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DEA: 13 charged in illegal opioid prescription scheme

Authorities have charged 13 people, including three Long Island medical professionals and a former New York State assemblyman, in connection with a scheme to illegally sell prescriptions for opioid painkillers and swindle millions of dollars from Medicaid and Medicare and launder money, federal officials announced on Friday, April 7, 2017. Credit: News 12 Long Island

Three Long Island medical professionals were among 13 people indicted in a scheme to swindle millions of dollars from Medicaid and Medicare by submitting patients to unnecessary procedures in exchange for giving them painkiller prescriptions — effectively putting 6.3 million opioid pills on the street, officials announced Friday.

At a news conference Friday afternoon at Drug Enforcement Agency headquarters in Manhattan, city, state and federal authorities announced the result of “Operation Avalanche” — two indictments filed by New York City’s Office of the Special Narcotics Prosecutor containing a total of 477 charges, including fourth-degree conspiracy, criminal sale of a prescription for a controlled substance, first- and second-degree health care fraud and money laundering.

Dr. Paul McClung of Valley Stream, physician assistant Marie Baptista Nazaire of Melville, and physical therapist Reynat Glaz of Valley Stream were among those named by authorities in their investigation as having participated in the scheme.

McClung and another doctor, Lazar Feygin of Staten Island, are accused of running three Brooklyn medical clinics that defrauded Medicaid and Medicare by billing for millions of dollars in unnecessary tests and procedures on patients. Feygin was the alleged “architect” of the operation, authorities said.

The doctors and other medical practitioners at the clinics got patients to submit to these tests by illegally prescribing them oxycodone “for no legitimate medical purpose.” The patients would not receive the prescriptions unless they submitted to the tests, for which the clinics billed government-funded medical insurance programs.

“It really covers an extraordinary scheme. A scheme that harmed not only the patients that were reportedly deceiving Medicare in these clinics, but did devastating harm to the people of New York and the New York metropolitan area, as well the taxpayers,” Bridget Brennan, New York City’s Special Narcotics Prosecutor said at the news conference. “This happened just as drug overdose rates in this city and in this area were spiking to a record high.”

Twelve of those identified in the indictments were arrested Friday morning, authorities said. All 12 pleaded not guilty at their arraignments Friday afternoon before Manhattan Supreme Court Justice Neil Ross.

Feygin was remanded back into custody. His attorney, Kenneth Kaplan, declined to comment Friday.

Nazaire and Glaz were ordered held on $100,000 cash bail or bond. Their attorneys could not be immediately reached for comment Friday. The remaining defendants were ordered held on cash bail or bond amounts ranging from $100,000 to $2 million.

McClung, who could be seen shaking his head in disagreement during his arraignment, was held on $2 million cash bail or bond.

His attorney, Arthur Gershfeld of New York, who also represented another defendant indicted in the case, said he wasn’t shown enough evidence against the defendants.

“I don’t believe their case is as strong as they say it is. I believe that these patients were treated because they needed services from a doctor,” Gershfeld said. “I believe that these were mere allegations and my clients will come out of this clean.”

A thirteenth defendant — Alec Brook-Krasny, a former state Assemblyman now affiliated with a Brooklyn laboratory and accused of altering test results at a laboratory to further the scheme — was out of the country at the time of the arrests, according to officials. His attorney has been in touch with authorities, officials said.

Authorities initially were tipped off to the scheme when they found an empty pill bottle in a car after a car stop in the Bronx in July 2013, according to a law enforcement official. Investigators then pulled records and found an alarming number of pills being distributed from the three clinics, the official said.

The discovery gave investigators probable cause to wiretap the personal phones of the defendants, after which they discovered the scheme, the official said.

“This is nothing more than an organization that distributed pain medicine to get people addicted, keep them addicted, and on the other end of it, defraud the government,” DEA Special Agent in Charge Wilber Plummer said at the news conference.

The investigation centered around two Brooklyn clinics owned by Feygin — Parkville Medical Health in Kensington and LF Medical Services of NY in Clinton Hill.

In 2013, McClung broke off from partnering with Feygin to begin his own practice, PM Medical in Brooklyn — continuing “the same pattern of criminal activity,” according to a DEA news release.

The clinics used shell companies to pay practitioners as part of the scheme, officials said.

The three clinics prescribed a combined 6.3 million oxycodone pills between early 2012 and early this year, authorities said.

Feygin’s two clinics received more than $16 million in Medicaid and Medicare reimbursements between early 2013 and this year, while McClung’s PM Medical received more than $8.6 million between 2013 and this year.

The clinics and two other firms also face charges in the indictments.“Feygin’s clinics and PM Medical made a business out of violating minimum medical standards and ethics in a ruthless quest for Medicaid cash,” Brennan said in a statement. “Patients endured unnecessary procedures knowing they would receive a monthly prescription for the most sought-after narcotic on the black market.”

The investigation included a long list of local, state and federal agencies, and was assisted by other agencies, including the Nassau, Suffolk Port Washington and Rockville Centre police departments, officials said.

News of the arrests comes amid growing concern about opioid abuse on Long Island and in New York City. A record 442 people died of drug overdoses on Long Island in 2015.

Drug overdose deaths increased by nearly 40 percent in New York City in 2016 from the previous year, in what authorities are calling a “public health crisis,” according to officials at a Police Executive Research Forum at NYPD headquarters this week.

How authorities say the alleged scheme worked

  • Patient would go to clinic seeking opioids
  • Clinic would conduct unnecessary tests or procedures on patient and bill Medicaid or Medicare
  • In exchange for patient’s cooperation, clinic would write patient medically unnecessary prescription for oxycodone
  • Clinics would pay practitioners through shell companies

“Operation Avalanche”

Charged under the Feygin Indictment

  • Lazar Feygin, 70, of Staten Island, physician
  • Konstantin Zeva, 65, of Brooklyn, office manager
  • Rachel Smolitsky, 64, of Stamford, Conn., office manager
  • Michael Taitt, 56, of New York City, physician
  • Marie Nazaire, 59, of Melville, physician assistant
  • Marjorie Louis-Jacques, 53, of Brooklyn, nurse practitioner
  • Reynat Glaz, 43, of Valley Stream, physical therapist
  • Alec Brook-Krasny, 59, of Brooklyn, affiliated with testing laboratory Quality Laboratory Services
  • Parkville Medical Health in Kensington
  • LF Medical Services of NY in Clinton Hill
  • Charged under the McClung Indictment
  • Paul McClung, 57, of Valley Stream, physician
  • Vyacheslav “Steve” Maksakov, 58, of Princeton, N.J., office manager
  • Pavel Krasnou, 38, of Staten Island, office manager
  • Abdus Sattar, 59, of Queens, physician assistant
  • PM Medical of Brooklyn
  • TRC Global Opportunity Inc.
  • Rego Management Inc.
  • Juan Cabezas, 59, of Queens, a physician assistant, was charged under both indictments

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