Two Brooklyn pharmacy owners are being charged with allegedly conspiring to bribe customers and doctors, as well as submitting approximately $26 million in fraudulent claims to Medicare and Medicaid.
Taesung “Terry” Kim (58) and Dacheng “Bruce” Lu (44), both from New York, have been charged with conspiracy to commit health care fraud, conspiracy to commit money laundering and conspiracy to pay illegal health care kickbacks and bribes, after an indictment was unsealed in federal court in Brooklyn on May 2.
The charges in the indictment are allegations, and the defendants are presumed to be innocent unless and until proven guilty.
According to court records, Kim and Lu jointly owned and operated four pharmacies, which include:
- 888 Pharmacy Inc. in Brooklyn
- Huikang Pharmacy Inc. in Brooklyn
- Elmcare Pharmacy Inc. in Queens
- NY Elm Pharmacy Inc. in Queens
Between January 2015 and December 2022, Kim and Lu allegedly conspired with others to submit false and fraudulent claims to Medicare and Medicaid for the dispensing of pharmaceutical and over-the-counter products that were medically unnecessary, procured by the payment of kickbacks and bribes, or not provided.
The pair allegedly conspired with others to bribe Medicare beneficiaries and Medicaid recipients to fill their prescriptions at their pharmacies. Bribes were generally in the form of cash or supermarket gift cards.
Kim and Lu also conspired with others to pay illegal kickbacks and bribes, in the form of rent and office staff, to the doctors who prescribed the medically unnecessary medications filled at their pharmacies.
Court records suggest the pharmacy owners then laundered the proceeds of their fraud through shell entities to generate cash that they could disperse as profits to themselves and the pharmacies’ other owners and to pay pharmacy customers as kickbacks.
As part of the scheme, Kim and Lu’s pharmacies submitted approximately $26 million in fraudulent claims to Medicare and Medicaid.
The defendants each face a maximum of 35 years in prison, which include:
- A maximum penalty of 10 years in prison for conspiracy to commit health care fraud
- A maximum of 20 years in prison for conspiracy to commit money laundering
- Five years in prison for conspiracy to pay illegal health care kickbacks and bribes
The defendants were arrested and arraigned before U.S. magistrate judge Cheryl Pollak on May 2.
Trial attorney Patrick Campbell and acting assistant chief Miriam Glaser Dauermann of the Criminal Division’s Fraud Section are prosecuting the case.
