Former NJ pharmacy owner admits to role in multimillion dollar kickback scheme

A former pharmacy owner in Union City, N.J., pleaded guilty to his role in a multimillion dollar conspiracy to pay kickbacks and bribes to physicians and defraud the IRS, according to the U.S. Department of Defense.

Alex Fleyshmakher was co-owner of Prime Aid Pharmacies, which operated out of Union City and the Bronx in New York City. Both pharmacies are now closed. 

To obtain a higher volume of prescriptions, Mr. Fleyshmakher and seven co-conspirators allegedly paid kickbacks and bribes to physicians and their employees to induce them to steer prescriptions to Prime Aid Pharmacies. From 2008 to 2017, bribes included expensive meals, designer bags and payments by cash, check and wire transfers, the Justice Department said Jan. 14. 

A single medical practice in New Jersey steered prescriptions to the pharmacies costing Medicare and Medicaid about $24.8 million. 

Mr. Fleyshmakher also allegedly took insurance reimbursement checks from the Prime Aid pharmacies and either cashed them or diverted them through Canadian bank accounts to conceal the funds and failed to report them on his personal income tax returns. The scheme cost the IRS $9.1 million, according to the Justice Department. 

Mr. Fleyshmakher pleaded guilty to conspiracy and tax evasion charges, each of which carries a maximum penalty of five years in prison and a $250,000 fine. He is to be sentenced May 27. 

Read the Justice Department's full news release here.

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