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Melville man pleads guilty in HIV drug scheme, officials say

A Melville man pleaded guilty Tuesday for his role in a scheme to sell illegally obtained antiretroviral medication to hundreds of unsuspecting HIV-positive New Yorkers, authorities said.

Glenn Schabel, 55, served as both the supervising pharmacist and compliance officer for MOMS Pharmacy, formerly of Melville. He pleaded guilty in state Supreme Court in Riverhead to criminal diversion of prescription medications and prescriptions in the first degree and commercial bribe receiving in the first degree. Both are felonies.

Authorities said Schabel admitted he accepted more than $5 million in bribes on behalf of MOMS Pharmacy and “received prescription medication from sellers that he knew or had reasonable grounds to know were not authorized by law to sell.”

Schabel faces up to 7 years in state prison and must forfeit $5.5 million to the New York State Medicaid Program, authorities said. He pleaded guilty on behalf of his company, Glenn Schabel Inc., to money laundering in the first degree. As a result of his guilty pleas, Schabel will surrender his pharmacist license.

Attorney General Eric T. Schneiderman, who announced the plea Tuesday, said the convictions were part of his Medicaid Fraud Control Unit’s Operation Black-Market Meds investigation.

“This defendant, a licensed pharmacist, abused the public’s trust and became a participant in this multimillion dollar scheme that at its core preyed on the sick,” Schneiderman said in a statement. “My office will continue to protect taxpayers and consumers from schemes that threaten the safety of the public.”

Schabel was arrested in April 2012, along with three others, accused of using a network of bogus prescription medication wholesalers in Alabama, Mississippi, North Carolina, and California to launder money and sell more than $274 million in diverted prescription medications.

Ten companies were charged and 10 drugs were involved, including Truvada, Atripla and Reyataz. All are listed by the Food and Drug Administration as commonly prescribed HIV treatments.

The medications were obtained from illegal or unknown sources and moved through Allion Healthcare, Inc., the parent company of MOMS Pharmacy, Schneiderman said.

The medications were obtained by Schabel’s co-defendants using “various illegal means and included pills that had been previously dispensed to other individuals and that were then resold into the black market,” according to Schneiderman.

Those diverted medications were purchased by MOMS Pharmacy and dispensed to its patients, many of whom were Medicaid recipients, the attorney general’s office said, adding that the New York State Medicaid program reimbursed MOMS Pharmacy more than $150 million for the drugs.

The pills, dispensed between 2008 and 2012, posed “a serious health risk to the public” because of their unknown origin and quality, and some were counterfeit, expired, mislabeled or not properly stored, the attorney general’s office said.

Among the agencies taking part in the investigation were the New York State Office of the Medicaid inspector general, the Alabama Medicaid Fraud Control Unit, the FBI, DEA and the FDA’s Office of Criminal Investigations, and the Florida Department of Law Enforcement, Schneiderman said.

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