A.G. Schneiderman Announces Prison Sentence In Medicaid Thefts Of $10 Million By Five NYC Pharmacies

NEW YORK - Attorney General Eric T. Schneiderman today announced the sentencing of Sanjay K. Patel, the former owner of three Bronx and one Manhattan pharmacy, for stealing $7.7 million from New York State’s Medicaid Program.Patel was sentenced in State Supreme Court in the Bronx to a prison term of 1 to 3 years. He was arrested by special investigators from the Attorney General’s Medicaid Fraud Control Unit (MFCU) last fall after a wide-ranging investigation uncovered over $10 million in fraud at several New York City pharmacies. The investigation ended with the arrest and convictions of five individuals, four of whom were licensed pharmacists in New York, and seven corporations. Since December, all of the defendants arrested as part of the investigation have admitted to stealing from Medicaid.

“These defendants, four of whom were licensed pharmacists, were entrusted to care for the sick.Instead, my office discovered thatthey betrayed the public trust, committed Medicaid fraud, and lined their pockets at the expense taxpayer’s expense,” Attorney General Schneiderman said. “We will continue to track down those who steal from the public and punish those who abuse their positions to fleece New York’s taxpayers and communities.”

The Attorney General’s investigation revealed that between 2003 and 2008, the defendant pharmacies, listed below, and several of their owners and pharmacists systematically bilked the State’s Medicaid program of over $10 million by submitting to Medicaid phony bills for drugs that they never dispensed to patients. The defendants owned or partially owned the following pharmacies, all of which are now closed or under new management:

1. Citi Care Pharmacy, 313 East 161^st Street, Bronx, NY
2. CommunityCare Pharmacy, 979 Westchester Avenue, Bronx, NY
3. Family Care Pharmacy, 1187 Grand Concourse,Bronx, NY
4. Village Pharmacy, 165 West 127^th Street, New York, NY
5. Akshar Pharmacy, 2200 Grand Concourse, Bronx, NY
6. Nayosha Pharmacy L.L.C., 755-B East 149^th Street, Bronx, NY
7. Yogi Pharmacy, 1945A University Avenue, Bronx, NY

Sanjay K. Patel, 44, of Edison, New Jersey, owned Citi Care, Community Care, Family Care, and Village Pharmacies.In December 2012, he pleaded guilty to two counts of Grand Larceny in the First Degree, one count of Grand Larceny in the Fourth Degree and Conspiracy in the Fourth Degree. A representative of Patel’s corporations -- Yogi Yagna Corp., Swamishreeji Corp., Swami Krupa Corp., and Akshar Health Corp. -- also entered pleas of guilty to felony charges.

Today, Bronx Supreme Court Justice Steven Barrett sentenced Sanjay K. Patel to state prison for his role in the scheme and ordered him to repay $7.7 million to the State.Patel has repaid Medicaid approximately $3 million and he remains responsible for paying the remaining $4.7 million dollars to the program.

The following pharmacists were also arrested pursuant to the investigation and have since pleaded guilty:

1. Divi Dixit, 43, of Edison, New Jersey, a former part owner and supervising pharmacist of Akshar Pharmacy.In December, Dixit and a representative of Sypram Corp., the corporate owner of Akshar Pharmacy, pleaded guilty to Grand Larceny in the Second Degree. On May 14, 2013, Justice Stephen Barrett sentenced Dixit to five years probation and 300 hours of community service. As part of his plea, Dixit paid full restitution, $1,103,981, to New York State.
2. Alpesh Patel, 43, of Elmwood Park, New Jersey, a former part owner and the supervising pharmacist of Yogi Pharmacy.In December, a representative of Patel’s corporation, P.S. Health LLC, the corporate owner of Yogi Pharmacy, pleaded guilty to Grand Larceny in the Second Degree, and Patel pleaded guilty to Petit Larceny. Justice Barrett sentenced Patel to a conditional discharge, which included 300 hours of community service, and ordered him to repay Medicaid full restitution plus interest in the amount of $267,545.72. Patel paid full restitution plus interest before he was sentenced on May 14, 2013.
3. Bharat Patel, 46, of Manhattan, the former supervising pharmacist of Family Care Pharmacy.Bharat Patel pleaded guilty to Petit Larceny on December 17, 2012. Justice Barrett sentenced Bharat Patel to a conditional discharge, 300 hours of community service and ordered him to pay full restitution. Patel paid $158,385.38.
4. Sanjay R. Patel, 47, of Edison, New Jersey, the former supervising pharmacist of Nayosha Pharmacy LLC.In December, Patel and a representative of Patel’s corporation Nayosha Pharmacy LLC pleaded guilty to Grand Larceny in the Second Degree. Patel was promised a sentence of six months home confinement followed by five years probation. Patel was also ordered to repay the state $1,342,472.61 in restitution, which included interest. He is scheduled to be sentenced on August 27, 2013.

The men were all arrested Nov. 15. Other than Bharat Patel and Sanjay K. Patel, who are brothers, the men are not related.

The Attorney General has referred these matters to the New York State Board of Pharmacy to initiate professional discipline proceedings to revoke the defendants’ licenses to practice pharmacy.The Attorney General has referred these defendants to the New York State Office of Medicaid Inspector General and the United States Department of Health and Human Services for exclusion from participation in any federally-funded health care programs, including the Medicaid and Medicare programs.

The investigation was conducted by Special Investigator Joseph Deserio, Special Auditor Investigator Olga Sunitsky and Principal Special Auditor Emmanuel Archer, who are supervised byDeputy Chief Investigator Thaddeus Fisher and Regional Chief Auditor Thomasina Smith.

The criminal case is being prosecuted by Special Assistant Attorney General Debra Glatt,under the supervision of Chief of Criminal Investigations Thomas O’Hanlon, Special Deputy Attorney General Monica Hickey-Martin and Executive Deputy Attorney General for Criminal Justice Kelly Donovan.