48 Indicted in Prescription Fraud Ring

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The FBI collared dozens of suspects in New York and New Jersey Tuesday in a massive fraud scheme involving the resale of hundreds of millions of dollars worth of prescription drugs, authorities said.

Manhattan U.S. Attorney Preet Bharara scheduled a 1 p.m. news conference to announce the unsealing of charges against 48 people.

The scheme involved the resale of prescription drugs originally dispensed to Medicaid recipients in the New York City area, prosecutors said.

The pills were resold into collection and distribution channels that ultimately end at pharmacies, where the meds are resold to unsuspecting consumers.


The drugs involved were not drugs of abuse but prescriptions meant for the treatment of various illnesses, including HIV, schizophrenia and asthma, prosecutors said.

For instance the fraudsters target the HIV drug Atripla. One bottle has a Medicaid reimbursement value of $1,635.

The indictment describes a daisy-chain involving at one end Medicaid beneficiaries who are typically AIDS patients or individuals who suffer from other illnesses and at the other end “aggregators” who sell the second-hand drugs into the underground distribution channels.

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