Pharmacy Conspiracy Scheme Goes Awry

279
Stethoscope on 100 dollar bills symbolizing financial surveillance

A Marlboro, N.J., man took a non-traditional route to increase prescription sales for his family’s pharmacy chain, Prime Aid. Alex Fleyshmakher, 34, paid doctors and their staff to send patients with prescriptions their way. (That’s called a kickback or a bribe, both of which are illegal.) Then, he failed to report the additional illegal revenue he earned to the Internal Revenue Service (IRS). (That’s called tax fraud.)

The family pharmaceutical chain specialized in costly medication treatments for conditions like Hepatitis C, Crohn’s disease, and rheumatoid arthritis. (Isn’t it just like a fraudster to prey on vulnerable patients?) Fleyshmakher was an employee of Prime Aid’s Union City store location, which happened to be co-owned by his father Igor. The younger Fleyshmakher owned the Bronx location in New York. 

For approximately nine years, young Fleyshmakher and his father used their positions to bribe fellow doctors and other medical staff with pricey meals, designer handbags, cash, check payments and money wire transfers. Just the prescriptions processed at the Union City pharmacy from one New Jersey medical practice resulted in $24.8 million in Medicare and Medicaid payouts. (Definitely an extremely lucrative scam, but sometimes the bigger they are, the harder they fall.)

For approximately seven years, Fleyshmakher worked with others to take government insurance reimbursement checks worth millions of dollars from the family pharmacies. He either cashed the checks at a Brooklyn check cashing business or accessed the funds through Canadian bank accounts, then funneled the money back into U.S. bank accounts he owned and controlled. This is the part where he neglected to report the income on his personal income tax returns. (The IRS lost $9.1 million in revenue due to this man’s illegal actions.)

Fleyshmakher pleaded guilty to violating the federal anti-kickback statute and to defrauding the IRS. When sentenced, he could receive a maximum sentence of five years in federal prison and a $250,000 fine for each charge. (Not only that, but all locations of the family-owned Prime Aid have been shut down. (Looks like this family business is no more.)

Today’s Fraud of the Day comes from an article, “Marlboro man admits bribing doctors and defrauding IRS at family pharmacy, published by the Asbury Park Press on January 14, 2021.

A Marlboro man pleaded guilty on Thursday in federal court to paying kickbacks to doctors and their staff so they would send their patients to his family’s pharmacy and then concealed the activity from the IRS, Acting U.S. Attorney Rachael A. Honig announced.

Alex Fleyshmakher, 34, of the Morganville section, was charged in the U.S. District Court in Trenton with conspiring to violate the federal anti-kickback statute and conspiring to defraud the IRS of $9.1 million in federal taxes, according to a written statement from the U.S. Attorney’s Office.

 

SHARE
Previous articleSlowly but Surely
Next articleCOVID Feature: Slice of the Pie
Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.