Attorney General James Announces Sentencing of Former Owner of Over 20 New York City Pharmacies for Running $11 Million Medicaid Fraud Targeting Vulnerable HIV Patients

November 20, 2024

New York - New York Attorney General Letitia James today announced that former pharmacy owner Aftab Hussain has been sentenced to two to six years in prison for stealing over $11.5 million dollars through a Medicaid fraud scheme that preyed on low-income HIV patients who needed life-saving medications. Hussain and his associates paid illegal kickbacks to patients to ensure these patients would use over 20 pharmacies they owned across New York City and Westchester County, and then filled their prescriptions with unsafe medications illegally purchased from the black market or other pharmacy patients. Hussain and his associates billed Medicaid a total of over $11.5 million for these illegally obtained drugs over the course of their years-long scheme. Hussain was the last defendant to be sentenced in an investigation that included the arrest and conviction of five individual defendants along with two pharmacies located throughout New York City.

"This predatory scheme stole millions of dollars while denying lifesaving treatment to New Yorkers in need," said Attorney General James. "Aftab Hussain exploited and endangered vulnerable New Yorkers with HIV, using them to steal taxpayer funds that provide health care to low-income patients, and now he will pay for his fraud. This case should serve as a warning to any crooked pharmacy operator. My office will continue to bring these cases to shut down illegal businesses that put New Yorkers at risk with fraud and dangerous medications."

The sentencing of Hussain concludes an investigation and prosecution by the Office of the Attorney General's (OAG) Medicaid Fraud Control Unit (MFCU) that dismantled a scheme exploiting vulnerable HIV patients throughout New York City and Westchester County. Hussain owned, operated, or controlled over 20 pharmacies in Manhattan, the Bronx, and Westchester County over the course of the investigation, frequently moving his businesses to new locations. From 2015 to 2019, he and several of his employees and co-conspirators paid or directed others to pay illegal kickbacks to Medicaid recipients diagnosed with HIV to entice those recipients to have their prescriptions for HIV medication filled at the Hussain-controlled pharmacies. These kickbacks were typically between $25 and $100.

Hussain and his co-conspirators would often offer to buy back the HIV medication from the Medicaid recipients for cash at the time of delivery, usually offering $100 to $200 per bottle even though the wholesale price of the medications was usually between $2,000 and $3,000 per bottle. As a result of these dangerous inducements, many vulnerable patients went without their medication, putting them at severe risk of developing life-threatening complications from HIV.

Hussain and his co-conspirators also purchased large quantities of HIV medications through black market channels, often drugs obtained through other illegal kickbacks, and dispensed those prescription medications to unsuspecting recipients. Hussain and his co-conspirators submitted claims for reimbursement to the Medicaid program as if the medications they were disbursing had been purchased honestly and distributed safely.

State law strictly prohibits all medical providers, including pharmacies, from paying, or offering to pay, kickbacks in return for referring medical services paid for by Medicaid. State law also requires pharmacies to purchase all prescription medication inventory from properly licensed wholesale distributors to ensure legitimate and safe drug supply.

Previously, Hussain's co-conspirators, including Josmary Cardenas (aka Yasmine Aftab Hussain), Victor Streety, Blanca Vanessa Alvarado, and Felix Lopez all pleaded guilty to related crimes and have been sentenced.

• Cardenas pleaded guilty to multiple charges, including Health Care Fraud in the Second Degree, Grand Larceny in the Second Degree, Scheme to Defraud in the First Degree, and Conspiracy in the Fourth Degree and was sentenced to five years' probation on January 10, 2024.
• Streety pleaded guilty to Scheme to Defraud in the First Degree and Criminal Diversion of Prescription Medication and Prescriptions in the Fourth Degree and was sentenced to a six-month jail term and five years' probation on February 6, 2024.
• Alvarado pleaded guilty to Petit Larceny and was sentenced to a conditional discharge on June 12, 2024.
• Lopez pleaded guilty to Scheme to Defraud in the First Degree, Conspiracy in the Fourth Degree, and Criminal Diversion of Prescription Medication and Prescriptions in the Fourth Degree and was sentenced to five years' probation on April 27, 2022.

Along with the individual defendants, four corporations operating as pharmacies owned or controlled by Hussain or his co-conspirators were additionally charged: Harlem Super Pharmacy Inc., Health Smart Pharmacy Inc., Broadway RX Enterprises Inc., and E-Green Pharmacy Inc. d/b/a WinHealth Pharmacy. RX Enterprises Inc. and E-Green Pharmacy Inc. both pleaded guilty and were sentenced on October 16, 2024. As part of the sentences, the corporations must dissolve.

Hussain was sentenced today by Judge Brendan Lantry in New York County Supreme Court on his previously entered guilty plea to the charges of Grand Larceny in the First Degree, Grand Larceny in the Third Degree, Health Care Fraud in the First Degree, Health Care Fraud in the Second Degree, Scheme to Defraud in the First Degree, and Conspiracy in the Fourth Degree. He was also required to conclude a settlement agreement in which he paid $7 million in restitution to the state.

New Yorkers can report suspected fraud to the Attorney General's toll-free Medicaid Fraud Hotline, at (800) 771-7755 or online.

The Attorney General thanks the New York State Department of Health and the Office of the Medicaid Inspector General, as well as the United States Department of Health and Human Services, Office of the Inspector General (HHS-OIG) and the New York City Human Resources Administration for their assistance in this investigation. The Attorney General also thanks Medicaid MCOs Amida Care, MetroPlus, and Health First; pharmacy benefit managers CVS/Caremark and Express Scripts; pharmacy services administration organization Health Mart Atlas; and pharmaceutical wholesalers McKesson, Cardinal Health, and AmerisourceBergen for their cooperation throughout the investigation and prosecution of this matter.

MFCU's investigation was conducted by former MFCU Investigator David Salembier under the supervision of Deputy Chiefs William Falk, Commanding Officer, MFCU, and Ronald Lynch, Executive Officer, MFCU. The financial investigation was conducted by Principal Auditor-Investigators Kizzy-Ann Waldropt-Salim and Shoma Howard, with the assistance of New York City Regional Deputy Chief Auditor Jonathan Romano and New York City Regional Chief Auditor Thomasina Smith.

The criminal case was prosecuted by Special Assistant Attorneys General Brandon Phillips and Edward Ferrity with assistance from Deputy Regional Director David Arias and Regional Director Twan Bounds. The civil action was handled by Deputy Chief of the Civil Enforcement Division Diana Elkind and Special Assistant Attorney General Jill Brenner with the assistance of Civil Enforcement Chief Alee Scott. Special Assistant Attorney General Thomas O'Hanlon is the MFCU Chief of Criminal Investigations. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Criminal Justice Division is led by Chief Deputy Attorney General José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.

New York MFCU's total funding for federal fiscal year (FY) 2025 is $70,502,916. Of that total, 75 percent, or $52,877,188, is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent, totaling $17,625,728 for FY 2025, is funded by New York State.