Attorney General James Announces Extradition From Pakistan and Indictment of Medicaid Fraud Ringleader

Mujahid “Peter” Pervez Arraigned on 2013 Enterprise Corruption Indictment,
Charging Theft of Over $16 Million by Paying Patients to Forgo Medicine,
and Billing Medicaid for Drugs Never Dispensed

NEW YORK – New York Attorney General Letitia James today announced the extradition, arrest, and arraignment of Mujahid “Peter” Pervez, 71, who was residing in Pakistan, on charges of Enterprise Corruption, Grand Larceny in the First Degree, and related crimes. Pervez — along with numerous co-conspirators, who all have since been convicted — was indicted, in 2013, for systematically defrauding New York’s Medicaid program of at least $16 million. During the investigation and before the 2013 indictment, Pervez fled to Pakistan where he remained until yesterday. After Pervez fled, the Office of the Attorney General’s (OAG) Medicaid Fraud Control Unit (MFCU) obtained an arrest warrant for Pervez — who is a U.S. citizen — and worked with the U.S. Department of State and the U.S. Department of Justice to secure Pervez’s extradition from Pakistan. Pakistani authorities subsequently arrested Pervez at the United States’ request and recently extradited him to New York.  

“The criminal enterprise that Peter Pervez is charged with heading put hundreds of vulnerable Medicaid recipients in danger, the majority of whom were HIV patients” said Attorney General James. “I previously vowed to use all the resources of my office to bring fraudsters to justice. Today, I am pleased to announce that the last remaining defendant of this group of rogue pharmacists and co-conspirators has been brought to New York state to answer for his alleged crimes. This case should put criminals on notice that my office will work to ensure that fugitives are brought back to face justice in New York, no matter where in the world they are.”

The 2013 indictment alleges that, between January 2009 and April 2012, Pervez led a criminal enterprise that stole over $16 million dollars from Medicaid and was structured to systematically victimize hundreds of Medicaid recipients, the majority of whom were HIV patients and who were paid to forgo their expensive medications.

The indictment charges, among other things, that Pervez directed Maria Kramer, the manager of Big Mart Pharmacy — a pharmacy controlled by Pervez at 2740 3^rd Avenue, Bronx, NY — to bill Medicaid for prescription medication that were not dispensed and to pay patients cash for their HIV prescriptions. Patients were routinely paid per prescription, receiving, for example, $100 dollars for a month’s supply of the HIV drug Atripla. Medicaid reimburses pharmacies over $1,000 dollars for providing a month’s supply of Atripla to an HIV patient. Pharmacies are required to maintain original prescriptions as proof that the pharmacy dispensed the medication to the patient. Kramer pled guilty to the crime of Enterprise Corruption, in October of 2013, and admitted that she, along with others, stole from Medicaid, falsified records, and paid Medicaid recipients to induce them to refrain from collecting their prescriptions for HIV medication. Kramer served over two years in state prison.

Pervez allegedly used his son, Raheel Pervez, as a proxy to gain control and actual ownership of 11 pharmacies across New York City and Long Island, despite being barred from government health care programs after a 1991 Medicaid fraud conviction. Raheel Pervez was indicted, in 2012, as part of the same scheme and pled guilty to Enterprise Corruption (a class B felony), in 2014, and was sentenced to 1 to 3 years in state prison. In pleading guilty, Raheel Pervez admitted to falsifying many of the publicly filed paperwork required to operate his father’s pharmacies.

As alleged in the indictment, various physicians funneled prescriptions to pharmacies owned or controlled by Pervez, including physician assistant Richard Cedeno. In exchange for Pervez giving him free rent for his clinic, Cedeno referred his patients to Big Mart Pharmacy, which was located in the same building.

In addition to Big Mart Pharmacy, two other pharmacies were indicted as part of the scheme: Swami Naryan Pharmacy Inc., d/b/a Super Value Pharmacy, located at 3454 Boston Road, Bronx, NY and Dabup Inc. d/b/a Langdale Drug & Surgical Supplies, located at 27-103 80th Avenue, New Hyde Park, NY. All three pharmacies, at various times, were used by Pervez and are alleged to have been used as hubs to centralize operation of his criminal enterprise.

Subsequent to Pervez’s flight to Pakistan, Cedeno, as well as all three pharmacies, were each convicted of various crimes. Cedeno admitted to his kickback relationship with the enterprise and — as part of his sentence — his license to work a physician assistant was revoked by the New York State Education Department, Office of Professional Discipline.

The 20-count indictment charges Pervez with one count of Enterprise Corruption (a class B felony), one count of Grand Larceny in the First Degree (a class B felony), three counts of Falsifying Business Records in the First Degree (a class E felony), 11 counts of Offering a False Instrument for Filing in the First Degree (a class E felony), one count of Conspiracy in the Fourth Degree (a class E felony), one count of Commercial Bribery in the First Degree (a class E felony), and two counts of Medical Assistance Provider Prohibited Practices, Kickbacks (a class E felony). Pervez faces 25 years in state prison if convicted on the top count of the indictment.

In addition to the individuals mentioned above, six other members of the Pervez criminal enterprise were arrested in 2012. All have since pled guilty and have all already been sentenced. Those with professional licenses lost those licenses. All were excluded as providers to the Medicaid program.

The charges filed against Pervez in this case are merely accusations, and he is presumed innocent unless and until proven guilty in a court of law.

The OAG wishes to thank the law enforcement and diplomatic professionals at the Federal Bureau of Investigation (FBI), as well as at the FBI's New York Field Office and the FBI's Office of the Legal Attaché in Islamabad; the U.S. Drug Enforcement Administration; the U.S. Department of State; the U.S. Department of Homeland Security; and the U.S. Department of Justice’s Office of International Affairs for their partnership, persistence, and invaluable efforts in securing Pervez’s extradition. The OAG also wishes to thank the government of Pakistan for honoring the international extradition request.

Reporting Medicaid Provider Fraud: MFCU defends the public by addressing Medicaid provider fraud and protecting nursing home residents from abuse and neglect. If an individual believes they have information about Medicaid provider fraud or about an incident of abuse or neglect of a nursing home resident, they can file a confidential complaint online on the OAG website or by calling the MFCU hotline at (800) 771-7755. If the situation is an emergency, they should call 911.

MFCU’s total funding for federal fiscal year (FY) 2021 is $53,413,761. Of that total, 75 percent — or $40,060,324 — is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent of the approved grant — totaling $13,353,437 for FY 2021 — is funded by New York state. Through its recoveries in law enforcement actions, MFCU regularly returns more to the state than it receives in state funding.

MFCU Detective Supervisor Ronald Lynch and Detective David Salambier conducted the arrest, under the supervision of Deputy Chief Detective Kenneth Morgan. The criminal case is being prosecuted by MFCU New York City Regional Director Christopher M. Shaw. A parallel civil case against Pervez and many of the co-defendants named above is being handled by Special Assistant Attorney General David Abrams with the assistance of MFCU Civil Enforcement Chief Alee Scott. Thomas O’Hanlon is the MFCU Chief of Criminal Investigations-Downstate. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney, and is a part of the Division for Criminal Justice. The Division for Criminal Justice is led by Chief Deputy Attorney General José Maldonado and is overseen by First Deputy Attorney General Jennifer Levy.