, a/k/a Sean Chris, as President.   

Audits conducted on Perfect Gift, Princess, and Bright RX pharmacies, revealed a short fall between the amount of drugs ordered by the pharmacies from their suppliers and the amount of medication that the pharmacies claimed to Medicaid to have provided to Medicaid recipients. The shortfall showed inordinate billings of Medicaid for medications that were allegedly never bought and sold. The audit showed a shortfall of $3,523,755.33 at Perfect Gift Pharmacy, $955,341.79 at Princess Pharmacy, and $861,935.80 at Bright RX Pharmacy.  

The investigation further revealed that two of the pharmacies, Perfect Gift and Bright RX, Inc. billed, and were paid by Medicaid, for allegedly rendering services while using a supervising pharmacist who had been barred or excluded from the Medicaid program – another violation of Medicaid rules and regulations. Medicaid paid Perfect Gift $1,368,300.11 while Louis A. Pisani was allegedly its supervising pharmacist and Bright RX $175,057.37 while allegedly using Kenneth Brown as its supervising pharmacist. The unsealed indictment charged the three pharmacies and seven individuals as follows: 

Corporate Defendants 

Perfect Gift US, Inc., d/b/a Central Pharmacy, is charged with two counts of Grand Larceny in the First Degree, Class B Felonies, one count of Grand Larceny in the Fourth Degree, a Class E Felony, and seven counts of Offering a False Instrument For Filing in the First Degree, Class E Felonies.   

Princess RX, Inc., d/b/a Hastings Drug Corp., is charged with one count of Grand Larceny in the Second Degree, a Class C Felony.   

Bright RX, Inc., d/b/a Buffalo Drugs, is charged with two counts of Grand Larceny in the Second Degree, Class C Felonies, and three counts of Offering a False Instrument For Filing in the First Degree, Class E Felonies.   

If convicted, the corporations can be ordered to pay a fine of double what they gained from their criminal conduct as well as restitution to those victimized by their conduct. 

Individual Defendants 

Munir A. Khan, age 61, is charged with two counts of Grand Larceny in the First Degree, Class B Felonies, one count of Grand Larceny in the Second Degree, a Class C Felony, one count of Grand Larceny in the Fourth Degree, a Class E Felony, and seven counts of Offering a False Instrument for Filing in the First Degree, Class E Felonies.  If convicted, the defendant faces up to 25 years in prison. 

Beenish Daha, age 31, of Jersey City, NJ, is charged with two counts of Offering a False Instrument for Filing in the First Degree, Class E Felonies.  The defendant was arrested on November 13, 2014 and was released in her own recognizance after surrendering her passport. She was directed to return to court on January 14, 2015.  If convicted, the defendant faces up to four years in prison. 

Muhammed Z. Khan, a/k/a Sean Chris, age 33, of Queens, is charged with two counts of Grand Larceny in the Second Degree, Class C Felonies, and three counts of Offering a False Instrument for Filing in the First Degree, Class E Felonies.  The defendant was arrested today and arraigned by the Honorable Danny Chun.  If convicted, the defendant faces up to fifteen years in prison. 

Louis A. Pisani, age 63, of Elmont, is charged with one count of Grand Larceny in the First Degree, a Class B Felony, and three counts of Offering a False Instrument for Filing in the First Degree, Class E Felonies.  The defendant surrendered to MFCU investigators on November 6, 2014 and was released on his own recognizance after surrendering his passport.  He was directed to return to court on January 7, 2015.  If convicted, the defendant faces up to 25 years in prison. 

Kenneth Brown, age 64, of Brooklyn, is charged with one count of Grand Larceny in the Second Degree, a Class C Felony, and three counts of Offering a False Instrument for Filing in the First Degree, Class E Felonies. The defendant surrendered to MFCU investigators on November 6, 2014 and was released on his own recognizance.  He was directed to return to court on January 7, 2015.   If convicted, the defendant faces up to fifteen years in prison. 

Chaudury M. Yaqoob, age 56, is charged with one count of Grand Larceny in the Fourth Degree, a Class E Felony, and two counts of Offering a False Instrument for Filing in the First Degree, Class E Felonies.  If convicted, the defendant faces up to four years in prison. 

Jose Cepeda, age 66, of Brooklyn, is charged with one count of Grand Larceny in the Fourth Degree and two counts of Offering a False Instrument for filing in the First Degree, Class E Felonies.  The defendant was arrested today and is awaiting arraignment. If convicted, the defendant faces up to four years in prison. 

Defendants Munir A. Khan and Chaudury M. Yaqoob have not yet been arrested and are believed to be living in Pakistan.  

Attorney General Schneiderman thanks the New York City Human Resources Administration, the New York State Office of the Welfare Inspector General, the Office of the Medicaid Inspector General and the New York City Police Department for their assistance in this investigation. 

The investigation was conducted by Senior Investigator Arelis Restituyo, with the assistance of Supervising Investigator Victor Maldonado, and Deputy Chief Investigator Kenneth Morgan.  MFCU’s audit investigation was conducted by Associate Auditor Investigator David Verhey and Special Auditor Investigator Ryan Rafferty with the assistance of Principal Special Auditor Investigator Emmanuel Archer and New York City Regional Chief Auditor Thomasina Smith. 

The criminal case is being prosecuted by Special Assistant Attorney General William J. Wallace with the assistance of New York City Regional Director Christopher M. Shaw. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations – Downstate.  The Medicaid Fraud Control Unit is led by Acting Director Amy Held.  The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan. 

The charges filed in this case are accusations. The defendants are presumed innocent until proven guilty in a court of law.

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