A New York ?pharmacist who is accused of unlawful diversion of prescription drugs may also vulnerable to charges of Medicare or Medicaid fraud. In particular, federal authorities in NYC are cracking down on the phenomenon commonly known as ?second-hand drugs.?

While arrests in connection with a large drug diversion scheme have been announced back in August 2012, the investigation that led to these arrests is still continuing and exposing many individuals for potential prosecution.

When a pharmacy owner participates in a drug diversion scheme by buying prescription pills second-hand in order to resell them from his pharmacy, he is not just saving money ? he is setting himself up for criminal prosecution, not just for his individual action, but as a participant and conspirator in a multi-million dollar Medicaid fraud scheme.

Second-hand drugs are typically obtained from Medicaid and private insurance beneficiaries who use Medicaid or private insurance to pay for them. While many of these prescriptions are legitimately obtained from a physician, the beneficiaries go on to commit Medicaid and insurance fraud by reselling the medications instead of using them. Usually, the drugs continue to be resold along various distribution channels until they end up at ostensibly legitimate pharmacies, which resell them to their customers, who are unaware that the drugs were not legitimately obtained from a pharmaceutical manufacturer.

In addition to violating several laws by purchasing and reselling second-hand drugs, pharmacy owners are committing further Medicaid or insurance fraud when they seek reimbursement from Medicaid or private insurances for the second-hand drugs. Since second-hand drugs are usually heavily discounted, the pharmacist ends up making a large unlawful profit from the fraudulent billing.

Participation in a drug diversion and Medicaid fraud scheme can carry heavy penalties. Penalties tend to increase in severity based on the length and extend of the defendant?s involvement in the scheme, as well as the monetary extent of the fraud. In addition to fines and restitution, a conviction based on participation in a drug diversion scheme (which, in addition to health care fraud charges, will usually also involve charges of various FDA violations) can result in decades in prison. Further, a pharmacist or pharmacy owner who is convicted of health care fraud will be banned from Medicaid and Medicare, and faces licensing consequences as well.

If you are a New York City pharmacy owner, and you are being investigated or prosecuted for participation in a drug diversion scheme, you should speak to a qualified license defense attorney right away. Do not attempt to work out things on your own by speaking with investigators or prosecutors ? they are interested in obtaining convictions, not in helping you. Our experienced and knowledgeable attorneys will stand by your side to mount an effective defense in your criminal case, as well as regarding any professional licensing issues you may face.

Call? our experienced New York City pharmacy defense attorneys at (212) 577-6677 to schedule an immediate consultation.