Pharmacist Sentenced to 4 Years in Prison for Multimillion-Dollar Health Care Fraud

The Department of Justice (DOJ) has announced that pharmacist/pharmacy owner Nerik Ilyayev was sentenced to 4 years in prison for his role in a massive health care fraud scheme targeting Medicare, Medicaid, and private insurers.

The Crime

According to the criminal complaint and court filings, Dr Ilyayev was the owner and operator of a Manhattan pharmacy. Between February 2021 and March 2022, Dr Ilyayev used the Manhattan pharmacy to pay illegal kickbacks to low-income patients with HIV who he recruited to fill prescriptions for expensive HIV medications. Dr Ilyayev never provided the patients with the medication, but he filed fraudulent insurance claims with Medicare and Medicaid for the HIV medications he claimed to be dispensing.

In addition, Dr Ilyayev attempted to hide his involvement in the scheme by using the identity of another person. Ultimately, Medicare and Medicaid paid a total of $5.2 million in fraudulent claims for HIV medications. At some point, Dr Ilyayev shut down the Manhattan pharmacy and took control of one in Queens, again using the identity of another person to hide his wrongdoing. The Queens pharmacy defrauded no-fault automobile insurance providers by filing approximately $1.2 million in fraudulent claims.

Finally, Dr Ilyayev was found to be selling black market pharmaceuticals from the Queens pharmacy to other pharmacies. Dr Ilyayev’s co-conspirator, a money launderer who laundered $4.2 million of the Manhattan pharmacy’s fraud proceeds, was also charged. The fraud proceeds were laundered with the help of Uzbekistan-based partners.

The Sentence

Both Dr Ilyayev and his co-conspirator pled guilty in the fall of 2023 and were sentenced in the spring of 2024. Dr Ilyayev pled guilty to one count of conspiracy to commit health care fraud, which carries a maximum of 10 years in prison. Ultimately, the 36-year-old pharmacist was sentenced to 4 years in prison, as well as 3 years of supervised release and restitution of over $6 million.

“Nerik Ilyayev took advantage of our nation’s health care system, which provides payments for critical medications for low-income [patients with] HIV. He paid illegal kickbacks to these patients to use their billing information and took millions of dollars in reimbursements from the Medicare and Medicaid program for medications that he did not actually dispense,” said US Attorney Damian Williams in a statement.

References

Pharmacy owner and money launderer plead guilty to multiple fraud schemes. News release; US Attorney’s Office, Southern District of NY. October 3, 2023. Accessed June 10, 2024. https://www.justice.gov/usao-sdny/pr/pharmacy-owner-and-money-launderer-plead-guilty-multiple-fraud-schemes

Pharmacy owner sentenced to four years in prison for health care fraud. News release; US Attorney’s Office, Southern District of NY. April 18, 2024. Accessed June 10, 2024. https://www.justice.gov/usao-sdny/pr/pharmacy-owner-sentenced-four-years-prison-health-care-fraud