Black-Market Medication Wholesaler, Pharmacy Owner, And Three Other Defendants Charged In $15 Million HIV Medication Fraud Scheme

Press Release Black-Market Medication Wholesaler, Pharmacy Owner, And Three Other Defendants Charged In $15 Million HIV Medication Fraud Scheme Thursday, March 2, 2023 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that BORIS AMINOV, CHRISTY CORVALAN, DAVID FERNANDEZ, DEZYRE BAEZ, and CRYSTAL MEDINA were charged with engaging in a years-long scheme to defraud Medicaid and other government insurance plans out of at least approximately $15 million and exploit at least hundreds of low-income individuals with HIV. The defendants were arrested this morning and are being presented today in Manhattan federal court before United States Magistrate Judge Gabriel W. Gorenstein. The case has been assigned to United States District Judge Mary Kay Vyskocil. U.S. Attorney Damian Williams said: “As alleged, the defendants orchestrated a scheme to get rich by lying to Medicaid and other government insurance programs and depriving vulnerable HIV patients of legitimate and safe medications. The defendants allegedly made millions of dollars through submitting fraudulent insurance claims, paying illegal kickbacks, and buying and selling black-market HIV medications. Today’s arrests send a crystal-clear message to those that seek to line their pockets by lying to federal agencies tasked with providing healthcare for low-income individuals and preying on vulnerable members of society – you will not get away with it.” FBI Assistant Director Michael J. Driscoll said: “The indictment today alleges the defendants operated a scheme designed not only to defraud Medicaid and other government insurance plans, but also take advantage of vulnerable low-income patients with HIV. This type of criminal activity abuses taxpayer funded healthcare programs and puts those who need help at further risk. The FBI will always do whatever is necessary to ensure the integrity of healthcare programs like Medicaid and hold those willing to exploit these programs accountable.” According to the allegations contained in the Indictment:[1] From at least in or about July 2020 through at least in or about February 2023, AMINOV, CORVALAN, FERNANDEZ, BAEZ, and MEDINA operated a scheme that defrauded Medicaid and other government insurance plans out of at least approximately $15 million and exploited at least hundreds of low-income individuals with HIV, jeopardizing the health and safety of those vulnerable patients. AMINOV was a distributor of black-market HIV medications to two pharmacies located in the Bronx, New York (the “Pharmacies”), through which the scheme was perpetrated. CORVALAN owned and operated the Pharmacies. She purchased black-market medications from AMINOV that were then dispensed to patients, funded illegal kickbacks to be paid to patients, and additionally paid patients to sell back their HIV medications to the Pharmacies, thereby inducing patients to forego using the medications they were prescribed to treat their HIV infections. FERNANDEZ, BAEZ, and MEDINA were employees of the Pharmacies who participated in the day-to-day operation of the scheme, including by paying illegal kickbacks to patients to obtain their HIV medications from the Pharmacies and buying-back medications from the patients. The scheme had two sets of victims: government insurance programs and the patients of the Pharmacies. First, Medicaid and other government insurance programs were defrauded out of at least approximately $15 million of payments that they made to the Pharmacies to purchase prescription HIV medications for patients through legitimate channels. CORVALAN, FERNANDEZ, BAEZ, and MEDINA, however, instead purchased HIV medications from black-market sources, including AMINOV. Over the duration of the scheme, CORVALAN, FERNANDEZ, BAEZ, and MEDINA used the Pharmacies to pay more than $6 million to purchase black-market HIV medications from AMINOV, which were then distributed to patients. Second, the scheme exploited low-income HIV patients of the Pharmacies and, in the process, put those vulnerable patients’ health and safety at risk by both paying patients kickbacks to fill their medications at the pharmacies, albeit with black-market drugs, and by encouraging patients to sell back their medications instead of taking them as they were prescribed to control their HIV infections. The defendants spent the proceeds of the scheme to purchase luxury cars, including a 2021 Mercedes-Benz Maybach with an estimated fair market value of approximately $245,000, millions of dollars in waterfront real-estate, designer clothes, and jewelry. * * * AMINOV, 47, of Brooklyn, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison. CORVALAN, 41, of the Bronx, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the anti-kickback statute, which carries a maximum potential sentence of five years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. FERNANDEZ, 24, BAEZ, 22, and MEDINA, 27, all of the Bronx, New York, are charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the anti-kickback statute, which carries a maximum potential sentence of five years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Mr. Williams praised the outstanding investigative work of the FBI. This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jeffrey W. Coyle is in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described herein should be treated as an allegation. Contact Nicholas Biase (212) 637-2600 Updated March 2, 2023 Topics Financial Fraud Healthcare Fraud Component USAO - New York, Southern Press Release Number: 23-085

Press Release Black-Market Medication Wholesaler, Pharmacy Owner, And Three Other Defendants Charged In $15 Million HIV Medication Fraud Scheme Thursday, March 2, 2023 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, and Michael J. Driscoll, the Assistant Director in Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today that BORIS AMINOV, CHRISTY CORVALAN, DAVID FERNANDEZ, DEZYRE BAEZ, and CRYSTAL MEDINA were charged with engaging in a years-long scheme to defraud Medicaid and other government insurance plans out of at least approximately $15 million and exploit at least hundreds of low-income individuals with HIV. The defendants were arrested this morning and are being presented today in Manhattan federal court before United States Magistrate Judge Gabriel W. Gorenstein. The case has been assigned to United States District Judge Mary Kay Vyskocil. U.S. Attorney Damian Williams said: “As alleged, the defendants orchestrated a scheme to get rich by lying to Medicaid and other government insurance programs and depriving vulnerable HIV patients of legitimate and safe medications. The defendants allegedly made millions of dollars through submitting fraudulent insurance claims, paying illegal kickbacks, and buying and selling black-market HIV medications. Today’s arrests send a crystal-clear message to those that seek to line their pockets by lying to federal agencies tasked with providing healthcare for low-income individuals and preying on vulnerable members of society – you will not get away with it.” FBI Assistant Director Michael J. Driscoll said: “The indictment today alleges the defendants operated a scheme designed not only to defraud Medicaid and other government insurance plans, but also take advantage of vulnerable low-income patients with HIV. This type of criminal activity abuses taxpayer funded healthcare programs and puts those who need help at further risk. The FBI will always do whatever is necessary to ensure the integrity of healthcare programs like Medicaid and hold those willing to exploit these programs accountable.” According to the allegations contained in the Indictment:[1] From at least in or about July 2020 through at least in or about February 2023, AMINOV, CORVALAN, FERNANDEZ, BAEZ, and MEDINA operated a scheme that defrauded Medicaid and other government insurance plans out of at least approximately $15 million and exploited at least hundreds of low-income individuals with HIV, jeopardizing the health and safety of those vulnerable patients. AMINOV was a distributor of black-market HIV medications to two pharmacies located in the Bronx, New York (the “Pharmacies”), through which the scheme was perpetrated. CORVALAN owned and operated the Pharmacies. She purchased black-market medications from AMINOV that were then dispensed to patients, funded illegal kickbacks to be paid to patients, and additionally paid patients to sell back their HIV medications to the Pharmacies, thereby inducing patients to forego using the medications they were prescribed to treat their HIV infections. FERNANDEZ, BAEZ, and MEDINA were employees of the Pharmacies who participated in the day-to-day operation of the scheme, including by paying illegal kickbacks to patients to obtain their HIV medications from the Pharmacies and buying-back medications from the patients. The scheme had two sets of victims: government insurance programs and the patients of the Pharmacies. First, Medicaid and other government insurance programs were defrauded out of at least approximately $15 million of payments that they made to the Pharmacies to purchase prescription HIV medications for patients through legitimate channels. CORVALAN, FERNANDEZ, BAEZ, and MEDINA, however, instead purchased HIV medications from black-market sources, including AMINOV. Over the duration of the scheme, CORVALAN, FERNANDEZ, BAEZ, and MEDINA used the Pharmacies to pay more than $6 million to purchase black-market HIV medications from AMINOV, which were then distributed to patients. Second, the scheme exploited low-income HIV patients of the Pharmacies and, in the process, put those vulnerable patients’ health and safety at risk by both paying patients kickbacks to fill their medications at the pharmacies, albeit with black-market drugs, and by encouraging patients to sell back their medications instead of taking them as they were prescribed to control their HIV infections. The defendants spent the proceeds of the scheme to purchase luxury cars, including a 2021 Mercedes-Benz Maybach with an estimated fair market value of approximately $245,000, millions of dollars in waterfront real-estate, designer clothes, and jewelry. * * * AMINOV, 47, of Brooklyn, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; and one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison. CORVALAN, 41, of the Bronx, New York, is charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the anti-kickback statute, which carries a maximum potential sentence of five years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. FERNANDEZ, 24, BAEZ, 22, and MEDINA, 27, all of the Bronx, New York, are charged with one count of conspiracy to commit wire fraud and health care fraud, which carries a maximum potential sentence of 20 years in prison; one count of conspiracy to violate the anti-kickback statute, which carries a maximum potential sentence of five years in prison; and aggravated identity theft, which carries a mandatory consecutive sentence of two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Mr. Williams praised the outstanding investigative work of the FBI. This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorney Jeffrey W. Coyle is in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described herein should be treated as an allegation. Contact Nicholas Biase (212) 637-2600 Updated March 2, 2023 Topics Financial Fraud Healthcare Fraud Component USAO - New York, Southern Press Release Number: 23-085