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Two men indicted for running $3M Medicaid scam out of Corona pharmacy: AG

Jul. 11, 2023 By Bill Parry

A Queens grand jury indicted the owner and the manager of a Corona pharmacy for their roles in a multi-million dollar drug diversion and kickback scheme involving HIV drugs, Attorney General Letitia James announced on July 7.

Juan Poveda, 32, of Nassau County, the owner of Santiago Pharmacy, and his manager Javier Burbano, 32, of Queens, were arrested and arraigned before Queens Supreme Court Justice Michelle Johnson on charges of grand larceny and health care fraud and for violating the New York Social Services Law.

The AG’s Medicaid Fraud Control Unit (MFCU) outlined a scheme in which Poveda and Burbano allegedly paid or directed others to pay cash kickbacks to Medicaid recipients to encourage them to fill their HIV prescriptions at Santiago Pharmacy. Santiago Pharmacy, located at 40-43 Junction Blvd., then billed Medicaid and received millions of dollars for those prescriptions. State law prohibits all medical providers, including pharmacies, from paying or offering to pay anyone for the referral of medical services paid for by Medicaid.

Court papers allege that Poveda and Burbano stole more than $2.9 million dollars from Amida Care, a Medicaid-funded managed care organization, by billing for drugs, including the expensive HIV retroviral medication Biktarvy, that were either not legally obtained or that never existed. Poveda then allegedly attempted to hide the fraudulently obtained funds by funneling criminal proceeds from Santiago Pharmacy accounts to pass-through bank accounts without any apparent business operations, including B&H Health Distributors Inc. and Pobal Cargo, LLC.

“We trust pharmacies to attend to the needs and welfare of their patients, not to take advantage of our most vulnerable neighbors to line their own pockets,” James said. “People living with HIV are able to live full and healthy lives by taking wholesome medications as prescribed by their doctors.”

The grand larceny and money laundering charges are both class B felonies and carry a maximum sentence of 25 years in prison. Health care fraud is a class C felony and carries a maximum of 15 years in prison, according to the AG’s office.

“Scams like the one alleged in this indictment cheat New Yorkers out of their health,” James said. “Stealing from Medicaid is a reprehensible crime, and New Yorkers can count on my office to hold these bad actors accountable.”

She added that search warrants have also been executed at the Mi Botica Pharmacy in Flushing and at the Corona Chemist Pharmacy in Corona and as part of an ongoing healthcare fraud investigation.

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