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Post date: February 10 2000

Grand Jury Charges Manhattan Pharmacy Owner With $1 Million "phantom Drug" Medicaid Scam

Attorney General Spitzer today announced the indictment of a Manhattan pharmacy owner for stealing more than $1 million from the Medicaid program by fraudulently billing for thousands of expensive prescriptions that were never dispensed to patients - or even in stock.

Halmor Trading Corp., which did business as Kips Bay Super Drugs in midtown Manhattan before it closed in 1996, and its owner, Rami Waisman, were each charged in a 21-count indictment with 1 count of Grand Larceny in the First Degree and 20 counts of Offering a False Instrument for Filing in the First Degree. If convicted, Waisman faces up to 25 years in prison. In the case of a corporation, each felony is punishable by a fine of up to $10,000 or double the amount of the illegal gain.

"For ten years, the defendant's pharmacy did very little Medicaid business," said Spitzer. "Then suddenly, in 1995, the company's billings dramatically jumped to over $300,000 before skyrocketing to nearly $1 million in 1996, its last year of operation. In fact, the vast majority of its claims for dozens of costly brand name drugs, including AIDS medication, were bogus."

According to the indictment, from January 1, 1995, to November 14, 1996, Halmor Trading Corp., acting through its owner Waisman, stole more than $1 million from taxpayers by fraudulently submitting thousands of reimbursement claims for expensive medications given to Medicaid recipients when, in fact, the drugs were never dispensed.

Among the drugs improperly billed for were Diflucan, Mevacor, Prozac, Xanax, Buspar, Paxil, Zoloft, Augmentin, and Procardia.

Waisman, 52, of 69 Stepney Street on Staten Island, owned Halmor Trading Corp., which formerly did business as Kips Bay Super Drugs at 363 Third Avenue in Manhattan. Medicaid billings to the corporation totaled $327,442 in 1995 and $975,349 in 1996.

The case is being prosecuted by Special Assistant Attorney General Robert J. Goldstein, of the New York City Regional Office of Attorney General Spitzer's Medicaid Fraud Control Unit. All cases are handled under the direct supervision of Deputy Attorney General Jose Maldonado.