• Huntington Pharmacy’s Money Laundering Links to the Russian Mafia – UPDATE


    by Winston Chua

    SAN MARINO – The San Marino Police Department, spearheading an investigation called Operation “Pysched Out” is reporting that at least 16 people have been arrested, including the owners of the Huntington Pharmacy in San Marino and a Glendale medical clinic in a Medicare and Medical scheme to defraud the government of roughly $18 million. A total of five pharmacies are involved and as many as 20 warrants have been issued.

    The Department of Justice, the FBI, the IRS, the United States Marshals Service, the California Pharmacy Board, the Los Angeles County Sheriff’s Department, HALT Team and the Drug Enforcement Administration are all involved in the case that revolves around the illicit circulation and sales of antipsychotic medications like Abilify, Seroquel and Zyprexa. San Marino Police Department’s Sergeant Jay Wilburn has said that the Russian mafia is involved and that the investigation began in September of 2009.

    Two of the arrest warrants the SMPD assisted in serving were for Mr. P.K. Lim, 42, of Pasadena and his wife Mrs. T.S. Khou, 39.

    A federal criminal complaint unsealed this morning charges 17 defendants and alleges a scheme in which people associated with Manor Medical Imaging Clinic and pharmacies in and around the San Gabriel Valley participated in a “prescription harvesting” scheme that defrauded Medicare and Medi-Cal, causing at least $7.3 million in actual losses to the government health care programs. Fifteen of the 17 federal defendants were arrested this morning, and authorities arrested an additional defendant charged by the California Attorney General’s Office, for a total of 16 arrests today. One federal defendant was arrested earlier this month in relation to another Medicare fraud case, one person named in the federal case remains a fugitive.

    The affidavit in support of the criminal complaint alleges that Manor used “cappers” to recruit Medicare and Medi-Cal beneficiaries – including veterans, the homeless, low-income patients and the elderly.

    All 17 defendants named in the federal criminal complaint are charged with conspiracy to commit health care fraud, a charge that carries a statutory maximum penalty of 30 years in federal prison. The 15 federal defendants arrested this morning are expected to make their initial appearances this afternoon in United States District Court in Los Angeles.

    Medicare and Medical recipients with legitimate pharmaceutical prescriptions who receive such drugs at little or no cost resold drugs to middle men for a small amount, perhaps $100, and were likely taken advantage of, before these middle men turned around and sold the same antipsychotics to the highest bidder. Monthly prescriptions for some of these medications can cost in the thousands of dollars.

    The investigation appears to be centered in Glendale, but several news outlets came onto the scene on Huntington Drive to learn that Huntington Pharmacy was the largest distributor in a plot to re-bill the government many times over for fake prescriptions.

    San Marino police officers on multiple occasions since 2009 observed car loads of subjects from out of town making prescription purchases at the pharmacy. Suspicious activity was then monitored and authorities learned that the individuals with the drugs would distribute these drugs through their own criminal network sold in the black market.

    Dr. Peter Budetti, Deputy Administrator for Program Integrity, Centers for Medicare and Medicaid Services (CMS), stated: “Today’s arrests further signal CMS’ commitment to preventing fraud in Medicare and Medicaid. In this situation, our beneficiaries played a pivotal role in rooting out fraud, reporting their suspicions to their Medicare Prescription Drug plan. Beginning in 2007, CMS’ anti-fraud units opened investigations and made referrals to law enforcement. Since then, CMS has actively supported the investigation by our law enforcement partners and will continue to work with them to minimize the theft of taxpayer dollars while maximizing criminal consequences to thieves.”

    Wilburn said the SMPD has known about this for “some time” now and recommends that patients head to other pharmacies for service.

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