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Comptroller DiNapoli and A.G. Schneiderman Announce Criminal Charges and Civil Lawsuit Against Pharmacy Owner for Allegedly Defrauding Medicaid

Arkady Goldin, Owner of Value Pharmacy, Inc. in Lynbrook Allegedly Paid Kickbacks and Billed Medicaid for Cancer Medications Never Dispensed

Comptroller and AG Seek Over $8.7 million in Damages plus Penalties from
Owners of Value Pharmacy

Comptroller Thomas P. DiNapoli and Attorney General Eric T. Schneiderman announced the arrest and indictment of, as well as a civil asset forfeiture action against, Arkady Goldin, 39, of Brooklyn, and Value Pharmacy, Inc. ("Value"), located at 257 Broadway in Lynbrook, New York, for allegedly defrauding the New York State Medicaid program out of millions of dollars. Goldin, an owner of Value, is charged with Grand Larceny in the First Degree and other crimes for having allegedly paid kickbacks to a hospital employee for the referral of prescriptions for costly cancer medications. Additionally, the Attorney General and Comptroller allege that Value billed Medicaid for over a million dollars of prescription medication it did not have in stock to dispense.

The Attorney General’s Medicaid Fraud Control Unit working with the Comptroller’s office also filed an asset forfeiture and civil recovery action against Goldin, Value, and Goldin’s co-owners seeking over $8.7 million in damages and penalties, alleging that Value’s owners made millions from these schemes that they funneled through shell companies to purchase personal expenses such as travel, luxury cars, and a high-end country club membership.

"Goldin and his accomplices allegedly capitalized off the treatment of others' suffering to steal millions," Comptroller DiNapoli said. "Through kickbacks and sham billing, Goldin and his partners diverted millions meant to provide treatment to those in need to fund their lifestyles and real estate investments. Attorney General Schneiderman and I will continue to root out public fraud and protect taxpayer funds."

"We allege that the defendant engaged in an elaborate kickback scheme to line his pockets by defrauding Medicaid and pretending to dispense cancer medication he never did. Medicaid is meant to be a healthcare safety net for New Yorkers – not a bank account for criminals," said Attorney General Schneiderman. "My office will continue to fight for the integrity of the Medicaid program to ensure that our tax dollars are not wasted --- and instead put towards helping our most vulnerable citizens, as intended."

During the course of this scheme, which dates back to at least 2012, Goldin allegedly paid thousands of dollars in kickbacks and other benefits to a former hospital employee. As a result of this illegal kickback scheme, the Attorney General alleges that Goldin, through Value, submitted at least $700,000 in false claims for reimbursement to Medicaid. Medicaid prohibits all providers, including pharmacies, from securing services or patients through the payment of kickbacks. Prosecutors additionally allege that Goldin submitted over $1.2 million dollars in claims to Medicaid certifying that Value had dispensed Neupogen, a high-dollar cancer treatment medication, to patients when Value never possessed sufficient quantities of Neupogen to support the claims it submitted.

Queens Country Supreme Court Justice Peter F. Vallone, Jr. unsealed an indictment against Goldin and Value and arraigned Goldin on six counts charging him with Grand Larceny in the First Degree, Grand Larceny in the Second Degree, Health Care Fraud in the Second Degree, and a violation of Social Services Law prohibiting the payment of kickbacks related to the provision of services under the State’s Medicaid program. Justice Vallone also arraigned Goldin on two counts of Offering a False Instrument for Filing in the First Degree. Value, the corporation, will be arraigned at a later date.

Grand Larceny in the First Degree is a Class B felony with a maximum term of incarceration of twenty-five years in state prison. Grand Larceny in the Second Degree and Health Care Fraud in the Second Degree are each Class C felonies with a maximum term of incarceration of fifteen years. Offering a False Instrument for Filing in the First Degree and Social Services Law §366(d) and §366(f) are each Class E felonies with a maximum term of incarceration of four years. If convicted on all charges, the defendant faces up to 25 years in state prison.

In connection with the arrest, the Attorney General’s Medicaid Fraud Control Unit, working with the Comptroller’s Division of Investigations also filed an asset forfeiture and civil recovery action against Goldin, Value, and other defendants, including Value’s two other owners, Arik Yershov and Barry Beshkin, seeking over $8.7 million in damages plus penalties. Court papers unsealed today alleged that Value’s owners made millions from the schemes described above and funneled the proceeds through shell companies through which they paid for personal expenses, including travel, luxury car payments, and a high-end country club membership. Value’s owners also allegedly pooled more than $2.3 million of proceeds to invest in a potentially lucrative real estate opportunity — a newly constructed condominium building in Brooklyn with units listed for as much as $1.75 million. As part of the civil action, the Attorney General obtained an order freezing the bank accounts and other property held by the defendants and related entities and individuals, as well as attaching up to $4,530,000 of those assets to preserve money wrongfully obtained from Medicaid.

The Comptroller and the Attorney General would like to thank the Office of New York State Medicaid Inspector General, a partner in combatting fraud against the Medicaid program, for its assistance.

Since 2011, Comptroller DiNapoli and Attorney General Schneiderman have worked together to fight corruption through their Joint Task Force on Public Integrity. They have brought charges against dozens of individuals implicated in public corruption schemes around the state – resulting in the return of over $11 million in restitution to taxpayers through these convictions.

The Comptroller’s investigation was led by his Division of Investigations working with his Division of State Government Accountability.

The Attorney General’s investigation was led by MFCU Investigators Joseph Mendez and Daniel McCarron, with the support of Supervising Investigators Victor Maldonado, Dominick DiGennaro and Ronald Lynch, under the supervision of MFCU Deputy Chief Investigator Kenneth Morgan. The audit investigation was led by Auditor-Investigator Edgar Romero, with the support of Senior Auditor-Investigator Olga Sunitsky, under the supervision of MFCU NYC Regional Chief Auditor Thomasina Smith. Investigative support was provided by Supervising Legal Assistant Wendy Dorival and Confidential Legal Analysts Nicole Maher and Victoria Sepe.

The criminal case is being prosecuted by MFCU’s Special Assistant Attorneys General Megan Friedland and Michael Leigh with the assistance of NYC Deputy Regional Director Twan Bounds and Regional Director Christopher M. Shaw. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations–Downstate. The civil case is being handled by Special Assistant Attorneys General Elizabeth Kappakas and Diana Elkind with the assistance of MFCU Civil Enforcement Chief Carolyn Ellis. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Criminal Justice Division is led by Executive Deputy Attorney General Margaret Garnett.

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

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