Attorney General James Announces Arrest Of Two Physicians On Charges Of Health Care Fraud At Opioid Mill  

Attorney General James Announces Arrest of Two Physicians on Charges of Health Care Fraud at Opioid Mill  

Physicians Allegedly Wrote Suboxone Prescriptions Without Medical Necessity to Lure Patients to Clinic and to Bill Medicaid for Unnecessary Services   

NEW YORK-- Attorney General Letitia James today announced the arrest and arraignment of Ilya Smuglin, M.D., 50, of Rego Park, New York and Clarisse Clemons, M.D., 63, of Rockville Centre, New York for allegedly conspiring to operate an opioid mill and fraudulently billing Medicaid. Smuglin and Clemons are charged with Criminal Sale of a Prescription for a Controlled Substance or of a Controlled Substance by a Practitioner or Pharmacist, Health Care Fraud in the First Degree, and Conspiracy in the Fourth Degree.     

“We will not tolerate attempts to fraudulently use the Medicaid program to take advantage of those suffering from addiction,” said Attorney General Letitia James. “New York is experiencing a serious opioid epidemic, and doctors that prescribe narcotics without proper screening procedures only deepen this crisis. We will continue to take on this crisis from every angle and that includes prosecuting doctors who abuse their duties and our trust.”   

The Attorney General’s Medicaid Fraud Control Unit (“MFCU”) filed papers alleging that Smuglin, Clemons, and other staff of the Miromedical P.C. and Ferrara Medical Care, P.C. clinics, conspired to create, enable, and foster an environment that encouraged and resulted in the excessive prescribing and sale of prescriptions for Suboxone. The prescribing and sale of prescriptions for Suboxone, a narcotic drug used to treat pain and opioid addiction, resulted in an influx of patients who were the means for the defendants and others to file and cause to be filed false Medicaid claims. These clinics, located at 903 Sheridan Avenue in the Bronx, and at 2738 Frederick Douglass Boulevard in Manhattan, operated as unauthorized, uncertified providers of substance abuse treatment services.   

State law mandates that substance abuse treatment programs be certified by the Office of Alcohol and Substance Abuse Treatment Services in order to treat those suffering from addiction. State and Federal Law further regulates how such treatment is to be conducted in order to heighten the chances of a successful recovery. 

"Anyone who takes advantage of vulnerable New Yorkers for their own benefit must be prosecuted to the fullest extent of the law,” said Department of Social Service Commissioner Steven Banks. “The conduct alleged in this case demonstrates a clear and unconscionable intent to defraud our social safety net as well as an absolute disregard for human dignity – and those who commit such crimes must be held accountable. We remain committed to collaborating with the Attorney General’s Office whenever necessary to prevent, identify, and report suspected fraud and abuse that amount to theft of public benefits.” 

The Attorney General’s office alleges that the physicians and their co-conspirators participated in a scheme to lure Medicaid patients to the clinics by paying kickbacks and offering prescriptions for Suboxone, an opioid that has potential for abuse. Once recruited, prosecutors allege that patients encountered the façade of a substance abuse treatment program. Appropriate and necessary medical histories were not always obtained, physicals and urine toxicology were not regularly performed, and patients were consistently provided with prescriptions for Suboxone at the maximum dose, without any effort to taper or wean the patient off the narcotic in violation of applicable treatment guidelines.   

As part of this scheme, prosecutors allege that Smuglin and Clemons regularly gave pre-signed and otherwise blank prescription pads to medical and non-medical staff within the clinics, which enabled them to hand out prescriptions, including ones for controlled substances, to patients without medical need. Once the Suboxone prescriptions were obtained, prosecutors allege that patients were regularly offered money from drug dealers inside and outside of the clinic, often in plain view of physicians and employees.   

Prosecutors further allege that relying on the accuracy of claims submitted for these Suboxone prescriptions, Medicaid and MetroPlus, a Medicaid managed care organization, paid pharmacies filling the prescriptions over $3 million in 2015 and over $2 million in 2016.   

Defendants Smuglin and Clemons were arraigned in New York City Criminal Court in Bronx County before Judge Wanda Licitra on Friday, May 3, 2019. The Defendants were ordered to surrender their passports and were released on their own recognizance. The case was adjourned to June 12, 2019. If convicted on the top charge, each defendant faces a maximum penalty of eight and a third to twenty-five years in state prison.      

The charges filed in this case are accusations. The defendants are presumed innocent until proven guilty in a court of law. 

These arrests are the latest example of Attorney General James’ commitment to tackling the opioid crisis from every angle. In March 2019, Attorney General James filed the nation’s most extensive lawsuit against the manufacturers and distributors of opioids and over the past two weeks, the Attorney General’s office has taken down two major drug trafficking rings responsible for flooding our communities with these dangerous drugs. 

The Attorney General thanks the U.S. Department of Health and Human Services, Office of the Inspector General, and the New York City Human Resources Administration (“HRA”) for their valuable assistance throughout the investigation. In addition, the Attorney General thanks the New York State Department of Health, Bureau of Narcotic Enforcement, the New York State Office of Alcoholism and Substance Abuse Services, and the New York State Office of the Medicaid Inspector General.    

The investigation was led by Senior Investigators Albert Maiorano and David Ryan with the assistance of Supervising Investigator Michael Casado under the supervision of Deputy Chief Investigator Kenneth Morgan. Audit support was provided by Principal Auditor Investigator Patricia Iemma and Auditor Investigator Jillian White under the supervision of MFCU NYC Chief Auditor Thomasina Smith. Investigative support was provided by Confidential Legal Analyst Victoria Sepe and MFCU’s Data Analytics team, under the supervision of Director of Electronic Investigative Support Group & Data Analytics Mike Wassell.   

The criminal case is being prosecuted by MFCU NYC Deputy Regional Director Erin Kelsh and Senior Counsel David Arias with the assistance of MFCU NYC Regional Director Christopher M. Shaw. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations-Downstate. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Criminal Justice Division is led by Chief Deputy Attorney General José Maldonado.    

New Yorkers can report suspected fraud to the Attorney General’s toll-free Medicaid Fraud Hotline, at (800) 771-7755 or online at ag.ny.gov/medicaid-fraud/contact.

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