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Post date: January 23 2013

A.G. Schneiderman Announces Over $335 Million In Medicaid Fraud Recoveries For Taxpayers In 2012 - New York City

Top Cases In NYC Include Busting Prescription Drug Fraud And Rooting Out Drug Trafficking

Banner Year Follows Schneiderman Initiative To Bolster Fraud Fighting Efforts On Behalf Of Taxpayers

Schneiderman: We Will Continue To Root Out Fraud And Abuse Wherever They Exist To Protect Taxpayers


NEW YORK – Attorney General Eric T. Schneiderman today announced that his office recovered over $335 million in 2012 that had been improperly claimed through fraud or abuse in the Medicaid system. This was the second highest annual recovery total ever by the Attorney General’s Medicaid Fraud Control Unit (MFCU), the highest recovery in seven years.

“Part of my first major initiativewhen I took office was to bolster the Medicaid Fraud Control Unit with additional prosecutors, investigators, and auditors, in order to even more aggressively root out fraud and return money illegally stolen from New York taxpayers and their government,” Attorney General Schneiderman said. “That initiative has paid off with record recoveries for taxpayers this year, including in New York City. My office’s Medicaid Fraud team will keep working hard to root out fraud wherever it exists, and protect the integrity of the Medicaid program for those who truly need it.”

Attorney General Schneiderman’s Medicaid Fraud Control Unit successfully pursued and prosecuted several important cases in the New York City area, some of which include:

  • Prosecuting Bronx resident Suzanne Benizio for heading an illegal prescription drug operation that forged more than 250 prescriptions for narcotics, including addictive painkillers. The arrest highlighted the direness of New York’s prescription drug crisis as well as the significance of the Attorney General’s legislation to create a real-time I-STOP database to track prescriptions statewide.
  • Obtaining guilty pleas from four pharmacists and a pharmacy owner who bilked the state’s Medicaid program of $9.9 million by submitting bills for drugs that they never dispensed to their patients.
  • Returning funds stolen from New York taxpayers in a $1.2 million settlement with a Brooklyn pharmacist who defrauded Medicaid by improperly billing for prescription medications he purchased from suppliers’ cars and dispensed to patients.
  • Convicting Seibert Phillips, the former CEO of the Evelyn Douglin Center for Serving People in Need, for stealing over $600,000 from the charity. Evelyn Douglin Center is a Medicaid-funded nonprofit that provides care and services to mentally disabled New York City residents.

MFCU shut down schemes to illegally obtain prescription drugs through Medicaid and distribute them on the street for profit. The head of one prescription drug ring in the Bronx and another on Staten Island received prison sentences. MFCU also targeted providers that billed for unnecessary services or unnecessary visits to perform services that could have been rendered in a single visit; providers that referred patients to unlicensed facilities in exchange for kickbacks; unlicensed healthcare workers; and black market drug sellers that diverted prescription medications of unknown origin, re-packaging and re-selling them to pharmacies.

And in 2012, MFCU continued to vigilantly pursue major pharmaceutical manufacturers that engaged in unethical marketing practices. Abbott Laboratories, Boehringer-Ingelheim, Dava Pharmaceuticals, Inc., GlaxoSmithKline, K-V Pharmaceutical Company, McKesson Corporation, and Merck Sharp & Dohme Corp, among others, paid over $250 million to settle cases where they marketed their drugs to physicians for treating conditions that the Food and Drug Administration had not approved or for marketing and illegal pricing practices.  Some of those companies took criminal pleas in federal court for this conduct.

“The Medicaid Fraud Control Unit does an outstanding job, not only protecting taxpayers, but protecting patients from fraudulent practices that endangered their safety,” Attorney General Schneiderman said. “I know this unit will continue to be vigilant in the coming year and send the message that fraud and abuse that endangers patients and rips off taxpayers will not be tolerated in our state.”

MFCU’s New York City office is headed by Special Assistant Attorneys General Thomas O’Hanlon and Christopher Shaw. The NYC Patient Protection Unit is headed by Special Assistant Attorney General Cassandra Bethel.

The Medicaid Fraud Control Unit operates under the supervision of Special Deputy Attorney General Monica Hickey-Martin, within the Criminal Justice Division led by Executive Deputy Attorney General Kelly Donovan.

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