New York pharmacy owner pleads guilty in $25M healthcare bribery scheme

Detailing a system of kickbacks and bribes, the part owner of New York’s 888 pharmacy Inc. and Huikang Pharmacy Inc. – Dacheng Lu – pled guilty last week in conspiring to defraud Medicare and Medicaid by more than $25 million.

Lu pled guilty to conspiracy to commit health care fraud – a crime with a maximum penalty of 10 years in prison. He is scheduled to be sentenced on Jan. 24, 2024. According to prosecutors, between January 2015 and December 2022, Lu and his co-conspirators referred Medicare and Medicaid recipients to medical practices that prescribed medically unnecessary topical medications and pain patches, for which the programs were billed. In exchange, Lu and others provided those medical practices with kickbacks and bribes in the form of rent and office staff.

An investigation is ongoing, as led by the Federal Bureau of Investigation (FBI) and Department of Health and Human Services Office of Inspector General (HHS-OIG). Trial attorney Patrick Campbell of the Justice Department’s Criminal Division’s Fraud Section helmed the case.

To date, the Department of Justice reported that its Criminal Division has charged more than 4,200 defendants since March 2007, for billing the Medicare program faulty charges of more than $19 billion.