Taesung 'Terry' Kim of Great Neck charged in health care fraud scheme

Two pharmacy owners and operators, one from Great Neck, have been named in an indictment unsealed in Brooklyn federal court charging them in connection with a "health care fraud scheme” that bilked Medicare and Medicaid for millions in unnecessary prescriptions and over-the-counter products that were not dispensed, federal officials said.

The defendants, identified as Taesung “Terry” Kim, 58, of Great Neck, and Dacheng “Bruce” Lu, 44, of Flushing, were arrested Tuesday and arraigned before U.S. Magistrate Judge Cheryl L. Pollak.

Their attorneys could not immediately be reached for comment.

If convicted, each faces a maximum of 10 years in prison for conspiracy to commit health care fraud, 20 years in prison for conspiracy to commit money laundering, and five years in prison for conspiracy to pay illegal health care kickbacks and bribes, federal officials said.

In a statement issued by the office of U.S. Attorney for the Eastern District of New York, Breon Peace, officials said Kim and Lu owned and operated four pharmacies in Brooklyn and Flushing, Queens. Between January 2015 and last December, the two “conspired with others” to receive about $29.4 million in payments from “false and fraudulent claims” to Medicare and Medicaid for the dispensing of medications that were “medically unnecessary” — at times procured by “kickbacks and bribes," officials said.

Medicare paid about $24 million to the pharmacies, while Medicaid paid about $5.4 million, according to the indictment.

Sometimes, according to the indictment, Kim and Lu conspired with others who paid kickbacks and bribes in the form of supermarket gift certificates or cash to Medicare beneficiaries and Medicaid recipients who had prescriptions filled at one of their pharmacies.

The indictment also alleges the pair conspired with unnamed others to pay kickbacks and bribes in the form of rent and office staff to doctors who prescribed medically unnecessary medications filled through their pharmacies. Officials said the proceeds were then laundered through shell companies the pair used to pay themselves and other owners, and to fund the kickbacks paid to customers at their pharmacies.

By John Valenti

john.valenti@newsday.com

John Valenti, a reporter at Newsday since 1981, has been honored nationally by the Associated Press and Society of the Silurians for investigative, enterprise and breaking news reporting, as well as column writing, and is the author of “Swee'pea,” a book about former New York playground basketball star Lloyd Daniels. Valenti is featured in the Emmy Award-winning ESPN 30-for-30 film “Big Shot.”