Authorities said he pocketed $25 million from the illegal sale of black-market medications, exposing HIV patients to risk.
Now, pharmacist Ira Gross, 63, of Babylon, faces up to 25 years in state prison for his role as “mastermind” of the scheme, in which Gross and his accomplices billed $274 million in illegal medication to Medicaid and other health care agencies — all while exposing patients to drugs “of unknown origin and potency” and, in some cases “drugs which were mislabeled” or which had “potentially expired,” New York Attorney General Eric T. Schneiderman said in a statement Tuesday.
Gross was convicted Monday in a jury trial in Suffolk County Supreme Court, found guilty of first-degree grand larceny, first-degree attempted grand larceny, first-degree criminal diversion of prescription medications and prescriptions, first-degree attempted criminal diversion of prescription medications and prescriptions, three counts of first-degree money laundering, second-degree money laundering, first-degree commercial bribing and fourth-degree conspiracy. He faces 8 1⁄3 to 25 years in prison when he is sentenced Sept. 8.
Gross was arrested by the Attorney General’s Medicaid Fraud Control Unit in April 2012.
The shell company authorities said Gross used to conceal and distribute criminal proceeds also was found guilty of three counts of first-degree money laundering and one count each of second-degree money laundering and first-degree commercial bribing. A co-defendant, Glenn Schabel of Melville, described by authorities as the supervising pharmacist and compliance officer for the Melville-based MOMS pharmacy, pleaded guilty to his role in the scheme in March, admitting that over a four-year period he had accepted more than $5 million in bribes.
Other defendants — Florida resident Stephen Manuel Costa and Texas resident Harry Abolafia — also previously pleaded guilty to their roles in the scam. Authorities said Gross’ wife, Lois Gross, and their adult children Dakota Gross and Chelsea Gross, remain civil defendants in a forfeiture action brought by the attorney general’s office, seeking the return “of proceeds and substituted proceeds” from the scheme held in their names.
Authorities said that Gross and Chapparal Services Ltd. illegally obtained medications through MOMS, described as “a high-volume online pharmacy” in Melville, with satellite offices in Manhattan, Brooklyn and in other states, then “dispensed the illegally obtained medication to Medicaid recipients” — all while billing the state Medicaid program.
Those medications were obtained, authorities charged, through illegal buybacks from patients, as well as through other illegal sources, then were rebottled using fake labels and serial numbers. Such medications can have broken seals or can even contain medications “different” from what’s indicated on the label, authorities said — all of which can put patients at significant risk.
In his statement, Schneiderman said, “As a licensed pharmacist, Gross understood the regulations of pharmaceutical distribution and knew how to evade them.”
The convictions were the result of a long-standing investigation called “Operation Black Market Meds.”
“The perpetrators of this complex scheme not only cheated the state Medicaid program out of millions of dollars, but preyed on some of New York’s most vulnerable patients just to make a quick buck,” Schneiderman said in his statement, adding: “These convictions should send a clear message that my office will not tolerate these types of abhorrent schemes. If you seek to line your pockets at the expense of the health and well-being of New Yorkers, you will be punished.”