Pharmacists in Brooklyn and Suffolk County have been charged with allegedly re-selling HIV and AIDS medications to patients that had been illegally obtained on the black market.  The medications were mislabelled and potentially mishandled and expired.

Attorney General Eric Schneiderman said, "The ringleaders of this complex scheme not only cheated the Medicaid program out of millions of dollars, but preyed on some of New York’s most vulnerable patients just to make a quick buck," reports the New York Post.

An investigation code-named "Operation Black Market Meds" shut down an allegedly illegal operation that distributed HIV prescription drugs through MOMs pharmacy, a high-volume pharmacy with satellites in Suffolk County and Brooklyn.  The parent company, Allion Healthcare, has also been accused of dispensing illegally obtained medications to Medicaid recipients and billing Medicaid for the unsellable drugs.

The Attorney General's office reports that "The scheme endangered patients by exposing them to drugs of unknown origin and potency, and in some cases, drugs that were mislabeled or potentially expired."

The indictment and forefeiture complaint charges that Glenn Schabel, supervising pharmacists and compliance officer for MOMS pharmacy, accepted bribes to purchase ove $275 million worth of black market HIV medications for a number of shell companies.  The medications may have included unused pills that had been previous dispensed to individuals, as well as stolen and expired medications.  

The shell companies were allegedly controlled by Stephen Manuel Costa, a 27 year old Florida resident who is alleged to have furnished millions of black market HIV medications to MOMS patients, while Allion, under the direction of Shabel  billed Medicaid for them, allegedly knowing they were illegally obtained and fraudulent.

Attorney General Schneiderman's office also alleges that Ira Gross, another licensed pharmacist, brokered the sale of the illegally diverted drugs between Schabel and Costa, and a fourth defendant, Harry Abolafia created false invoices.  Schabel, Gross and Abolafia all allegedly received $5.3 million, $21.2 million, and $1.4 million, respectively for their roles in the distribution of diverted, fraudulent medicines to patients.

Says Attorney General Schneiderman's office, "In these types of black market operations, drugs are obtained from a variety of sources, and can be rebottled with fake labels and serial numbers, broken seals, or contain different medications than what’s indicated on the labels. As a result, patients are exposed to potential adverse drug interactions, overdoses, or a decline in their condition by not getting the treatment they were prescribed. "

The Attorney General's office used telephone wiretaps to intercept a delivery of over $1 million worth of fraudulent prescription HIV medications from one of Costa's companies to the distribution center of MOMs pharmacy.  Additionally, the office seized millions of dollars in assets through a forfeiture complaint.