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Medical Doctor Sentenced in Manhattan Federal Court to 21 Months in Prison for Illegal Medicaid Kickback Scheme
PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that MUHAMMAD EJAZ AHMAD
was sentenced today to 21 months in prison and ordered to forfeit
over $1.7 million for his role in a scheme to pay illegal
kickbacks to Medicaid recipients. The sentence was imposed in
Manhattan federal court by United States District Judge JOHN G.
KOELTL, who also presided over AHMAD'S guilty plea proceeding on
May 22, 2008.
According to documents filed in this case and
statements made during court proceedings:
MUHAMMAD EJAZ AHMAD was a physician, with an office in
Brooklyn, who specialized in infectious diseases—including the
treatment of HIV-positive patients. From January 2004 to August
29, 2006, EJAZ AHMAD attracted HIV-positive Medicaid recipients
by paying an illegal kickback of $40 to patients at every visit,
even though New York State only paid him $30. The defendant then
referred these patients to one of three pharmacies that he owned
and controlled through his wife: Staywell Pharmacy doing business
as Nash Pharmacy located in Bayside, New York; Stay Slim Pharmacy
in Brooklyn, New York; and ASA Drugs doing business as Script
Depot, in Rego Park, New York. Each of these pharmacies was also
affiliated with one of his co-conspirators—either his brother,
MUHAMMAD NAWAZ AHMAD, or brother-in-law, MOHAMMAD TANVEER. Like
EJAZ AHMAD, NAWAZ AHMAD and TANVEER also paid $40 kickbacks to
the Medicaid patients in order to retain the patients' business.
Between January 2002 and September 2006, the New York
State Medicaid program paid the pharmacies at least $2.5 million
for services purportedly provided to patients to whom the
defendant and his co-conspirators had paid illegal kickbacks.
Most of these billings were for medications that were never
ordered from legitimate wholesalers. Instead, the pharmacies provided these Medicaid patients with lower-priced, diverted, and
black-market medications or, in some cases, billed Medicaid for
drugs that were never dispensed. For example, in 2005 alone, the
pharmacies billed Medicaid over $1 million in excess of what the
pharmacies had ordered from their legitimate wholesale drug
distributors for three costly medications. The excess profits
obtained from the Medicaid program paid for the kickbacks to
patients.
Judge KOELTL ordered MUHAMMAD EJAZ AHMAD, 52, of
Albertson, New York, to pay $1,783,020.06—the amount held in
his pharmacies' bank accounts at the time of his arrest—to the
Medicaid program in restitution. The monies held in the bank
accounts had been forfeited in a parallel civil action.
MUHAMMAD NAWAZ AHMAD, 41, of Floral Park, New York,
pleaded guilty on May 22, 2008, to conspiring to pay illegal
kickbacks to Medicaid recipients, and was sentenced by Judge
KOELTL to 18 months in prison on December 14, 2008.
MOHAMMAD TANVEER, 52, of Floral Park, New York, pleaded
guilty on June 10, 2008 before Judge KOELTL. His sentencing is
scheduled for September 25, 2009, at 4:00 p.m.
United States Attorney BHARARA thanked the Federal
Bureau of Investigation for its work in the investigation and
prosecution of this case, as well as the Office of the Medicaid
Inspector General and the City of New York Human Resources
Administration Bureau of Fraud Investigation.
Assistant United States Attorneys WILLIAM J. HARRINGTON
and ANNA E. ARREOLA are in charge of the prosecution.
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