A former president of a pharmacy business admitted his role in a health care kickback conspiracy involving prescriptions for Medicare and Tricare beneficiaries while the operations manager at a Union City pharmacy admitted his role in another multimillion-dollar conspiracy to defraud insurers by paying bribes to medical providers.
Elan Yaish, 53, of Israel, pleaded guilty on Aug. 16, 2023, before U.S. District Judge Esther Salas in Newark federal court to an information charging him with conspiracy to violate the federal anti-kickback statute.
Ruben Sevumyants, 40, of Marlboro, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to two counts of a superseding indictment charging him with conspiring to commit health care fraud as well as the federal anti-kickback statute.
From September 2017 to around December 2020, prosecutors claim while Yaish participated in operating pharmacies, including Apogee Bio-Pharm LLC, in Edison, he and others agreed to engage in a scheme to pay marketing companies to direct prescriptions for expensive medications to those drug stores.
The marketing companies identified Medicare and Tricare beneficiaries to target for expensive drugs and contacted the beneficiaries by telephone to pressure them to agree to try expensive medications, such as pain creams, scar creams, eczema creams, and migraine medication.
U.S. Attorney Philip R. Sellinger said Sevumyants, “admitted taking part in a scheme to steal millions of dollars from the health care system.”
“From bribing doctors to billing for medication refills that were never provided, this conspiracy gamed the system, and Sevumyants profited along the way,” Sellinger said. “He will now face the appropriate punishment for his crimes. Our office will always be on the lookout for those who try to turn our health insurance system into an ATM.”
“It can be hard to see why investigations like this matter to the general public going about their lives,” Sellinger said. “However, healthcare professionals and pharmacies are meant to keep us healthy, not inflict harm. As healthcare recipients, we all end up footing the bills for fraudsters because our premiums increase to cover the cost of their crimes. We can’t do it alone.”
Sellinger said anyone who is a victim of this type of fraud or sees it happening, should dial 1-800-CALL-FBI to report it.
Medicare is a national government-run health insurance program that covers everyone over the age of 65 in the United States, as well as people with end-stage renal disease and amyotrophic lateral sclerosis (ALS or Lou Gehrig’s disease).
Tricare is a program of the Department of Defense that provides civilian health benefits for United States Armed Forces personnel, including some members of the reserve components; military retirees; and their dependents.
The marketing companies then transmitted recordings of telephone calls with the beneficiaries, together with pre-marked prescription pads for particular drugs that would yield exorbitant reimbursements, to telemedicine companies.
The marketers paid the telemedicine companies kickbacks for every beneficiary referred for a prescription, and the telemedicine companies paid doctors to approve the prescriptions. The marketing companies then directed the prescriptions to pharmacies, including Apogee, with which they had kickback arrangements.
The pharmacies filled the prescriptions and sought reimbursement from federal health care benefit programs, including Medicare and Tricare.
The pharmacies, including Apogee, then paid a portion of each reimbursement to the marketing companies as a kickback. As a result of the scheme, Yaish and his conspirators caused a loss to Medicare and other federal health care benefit programs of over $32 million.
The charge of conspiracy to violate the Anti-Kickback Statute is punishable by a maximum potential penalty of five years in prison, and a maximum fine of $250,000, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Dec. 20, 2023.
Charges remain pending against two of Sevumyants’s conspirators – Samuel “Sam” Khaimov and Yana Shtindler, both of Glen Head, New York.
Sevumyants’s other conspirators in the kickback scheme are Igor Fleyshmakher, of Holmdel, and Alex Fleyshmakher of Morganville. Alex Fleyshmakher previously pleaded guilty to his role in the conspiracy and is awaiting sentencing; Igor Fleyshmakher previously pleaded guilty and was sentenced in November 2021 to 41 months in prison.
According to prosecutors, the Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” in Union City, New Jersey, and Bronx, New York, processing expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis.
Sevumyants was Prime Aid Union City’s operations manager. Khaimov was a co-owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Khaimov’s wife, Shtindler, was Prime Aid Union City’s administrator.
Alex Fleyshmakher worked at Prime Aid Union City and was an on-paper owner of Prime Aid Bronx. His father, Igor Fleyshmakher, was a co-owner of Prime Aid Union City. Initially, the Prime Aid Pharmacies obtained retail network agreements with several pharmacy benefit managers (PBMs), which allowed them to receive reimbursement payments to prescription medications, including specialty medications.
PBMs acted as intermediaries on behalf of Medicare, Medicaid, and private healthcare insurance providers, so that when a pharmacy received a prescription, the pharmacy then submitted a claim for reimbursement to the PBM that represented the beneficiary’s drug plan.
Starting in 2009, to obtain a higher volume of prescriptions, Khaimov, Sevumyants, Alex Fleyshmakher, and other Prime Aid employees paid bribes to doctors and doctors’ employees to induce doctors’ offices to steer prescriptions to the Prime Aid Pharmacies.
The bribes included expensive meals and payments by cash, check, and wire transfers. Another method of bribery also involved paying an employee to work inside a doctor’s office. Prime Aid Union City – at the direction of Sevumyants, Shtindler, and Khaimov – also engaged in the pervasive fraudulent practice of billing health insurance providers for medications that were never provided to patients.
While Prime Aid generally provided medications for initial prescriptions it received, it systematically billed for refills for those same medications without ever dispensing them to patients.
From 2013 through 2017, Prime Aid Union City received tens of millions of dollars in reimbursement payments from Medicare, Medicaid, and private insurers for medications that Prime Aid Union City not only failed to give patients, but never ordered or had in stock at the pharmacy.
PBMs conducted routine audits of Prime Aid Union City and discovered its practice of billing but not dispensing medications. In response to these audits, Shtindler instructed Prime Aid employees to falsify records submitted to the PBMs.
Sevumyants, with Shtindler’s knowledge and approval, forged shipping records of a private commercial shipping company to make it appear as if medications were shipped to the patients when they were not.
The conspiracy to commit healthcare fraud count is punishable by a maximum of 10 years in prison and the conspiracy to pay illegal kickbacks is punishable by a maximum of five years in prison. Both counts are also punishable by a $250,000 fine, or twice the gross gain or loss from the offense, whichever is greatest. Sentencing is scheduled for Dec. 20, 2023.