On September 17, 2009, physician Muhammad Ejaz Ahmad ("Ejaz Ahmad") was sentenced to 21 months in prison and ordered to forfeit over $1.7 million for his role in an arrangement to pay illegal kickbacks to Medicaid recipients. The sentence was imposed in Manhattan federal court in the Southern District of New York by United States District Judge John G. Koeltl. The sentence followed Ahmad's guilty plea proceeding on May 22, 2008.
This case involved the physician paying kickbacks to patients and referring the patients to pharmacies which were owned by his wife, brother and brother-in-law. Those pharmacies also paid kickbacks to patients to keep their business. His brother and brother-in-law also plead guilty and his brother has already been sentenced.
According to documents filed in this case and statements made during court proceedings the facts are as follows:
Ejaz Ahmad was a physician, with an office in Brooklyn, who specialized in infectious diseases—including the treatment of HIV-positive patients. From January 2004 to August 29, 2006, Ejaz Ahmad attracted HIV-positive Medicaid recipients by paying an illegal kickback of $40 to patients at every visit, even though New York State only paid him $30 for the visit.
According to documents filed in this case and statements made during court proceedings the facts are as follows:
Ejaz Ahmad was a physician, with an office in Brooklyn, who specialized in infectious diseases—including the treatment of HIV-positive patients. From January 2004 to August 29, 2006, Ejaz Ahmad attracted HIV-positive Medicaid recipients by paying an illegal kickback of $40 to patients at every visit, even though New York State only paid him $30 for the visit.
Ejaz Ahmad then referred these patients to one of three pharmacies that he owned and controlled through his wife: Staywell Pharmacy doing business as Nash Pharmacy located in Bayside, New York; Stay Slim Pharmacy in Brooklyn, New York; and ASA Drugs doing business as Script Depot, in Rego Park, New York. Each of these pharmacies was also affiliated with one of his relatives—either his brother, Muhammad Nawaz Ahmad, or brother-in-law, Mohammad Tanveer. Like Ejaz Ahmad, his brother Nawaz Ahmad and brother-in-law Tanveer also paid $40 kickbacks to the Medicaid patients in order to retain the patients' business.
Between January 2002 and September 2006, the New York State Medicaid program paid the pharmacies at least $2.5 million for services purportedly provided to patients to whom Nawaz Ahmad and his relatives had paid illegal kickbacks. It was alleged that most of these billings were for medications that were never ordered from legitimate wholesalers. Instead, the pharmacies allegedly provided these Medicaid patients with lower-priced, diverted, and black-market medications or, in some cases, billed Medicaid for drugs that were never dispensed.
For example, in 2005 alone, the pharmacies allegedly billed Medicaid over $1 million in excess of what the pharmacies had ordered from their legitimate wholesale drug distributors for three costly medications. The government claimed that the excess profits obtained from the Medicaid program paid for the kickbacks to patients.
Judge Koeltl ordered Ejaz Ahmad, 52, of Albertson, New York, to pay $1,783,020.06—the amount held in his pharmacies' bank accounts at the time of his arrest—to the Medicaid program in restitution. The monies held in the bank accounts had been forfeited in a parallel civil action.
His brother Muhammad Nawaz Ahmad, 41, of Floral Park, New York, pleaded guilty on May 22, 2008, to conspiring to pay illegal kickbacks to Medicaid recipients, and was sentenced by Judge Koeltl to 18 months in prison on December 14, 2008.
His brother-in-law, Mohammad Tanveer, 52, of Floral Park, New York, pleaded guilty on June 10, 2008 before Judge Koeltl. His sentencing is scheduled for September 25, 2009, at 4:00 p.m.
Between January 2002 and September 2006, the New York State Medicaid program paid the pharmacies at least $2.5 million for services purportedly provided to patients to whom Nawaz Ahmad and his relatives had paid illegal kickbacks. It was alleged that most of these billings were for medications that were never ordered from legitimate wholesalers. Instead, the pharmacies allegedly provided these Medicaid patients with lower-priced, diverted, and black-market medications or, in some cases, billed Medicaid for drugs that were never dispensed.
For example, in 2005 alone, the pharmacies allegedly billed Medicaid over $1 million in excess of what the pharmacies had ordered from their legitimate wholesale drug distributors for three costly medications. The government claimed that the excess profits obtained from the Medicaid program paid for the kickbacks to patients.
Judge Koeltl ordered Ejaz Ahmad, 52, of Albertson, New York, to pay $1,783,020.06—the amount held in his pharmacies' bank accounts at the time of his arrest—to the Medicaid program in restitution. The monies held in the bank accounts had been forfeited in a parallel civil action.
His brother Muhammad Nawaz Ahmad, 41, of Floral Park, New York, pleaded guilty on May 22, 2008, to conspiring to pay illegal kickbacks to Medicaid recipients, and was sentenced by Judge Koeltl to 18 months in prison on December 14, 2008.
His brother-in-law, Mohammad Tanveer, 52, of Floral Park, New York, pleaded guilty on June 10, 2008 before Judge Koeltl. His sentencing is scheduled for September 25, 2009, at 4:00 p.m.
Attorney Commentary: This case is a laundry list of rules that were violated. From the kickbacks to the patients, to the self-referral to pharmacies that were owned or controlled by Ejaz Ahmad, the billing for medications that were not provided or billing for other black market medications, and other program violations - this case could be used as a sample health care fraud case. We have seen numerous cases where to get around the self-referral rule that providers will have a relative be the owner of the other health care facility. These arrangements usually do not stand up to scrutiny.
Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in health care fraud cases. Their website is: http://www.greenassoc.com/
