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Medicaid Fraud Lawyer Update: Brooklyn Pharmacist pays $1.2 Million to Settle Allegations of Drug Use From Unauthorized Wholesalers

above-the-bar-logo.jpgOur Whistleblower Lawyers are often asked to speak about Medicaid Fraud in the pharmaceutical industry. In general, it is unlawful for pharmacists to (i) charge government programs for unfilled prescriptions; (ii) use black market drugs from unauthorized wholesalers; and (iii) charge government insurers based on incorrect billing rates. Whistleblowers in healthcare fraud play an important role in our society as they not only protect our valuable taxpayer dollars but they can also promote the public’s health and safety concerns and prevent increases in health insurance premiums. Our Medicaid Fraud Attorneys have helped protect whistleblowers so that they can confidently come forward with fraudulent schemes perpetrated by their employers or others. These cases can have serious civil and criminal implications so it is important to seek experienced legal advice. Call our office to confidentially learn how we can help you.


EXAMPLE NO. 1: Earlier this month, Rao Veeramanchaneni, a Brooklyn-based pharmacist agreed to pay approximately $1.2 million dollars to settle allegations that he improperly billed prescription medications to the Medicaid program. As part of the settlement, Mr. Veeramanchaneni admitted that he purchased black market drugs, including diabetic and HIV/AIDS drugs, on the street including out of criminals’ cars. It is alleged that he then used these black market drugs and dispensed them to patients who were unaware of their origin. It is unlawful for pharmacies to dispense medication obtained from anyone other than an authorization wholesaler. This protects the integrity of the medication because improperly obtained medication can be improperly labeled, expired, diluted or contain different drug elements which can seriously harm a patient’s health condition. As part of the settlement, he also agreed to surrender his license as a pharmacist and be excluded from further participating in the Medicaid program.

EXAMPLE NO. 2: Last year, two pharmacists, Luba Bayasny and Alla Shrayber, in Brooklyn were arrested and charged with conspiracy to commit healthcare fraud. It was alleged that they submitted false claims to the Medicare Part D program for medications that they did not purchase or dispense. It was alleged that they charged $3 million dollars for unfilled prescriptions. It is important to note these are just allegations at this time and the justice system has a presumption of innocence so no conclusions should be drawn.

EXAMPLE NO. 3: In addition, the fraudulent healthcare schemes include creation of phantom pharmacies. Under this scenario, an individual (not a pharmacist) establishes a fictional pharmacy with a street address and then uses stolen or unlawfully obtained data regarding patients and doctors to create fraudulent prescriptions. The individual then submits these fake prescriptions for reimbursement to government insurers. Some individual claims could be over $7,500.00. Healthcare fraud is a danger to our society as it causes health care costs to increase and affects safety of patients. It is critical for individuals to stand up and speak up.

EXAMPLE NO. 4: Finally, although it is not related to pharmacies, it is worth pointing out another common example of healthcare fraud involving prescription drugs. It is unlawful for drugs to be prescribed for uses not approved by the FDA. This is called off-label use. For example, a doctor should not proscribe a cancer drug for a non-cancer related use.

If you aware of fraud or suspect it in the healthcare field, contact our Whistleblower Lawyers to confidentially learn your rights and options. We have successfully advised pharmacists (who did not participate in the scheme), technicians and many other healthcare professionals. Read some our quick tips for reporting fraud here.


Thank you for visiting our Blog. This blog provides general information and thoughts about various employment law issues primarily in the New York Tri-State area and occasionally in other areas. You are welcome to read the posts. However, do not construe any content on this blog as legal advice or the creation of an attorney-client relationship. Again, we provide the content only for informational purposes. You should not make decisions based information on our blog since the application of the law depends on the facts and each situation may be different. In addition, the law in most jurisdictions is different and changes constantly and we make no representations that any information on our blog has been updated. The Blog should not be used as a substitute for competent legal advice from an experienced employment law attorney in your state or jurisdiction.

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