Queens Pharmacy Owner Charged With $29M Health Care Fraud Scheme: Feds

QUEENS — Two pharmacy owners, including a man with operations in Flushing, were charged after submitting false claims to Medicare and Medicaid to launder the proceeds, prosecutors said.

Dacheng Lu, 44, was arrested Tuesday after filing fraudulent claims to federal health insurance programs for prescriptions that were never dispensed to pay illegal kickbacks and bribes, said Breon Peace, United States Attorney for the Eastern District of New York.

Lu operated NY Elm Pharmacy Inc. in Flushing, and Taesung Kim ran Elmcare Pharmacy Inc. in Brooklyn, Peace said. Kim and Lu’s pharmacies submitted about $29 million in fraudulent claims to Medicare and Medicaid, prosecutors said.

The two conspired in the health care scheme between January 2015 and December 2022, Peace said.

They each face a maximum penalty of 10 years in prison for conspiracy to commit health care fraud, 20 years in prison for conspiracy to commit money laundering, and five years in prison for conspiracy to pay illegal health care kickbacks and bribes, prosecutors said.

Kim and Lu allegedly laundered the proceeds of their scheme through shell entities to generate cash that they could distribute as unrecorded profits to themselves and the pharmacies’ other owners and to pay kickbacks to pharmacy customers, Peace said.