Pharmacy owner and manager accused of stealing millions from Medicaid

July 12, 2023 Rob Abruzzese
Attorney General Letitia James
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Attorney General Letitia James announced on Tuesday the indictment, arrest, and arraignment of Juan Poveda, the owner, and Javier Burbano, the manager, of a Queens-based pharmacy for allegedly partaking in a scheme that saw millions stolen from Medicaid.

Poveda, 32, and Burbano, 32, who both run Santiago Pharmacy under CSE Drug Corp., are accused of paying kickbacks to Medicaid recipients for filling their HIV prescriptions at their pharmacy. They also allegedly submitted fraudulent claims for HIV drugs like Biktarvy, which were either illicitly acquired or never actually purchased.

In addition to Grand Larceny in the First Degree and Health Care Fraud in the Second Degree, the defendants face charges for allegedly paying unlawful kickbacks to Medicaid beneficiaries, a violation of New York Social Services Law. The charges brought against them include Money Laundering in the First Degree and in the Second Degree for purportedly conducting financial transactions intended to disguise the illegally procured funds.

According to the Attorney General’s Office, search warrants were executed at Corona Chemist Pharmacy in Corona and Mi Botica Pharmacy in Flushing, Queens as part of the ongoing investigation. If convicted, the accused face a maximum of 25 years in prison for class B felonies like Grand Larceny and Money Laundering in the First Degree, and up to 15 years for class C felonies like Health Care Fraud in the Second Degree.

Attorney General James expressed her disappointment in the situation, stating, “We trust pharmacies to attend to the needs and welfare of their patients, not to take advantage of our most vulnerable neighbors to line their own pockets. Stealing from Medicaid is a reprehensible crime, and New Yorkers can count on my office to hold these bad actors accountable.”

Allegedly, the defendants paid cash kickbacks to Medicaid recipients to incentivize them to fill their HIV prescriptions at Santiago Pharmacy, subsequently billing Medicaid and receiving millions of dollars for those prescriptions. The court papers claim that Poveda and Burbano stole more than $2.9 million from Amida Care, a Medicaid-funded managed care organization, by billing for drugs that were either not legally obtained or never existed. The fraudulent funds were then supposedly concealed by routing the criminal proceeds through pass-through bank accounts without any apparent business operations.

It is essential to note that the charges filed in this case are accusations. The defendants are presumed innocent until proven guilty in a court of law.

The Attorney General thanked the New York State Department of Health, the Office of the Medicaid Inspector General, and the United States Department of Health and Human Services Office of the Inspector General for their assistance in this investigation. She also acknowledged the cooperation of Medicaid MCOs Amida Care and VNS Choice, pharmacy benefit managers Express Scripts and Med Impact, pharmacy services administrative organization AlignRx, and pharmaceutical wholesaler AmerisourceBergen.

This ongoing investigation involves a team of investigators and prosecutors led by Attorney General Thomas O’Hanlon. The Office of the Medicaid Fraud Control Unit, which oversees this case, is funded with a federal grant from the U.S. Department of Health and Human Services and supplemented by New York State. The office regularly recovers more in law enforcement actions than it receives in state funding.


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