Indictment — No. 1:20-cr-00580 (Dkt. 32, E.D.N.Y.)
Summary
Superseding indictment filed May 21, 2021 in the Eastern District of New York, case 1:20-cr-00580, against Peter Khaim and Arkadiy Khaimov. It charges fraud conspiracy, aggravated identity theft and money laundering conspiracy tied to pharmacy billing of Medicare, Medicaid and drug plans. The indictment sets out New York's pharmacy registration rules, which require disclosure of owners and a named supervising pharmacist. It focuses on costly topical drugs such as Targretin Gel 1%, priced above $34,000 per 60 gram tube, and notes that drug plans waived prior authorization during the COVID-19 public health emergency. These are charges.
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“Indictment — No. 1:20-cr-00580 (Dkt. 32, E.D.N.Y.).”
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Case 1:20-cr-00580-AMD Document 32 Filed 05/21/21 Page 1 of 23 PageID #: 247
JN/ABS:JF/AE
F. #2020R0 1145
UNITED STATES DISTRICT COURT
1:20-cr-00580(AMD)(RML)
EASTERN DISTRICT OF NEW YORK
-------------- - ------------X
UNITED STATES OF AMERICA SUPERSEDING
INDICTMENT
- against -
Cr. No. 20-580 (AMD)
PETER KHAIM and (T. 18, U.S .C., §§ 982(a)(l), 982(a)(7),
ARKADIY KHAIMOV, 982(b)(l), 1028A(a)(l), 1028A(b),
1028A(c)(5), 1349, 1956(a)(l)(B)(i),
Defendants. 1956(h), 2 and 3551 et seq.; T. 21, U.S.C.,
§ 853(p))
---------------------------X
THE GRAND JURY CHARGES:
INTRODUCTION
At all times relevant to this Superseding Indictment, unless otherwise indicated:
I. Background
A. New York Law Governing the Provision of Pharmacy Services
1. The provision of pharmacy services in New York State was governed by
Article 137 of the New York Education Law ("Article 137"), which regulated the profession of
pharmacy, Article 33 of the New York Public Health Law ("Article 33") and the Rules of
Professionalism set by the New York State Board of Regents ("Rules of Professionalism"),
among others.
2. Article 13 7 provided, inter alia, that no person or entity was permitted to
offer prescription drugs for sale unless registered as a pharmacy by the New York State
Department of Education ("Department of Education"). Persons or entities that wished to
obtain a pharmacy registration were required to submit an Application for Initial Registration or
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Transfer of Ownership of Pharmacy (the "New York Phaimacy Application"), also known as
"Form PH 200," which form was dictated by the Department of Education.
3. The New York Pharmacy Application required each applicant to provide
the full name and certain requested information for each corporate officer, partner or member, as
well as the full name and certain requested information for each owner or principal stockholder
(owning 10 percent or more of corporate stock) of the pharmacy. The registrant (an individual
owner, partner, corporate officer, member or other authorized person) was required to attest that
he or she "affirm[ ed] under penalty of perjury that the answers and statements that he/she []
made in the[] application [were] true and[] made and given with the intent of having the
[Department of Education] and the New York State Board of Pharmacy rely on the truth thereof'
in determining whether to grant the application.
4. Article 137 provided, inter alia, the following requirements for
pharmacies:
(a) All prescription drugs were required to be dispensed by a licensed
pham1acist;
(b) Only a licensed person was permitted to practice pharmacy or use
the title "pharmacist" (with a limited number of exceptions not applicable here); and
(c) If the owner of a pharmacy was not a licensed pharmacist and
thereby not capable of personally supervising the pharmacy, the licensed pharmacist who had
personal supervision of the pharmacy (the "Supervising Pharmacist") was required to be named
on the pharmacy registration. If such licensed pharmacist no longer had personal supervision of
the pharmacy, the owner was required to notify the Department of Education of that fact and
provide information for a new Supervising Pharmacist.
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5. The Rules of Professionalism provided that, among other responsibilities,
a Supervising Pharmacist of a New York State-registered pharmacy was required to have:
(a) ensured that either the Supervising Pharmacist or another licensed
pharmacist was physically on the premises of the pharmacy at all times that the pharmacy was
open for business;
(b) refrained from delegating professional responsibilities to a person
whom the Supervising Pharmacist or otherwise licensed pharmacist knew was not qualified to
perform them; and
(c) notified the New York State Board of Pharmacy within seven days
of any change in the identity of the Supervising Pharmacist.
B. The Health Care Benefit Programs
6. The Medicare program ("Medicare") was a federal health care program
providing benefits to persons who were at least 65 years old or disabled. Medicare was
administered by the Centers for Medicare and Medicaid Services ("CMS"), a federal agency
under the United States Department of Health and Human Services ("HHS"). Individuals who
received benefits under Medicare were referred to as Medicare "beneficiaries."
7. Medicare was divided into multiple parts. Medicare Part D provided
prescription drug coverage to persons who were eligible for Medicare.
8. Medicare beneficiaries obtained Part D benefits in two ways: (a) by
joining a prescription drug plan, which covered only prescription drugs, or (b) by joining a
Medicare Advantage Plan, which covered both prescription drugs and medical services
(collectively, "Part D Plans"). Part D Plans were operated by private companies, often referred
to as drug plan "sponsors," that were approved by Medicare ("Medicare Drug Plan Sponsors").
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9. Medicare and Medicare Drug Plan Sponsors were each a "health care
benefit program," as defined by Title 18, United States Code, Section 24(b).
10. CMS assigned pharmacies a national provider identification number
("NPI"). A pharmacy dispensing medications to a beneficiary used its assigned NPI when
submitting a claim for reimbursement under Medicare Part D. A phannacy was permitted to
submit claims for reimbursement under Part D only for medications that were medically
necessary and actually dispensed. A pharmacy was required to maintain records verifying that it
dispensed the medications.
11. The Medicaid Program ("Medicaid") in New York State was a federally
and state funded health care program providing benefits to individuals and families who met
specified financial and other eligibility requirements, and to certain other individuals who lacked
adequate resources to pay for medical care. CMS was responsible for overseeing the Medicaid
program in participating states, including New York. Individuals who received benefits under
Medicaid, like those who received benefits under Medicare, were referred to as "beneficiaries."
12. In New York State, Medicaid provided prescription drug coverage to its
beneficiaries. Medicaid beneficiaries could obtain their prescription drug benefits from
pharmacies either through "fee-for-service" plans or through "Medicaid Managed Care Plans,"
which were plans administered by private insurance companies that were paid by Medicaid.
13. Medicaid and Medicaid Managed Care Plans were each a "health care
benefit program," as defined by Title 18, United States Code, Section 24(b ).
14. A pharmacy could pm1icipate in the Medicare Pa11 D program and
Medicaid (collectively, the "Prescription Drug Plans") by entering into an agreement: (a) directly
with a Prescription Drug Plan; (b) with one or more Pharmacy Benefit Managers ("PBMs"); or
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(c) with a Pharmacy Services Administration Organization ("PSAO"). A PBM acted on behalf
of one or more Prescription Drug Plans. Through a Prescription Drug Plan's PBM, a pharmacy
could join a Prescription Drug Plan's network. A PSAO contracted with PBMs on behalf of the
pharmacy.
15 . Typically, a beneficiary enrolled in a Prescription Drug Plan obtained
prescription medications from a pharmacy authorized by the beneficiary's Prescription Drug
Plan. After filling a beneficiary ' s prescription, the authorized pharmacy submitted the claim
either directly to a Prescription Drug Plan or to a PBM that represented the Prescription Drug
Plan. The pharmacy provided, among other things, the beneficiary's identification number, the
identification number of the medical professional who ordered the prescription and the
pharmacy's identification number, such as the NPI, with the claim. The Prescription Drug Plan
or the PBM determined whether the pharmacy was entitled to payment for each claim. Then,
the Prescription Drug Plan or PBM, either directly or indirectly, reimbursed the pharmacy for the
claim.
C. Targretin and Panretin
16. Cutaneious T-Cell Lymphoma was a rare disease, accounting for under
approximately five percent of all cases of non-Hodgkin's Lymphoma, that primarily affected the
skin. Targretin was a drug used to treat skin problems arising from Cutaneious T-Cell
Lymphoma.
17. In or around June 2000, Targretin Gel 1% was approved as a new dosage
form for Targretin by the U.S. Food and Drug Administration (the "FDA") as a priority drug for
the topical treatment of cutaneous lesions in patients with Cutaneious T-Cell Lymphoma (stage
5
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IA and IB) who had refractory or persistent disease after other therapies or who had not tolerated
other therapies.
18. The use of Targretin Gel 1% was medically necessary only if other skin-
directed therapies had failed or were contra-indicated for a particular patient.
19. Panretin was a drug used to treat certain skin lesions in Kaposi sarcoma, a
type of cancer related to Acquired Immunodeficiency Syndrome ("AIDS").
20. In or around February 1999, Panretin Gel 0.1 % was approved by the FDA
for the topical treatment of cutaneous lesions in patients with AIDS-related Kaposi's sarcoma.
21. Targretin Gel 1% and Panretin Gel 0.1 % were not legitimate treatments
for the disease caused by the coronavirus that was discovered in or about December 2019
("COVID-19") or any side effects of COVID-19.
22. The Average Wholesale Price for Targretin Gel 1% was in excess of
approximately $34,000 for each 60 gram tube.
23. Due to the relative expense of Targretin Gel 1% and Panretin Gel 0.1 %,
the Prescription Drug Plans imposed prior authorization requirements before permitting
pharmacies to be reimbursed for dispensing these drugs. Prior authorization was a requirement
that a health care provider obtain advance approval from the Prescription Drug Plans to dispense
a prescription drug before submitting a claim for reimbursement. Pursuant to the requirement,
the pharmacy would be paid for dispensing Targretin Gel 1% and Panretin Gel 0.1 % only if the
prescription drug for the beneficiary was pre-approved by the beneficiary's Prescription Drug
Plan.
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D. Special Requirements for Dispensing Medications in a Disaster or Emergency
24. The United States Code of Federal Regulations subjected Prescription
Drug Plans to special requirements during a disaster or emergency. See 42 CPR 422.1 00(m).
A declaration by the governor of a state or protectorate was one of the triggering events for these
special requirements .
25. On or about January 31 , 2020, as a result of the spread of COVID-19
within the United States, the HHS Secretary declared a national public health emergency, and, on
or about March 13, 2020, the President of the United States issued Proclamation 9994 declaring
a national emergency retroactive to March 1, 2020. See 85 Fed. Reg. 15,337. At that time, the
President of the United States determined that COVID-19 was of sufficient severity and
magnitude to warrant an emergency determination under Section 50l(b) of the Robert T.
Stafford Disaster Relief and Emergency Assistance Act, pursuant to Title 42, United States
Code, Sections 5121 -5207. As of December 2020, declarations had been made regarding the
COVID-19 public health emergency in all 50 States, the District of Columbia and the U.S.
Territories, thus triggering the special requirements that are applicable to Prescription Drug
Plans.
26. These special requirements were designed to ensure that beneficiaries
received access to their prescription drug benefits during a disaster or emergency, such as the
COVID-19 pandemic. Prescription Drug Plans were required to, inter alia, waive prior
authorization requirements during a disaster or emergency, including during the COVID-19
public health emergency.
27. A pharmacy that had failed to comply with otherwise applicable
requirements could bill for prescription drugs that were purportedly dispensed to beneficiaries
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during a state of disaster or emergency by using certain billing codes (an "Emergency Override
Code"). One Emergency Override Code allowed a pharmacy to bill and receive reimbursement
for prescription drugs, such as Targretin Gel 1% and Panretin Gel 0.1 %, without receiving the
prior authorization that was generally required.
28 . In addition, during a public health emergency as described in Section
l 135(g)(l)(B) of the Social Security Act, pursuant to Section 3714 of the Coronavirus Aid,
Relief and Economic Security ("CARES") Act, as implemented by CMS, Prescription Drug
Plans were required to relax "refill-too-soon" edits ("Refill-Too-Soon Edits"). Refill-Too-Soon
Edits typically prevented a pharmacy from billing for dispensing multiple prescriptions of the
same medication, such as Targretin Gel I% and Panretin Gel 0.1 %, to a single beneficiary within
a single 30-day period. Pursuant to Section 3714 of the CARES Act, however, Prescription
Drug Plans were required to suspend all quantity and days ' supply limits under 90 days for all
covered Medicare Part D drugs, except for certain exceptions not applicable here.
E. The Defendant and Relevant Entities
29. The defendant PETER KHA IM was a resident of Forest Hills, New York.
30. The defendant ARKADIY KHAIMOV was a resident of Forest Hills,
New York, and the defendant PETER KHAIM's younger brother.
31. Money Launderer 1, an individual whose identity is known to the Grand
Jury, was an international money launderer.
32. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, owned, controlled and operated the following sixteen companies, which were
formed and incorporated under New York State law (the "Scheme Pharmacies"):
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(a) Spring RX was a New York company located at 111-50
Springfield Boulevard, Queens Village, New York;
(b) Zone Pharmacy was a New York company located at 125-20 111 th
Avenue, Jamaica, New York;
(c) GAF Pharmacy was a New York company located at 98-100 E.
165th Street, Bronx, New York;
(d) Mani pal Drugs was a New York company located at 280 Nostrand
Avenue, Brooklyn, New York;
(e) LPM Pharmacy was a New York company located at 7537 Main
Street, Flushing, New York;
(f) Sterling Drugstore was a New York company located at l 16-22A
Metropolitan Avenue, Richmond Hill, New York;
(g) SEY Drugs Inc., which also operated as "Jamaica Pharmacy," was
a New York corporation located at 8924 163rd Street, Jamaica, New York;
(h) JP RX, which also operated as "Maccabi Pharmacy," was a New
York company located at 7618 Jamaica Avenue, Jamaica, New York;
(i) Merrick RX Inc., which also operated as "Bums Pharmacy," was a
New York corporation located at 6804 Bums Street, Forest Hills, New York;
(i) IVS Pharmacy was a New York company located at 185-08 Union
Turnpike, Su ite l 09, Fresh Meadows, New York;
(k) 1105 JTP LLC, which also operated as "Genome Pharmacy," was
a New York company located at 1105 Jericho Turnpike, New Hyde Park, New York;
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(I) Shreeman Pharmacy lnc., which also operated as "Genome
Pharmacy," was a New York corporation located at 1105 Jericho Turnpike, New Hyde Park,
New York;
(m) Malvina Drug Corp. was a New York corporation located at 300
Hempstead Turnpike, Suite 214, West Hempstead, New York;
(n) Merrick Wellness was a New York company located at 126-14
Merrick Boulevard, Suite F, Jamaica, New York;
(o) Albertson Pharmacy was a New York company located at 1028
Willis A venue, Albertson, New York; and
(p) Howard Beach Pharmacy LLC, which also operated as
"OrgaNYC," was a New York company located at 133-40 79th Street, Howard Beach, New
York.
33. The Scheme Pharmacies were registered with the New York State Office
of the Professions as pharmacy establishments.
34. Money Launderer 1 owned, controlled and operated the companies that
were used to launder the proceeds of the fraudulent scheme obtained by the Scheme Pharmacies
(the "Pass-Through Entities"). Many of the Pass-Through Entities contained the word
"wholesale" in their name or were purposefully named after legitimate pharmaceutical wholesale
companies.
II. The Illegal Schemes
A. The Fraudulent Scheme
35 . From in or about and between August 2018 and August 2020, the
defendants PETER KHAIM and ARKADIY KHAlMOV, together with others, obtained
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ownership and control of the Scheme Pharmacies by creating new corporations under New York
State law and acquiring pre-existing pharmacies. KHA IM and KHAIMOV concealed and
disguised their involvement in the Scheme Pharmacies by paying nominee owners to open bank
accounts for the Scheme Pharmacies and by falsely representing their respective ownership
rights to the Scheme Pharmacies, when in fact KHAIM and KHAIMOV owned and controlled
the Scheme Pharmacies and the associated bank accounts. KHAIM and KHAIMOV used the
nominee owners ' means of identification, including, but not limited to, the nominee owners'
names and signatures, to, among other things, submit New York Pharmacy Applications, open
bank accounts and receive and transfer the proceeds of the fraudulent scheme.
36. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, also paid licensed pharmacists to act as Supervising Pharmacists of the Scheme
Pharmacies in name only, when in fact these individuals never performed the duties of a
Supervising Pharmacist.
37. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, then submitted and caused the submission of false and fraudulent New York
Pharmacy Applications for the Scheme Pharmacies that (a) made false representations about the
ownershjp of the Scheme Pharmacies and failed to disclose KHAIM and KHAIMOV's roles as
owners, officers, partners, members and principal stockholders of the Scheme Pharmacies; and
(b) made false and fraudulent representations that certain licensed pharmacists were the
Supervising Phaimacists of the Scheme Pharmacies, even though the licensed pharmacists did
not carry out the roles and responsibilities of a Supervising Pharmacist as required by New York
State law.
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38. As the effects of the COVID-19 pandemic began to be felt in the United
States, the defendants PETER KHAIM and ARKADfY KHAIMOV, together with others,
capitalized on the national emergency for their own financial gain by using the Emergency
Override Code and the relaxation of the Refill-Too-Soon Edits to submit additional false and
fraudulent claims for Targretin Gel 1% and Panretin Gel 0.1 % that were never dispensed by the
Scheme Pharmacies.
39. While the Emergency Override Code was designed to ensure that
beneficiaries received access to needed medications during the COVID-19 public health
emergency, and as the New York metropolitan area became the epicenter of the COVID-19
outbreak in the United States in the spring of 2020, the defendants PETER KHAIM and
ARKADIY KHAIMOV, together with others, fraudulently caused an exponential increase in the
number and value of claims that were submitted by the Scheme Pharmacies for Targretin Gel I%
and Panretin Gel 0.1 %. KHAIM AND KHAIMOV fraudulently submitted and caused the
submission of claims for Targretin Gel 1% and Panretin Gel 0.1 % that were not actually
dispensed by (a) inappropriately overriding the requirement of the Prescription Drug Plans that
the Scheme Pharmacies receive prior authorization before being reimbursed for purportedly
dispensing Targretin Gel 1% and Panretin Gel 0.1 %; and (b) fraudulently overriding the Refill-
Too-Soon Edits of the Prescription Drug Plans in order to submit claims for multiple 30-day
supplies of Targretin Gel 1% and Panretin Gel 0.1 % that were purportedly dispensed to a single
beneficiary. As a result, payments by the Prescription Drug Plans to the Scheme Pharmacies
correspondingly spiked in the months after the declaration of the COVID-19 public health
emergency. For example, payments for Targretin Gel 1% to one of the Scheme Pharmacies,
Zone Pharmacy, increased from an average of under $12,000 per month in the nine months
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preceding COVID-19 to nearly $2 million per month from approximately March 2020 to May
2020.
40. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, submitted and caused the submission, including by interstate wire, of fraudulent
claims for prescription drugs purportedly dispensed by the Scheme Pharmacies. The
prescription drugs KHAIM and KHAIMOV sought reimbursement for were never in fact: (a)
purchased or stocked by the Scheme Pharmacies; (b) dispensed by the Scheme Pharmacies to
beneficiaries; (c) prescribed by the medical professionals who were represented to have
authorized and prescribed them; and (d) medically necessary and reasonable. These
prescriptions included, among other things, Targretio Gel 1% and Panretin Gel 0.1 %.
41. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, also submitted and caused the submission, including via interstate wire, of
fraudulent claims for prescription drugs, including Targretin Gel 1% and Panretin Gel 0.1 %, that
were purportedly dispensed by the Scheme Pharmacies during time periods that the Scheme
Pharmacies were defunct, non-operational , not licensed, without employees and not supervised
by a Supervising Pharmacist as required by New York State law.
42. Moreover, the defendants PETER KHAIM and ARKADIY KHAIMOV,
together with others, sought to conceal and disguise the scheme by, among other things,
(a) creating and causing the creation of the Pass-Through Entities and assigning names to certain
of the Pass-Through Entities to make them appear to be legitimate pharmaceutical wholesale
companies; (b) creating and causing the creation of false references on checks to invoice
numbers to make it appear as if the checks were used by the Scheme Pharmacies to purchase
I
phaimaceutical drugs from the Pass-Through Entities when, in fact, they were not; and (c)
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transferring funds from the Scheme Pharmacies to the Pass-Through Entities that were purported
payments for pharmaceutical drugs, including Targretin Gel I% and Panretin Gel 0.1 %,
purportedly dispensed by the Scheme Pharmacies to the Pass-Through Entities, when, in fact, no
drugs were purchased or dispensed.
43. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, submitted and caused the submission, including via interstate wire, of over $39
million in claims for Targretin Gel I% and $6 million in claims for Panretin Gel 0.1 % to the
Prescription Drug Plans, including claims that were medically unnecessary and not ordered by a
medical professional, as represented in the submitted claims, and never provided to the
beneficiary by the Scheme Pharmacies.
B. The Money Laundering Scheme
44. From in or about and between September 2019 and August 2020, the
defendants PETER KHAIM and ARKADIY KHAIMOV, along with others, caused Money
Launderer I to create or otherwise establish or acquire the Pass-Through Entities to further their
fraudulent scheme. KHAIM and KHAIMOV, together with others, assigned names to certain of
the Pass-Through Entities to closely resemble the names of real pharmaceutical wholesale
companies. Moreover, KHAIM and KHAIMOV, together with others, paid and caused
payments to be made to various individuals to open bank accounts for the Pass-Through Entities.
In order to open the bank accounts, the individuals made false statements to financial institutions
and others about the ownership of the Pass-Through Entities.
45. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, concealed and disguised the nature, location, source, ownership and control of the
proceeds from the fraudulent scheme by causing the transfer of the fraud proceeds from the
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Scheme Pharmacies to the Pass-Through Entities, from which KHAIM, KHAIMOV and their
co-conspirators sent money to other bank accounts in the United States and abroad.
46. The defendants PETER KHAIM and ARKADIY KHAIMOV, together
with others, also created and caused the creation of references on checks for payment of
fabricated or non-existent invoices to make it appear like the Scheme Pharmacies were
purchasing pharmaceutical drugs from the Pass-Through Entities when they in fact were not.
47. In the first phase of the scheme, PETER KHAIM and ARKADIY
KHAIMOV, along with others, dissipated, transformed and concealed the nature, source,
location, ownership, control and origin of the fraud proceeds by causing the Pass-Through
Entities to wire funds to companies in China to pay for goods purportedly ordered by businesses
in Uzbekistan. These funds were in turn used to pay certain individuals in Uzbekistan who were
designated by customers of an unlicensed money services business in Queens, New York. In
exchange, KHAIM and KHAIMOV, along with others, received a corresponding amount of cash
from Money Launderer 1, minus a commission, that was supplied by members of the Uzbek
community to the unlicensed money services business for transfer to certain individuals in
Uzbekistan.
48. In the second phase of the scheme, when the reimbursements paid by the
Prescription Drug Plans for Targretin Gel 1% and Panretin Gel 0.1% exceeded the amount of
cash available to the unlicensed money services business, the defendants PETER KHAIM and
ARKADIY KHAIMOV, together with others, including Money Launderer 1, dissipated,
transformed and concealed the nature, source, location, ownership, contro l and origin of the
fraud proceeds by causing the nominee account signatories on the Pass-Through Entities to (a)
withdraw cash and have it delivered, at times in the middle of the night, to KHAIMOV and his
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relatives; and (b) purchase millions of dollars in certified checks and write personal checks made
payable to KHAIMOV and KHAIM, their relatives, other individuals designated by KHAIMOV
and companies under KHAIMOV and KHAIM's control.
49. The defendants PETER KHAIM and ARKADIY KHAIMOV dissipated
the fraud proceeds by transferring such proceeds to family members and others, investing such
proceeds in real estate located in the United States and abroad and purchasing jewelry and other
luxury items.
COUNT ONE
(Conspiracy to Commit Health Care Fraud and Wire Fraud)
50. The allegations contained in paragraphs one through 49 are realleged and
incorporated as if fully set forth in this paragraph.
51. In or about and between October 2018 and December 2020, both dates
being approximate and inclusive, within the Eastern District of New York and elsewhere, the
defendants PETER KHAIM and ARKADIY KHAIMOV, together with others, did:
(a) knowingly and willfully conspire to execute a scheme and artifice
to defraud one or more health care benefit programs, as defined in Title 18, United States Code,
Section 24(b ), to wit: the Prescription Drug Plans, and to obtain by means of one or more
materially false and fraudulent pretenses, representations and promises, money and property
owned by, and under the custody and control of, said health care benefit programs, in connection
with the delivery of and payment for health care benefits, items and services, contrary to Title
18, United States Code, Section 1347; and
(b) knowingly and intentionally conspire to devise a scheme and
artifice to defraud the Prescription Drug Plans, and to obtain money and property from them by
means of one or more materially false and fraudulent pretenses, representations and promises,
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and for the purpose of executing such scheme and aitifice, to transmit and cause to be
transmitted by means of wire communications in interstate commerce writings, signs, signals,
pictures and sounds, contrary to Title 18, United States Code, Section 1343 .
(Title 18, United States Code, Sections 1349 and 3551 et~-)
COUNT TWO
(Conspiracy to Commit Money Laundering)
52. The allegations contained in paragraphs one through 49 are realleged and
incorporated as if fully set forth in this paragraph.
53. In or about and between September 2019 and December 2020, both dates
being approximate and inclusive, within the Eastern District of New York and elsewhere, the
defendants PETER KHAIM and ARKADIY KHAIMOV, together with others, did knowingly
and intentionally conspire to commit offenses under Title 18, United States Code, Sections 1956
and 1957, to wit:
(a) to conduct and attempt to conduct financial transactions involving
the proceeds of one or more specified unlawful activities, to wit: (i) wire fraud, in violation of
Title 18, United States Code, Section 1343; (ii) health care fraud, in violation of Title 18, United
States Code, Section 1347; and (iii) conspiracy to commit health care fraud, in violation of Title
18, United States Code, Section 1349, knowing that the property involved in the transactions
represented the proceeds of some form of unlawful activity, and knowing that the transactions
were designed in whole and in part to conceal and disguise the nature, location, source,
ownership and control of the proceeds of the specified unlawful activity, contrary to Title 18,
United States Code, Section 1956(a)(l)(B)(i);
(b) to transport, transmit and transfer, and attempt to transport,
transmit and transfer monetary instruments and funds from a place in the United States to and
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through a place outside of the United States, knowing that the monetary instruments and funds
involved in the transportation, transmission and transfer represented the proceeds of some form
of unlawful activity, and knowing that such transportation, transmission and transfer was
designed in whole and in part to conceal and disguise the nature, location, source, ownership and
control of the proceeds of the specified unlawful activity, to wit: (i) wire fraud, in violation of
Title 18, United States Code, Section 1343; (ii) health care fraud, in violation of Title 18, United
States Code, Section 1347; and (iii) conspiracy to commit health care fraud, in violation of Title·
18, United States Code, Section 1349, contrary to Title 18 United States Code, Section
l 956(a)(2)(B)(i); and
(c) to engage and attempt to engage in one or more monetary
transactions in criminally derived property of a value greater than $10,000 and derived from one
or more specified unlawful activities, to wit: (i) wire fraud , in violation of Title 18, United States
Code, Section 1343; (ii) health care fraud , in violation of Title 18, United States Code, Section
1347; and (iii) conspiracy to commit health care fraud , in violation of Title 18, United States
Code, Section 1349, contrary to Title 18, United States Code, Section 1957.
(Title 18, United States Code, Sections l 956(h) and 3551 et seq.)
COUNTS THREE THROUGH SIX
(Concealment Money Laundering)
54. The allegations contained in paragraphs one through 49 are realleged and
incorporated as if fully set forth in this paragraph.
55. On the dates set forth below, within the Eastern District of New York and
elsewhere, the defendants PETER KHAIM and ARKADIY KHAIMOV, together with others,
did knowingly and intentionally conduct and attempt to conduct one or more financial
transactions affecting interstate and foreign commerce, which financial transactions involved the
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proceeds of one or more specified unlawful activities, to wit: (i) wire fraud, in violation of Title
18, United States Code, Section 1343; (ii) and health care fraud, in violation of Title 18, United
States Code, Section 134 7, knowing that the property involved in such transactions represented
the proceeds of some form of unlawful activity, and knowing that such transactions were
designed in whole and in part to conceal and disguise the nature, location, source, ownership,
and control of the proceeds of one or more of the specified unlawful activities, as set forth below:
A1mroximate
Count Defendant Transaction
Date
Deposit of a cashier's check number
1371712276 in the approximate amount of
PETER $280,000 into account number ending in
THREE May 18, 2020
KHAIM 7356, belonging to PETER KHAIM, and
drawn on account number ending in 1955
Deposit of check number 100 in the
approximate amount of $20,000, and drawn
PETER
FOUR January 13, 2020 on Zone Pharmacy account number ending
KHAIM
2008
Deposit of a cashier's check number
115678669 in the approximate amount of
$200,000 into account number ending in
ARKADIY 6644, belonging to ARKADIY KHAIMOV,
FIVE April 17, 2020
KHAIMOV and drawn on the account of Company 1, an
entity the identity of which is known to the
Grand Jury
Transfer of approximately $1 ,000,000 from
account number ending 6644, belonging to
ARKADIY ARKADIY KHAIMOV, to account number
SIX May 28, 2020
KHAIMOV ending in 7707, belonging to Relative 1, a
relative of ARKADIY KHAIMOV whose
identity is known to the Grand Jury
(Title 18, United States Code, Sections 1956(a)(1)(B)(i), 2 and 3551 et §.ffi.)
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COUNT SEVEN
(Aggravated Identity Theft)
56. The allegations contained in paragraphs one through 49 are realleged and
incorporated as if fulty set forth in this paragraph.
57. In or about and between March 2020 and May 2020, both dates being
approximate and inclusive, within the Eastern District of New York and elsewhere, the defendant
PETER KHAIM, together with others, during and in relation to the crime charged in Count One,
did knowingly and intentionally transfer, possess and use, without lawful authority, any means of
identification of one or more other person, to wit: John Doe, an individual whose identity is
known to the Grand Jury, knowing that the means of identification belonged to another person.
(Title 18, United States Code, Sections 1028(A)(a)(l), 1028A(b), 1028A(c)(5), 2
and 3551 et~-)
CRIMINAL FORFEITURE ALLEGATION AS TO COUNT ONE
58. The United States hereby gives notice to the defendants that, upon their
conviction of the offense charged in Count One, the government will seek forfeiture in
accordance with Title 18, United States Code, Section 982(a)(7), which requires any person
convicted of a federal health care offense to forfeit property, real or personal, that constitutes, or
is derived directly or indirectly from, gross proceeds traceable to the commission of such
offense.
59. If any of the above-described forfeitable property, as a result of any act or
omission of the defendants:
(a) cannot be located upon the exercise of due diligence;
(b) has been transferred or sold to, or deposited with, a third party;
(c) has been placed beyond the jurisdiction of the court;
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(d) has been substantially diminished in value; or
(e) has been commingled with other property which cannot be divided
without difficulty;
it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p), as
incorporated by Title 18, United States Code, Section 982(b)(l), to seek forfeiture of any other
property of the defendants up to the value of the forfeitable property described in this forfeiture
allegation.
(Title 18, United States Code, Sections 982(a)(7) and 982(b)(l); Title 21, United
States Code, Section 853(p))
CRIMINAL FORFEITURE ALLEGATION AS TO COUNTS TWO THROUGH SIX
60. The United States hereby gives notice to the defendants that, upon their
conviction of any of the offenses charged in Counts Two through Six, the government will seek
forfeiture in accordance with Title 18, United States Code, Section 982(a)(l), which requires any
person convicted of such offenses to forfeit any property, real or personal , involved in such
offenses, or any property traceable to such property.
61. If any of the above-described forfeitable property, as a result of any act or
omission of the defendants:
(a) cannot be located upon the exercise of due diligence;
(b) has been transferred or sold to, or deposited with, a third party;
(c) has been placed beyond the jurisdiction of the court;
(d) has been substantially diminished in value; or
(e) has been commingled with other property which cannot be divided
without difficulty;
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it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p), as
incorporated by Title 18, United States Code, Section 982(b)(l), to seek forfeiture of any other
property of the defendants up to the value of the forfeitable property described in this forfeiture
allegation.
(Title 18, United States Code, Sections 982(a)(l) and 982(b)(l); Title 21, United
States Code, Section 853(p))
FOREPERSON
MAR.Kl SKO
ACTING ~DSTATESATTORNEY
EASTERN DISTRICT OF NEW YORK
:c?- ~\ K~ ~--- / trJe-
DANIEL KAHN
ACTING CHIEF, FRAUD SECTION
CRIMINAL DIVISION
U.S. DEPARTMENT OF JUSTICE
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F. # 2020R0l 145
FORM DB D-34 No.
JUN. 85
UNITED STATES DISTRICT COURT
EASTERN District of NEW YORK
CRIMINAL DIVISION
THE UNITED STATES OF AMERICA
vs.
PETERKHAIM
and
ARKADIY KHAIMOV,
Defendants.
SUPERSEDING INDICTMENT
(T. 18, U.S.C., §§ 982(a)(l), 982(a)(7), 982(b)(l), 1028A(a)(l), 1028A(b),
1028A(c)(5), 1349, 1956(a)(l)(B)(i), 1956(h), 2 and 3551 et seq. ; T. 21 ,
U.S .C., § 853(p))
A true bill.
Filed in open court th is __ ________ _ ____ _ _ day,
of _ ___ _____ _ _ _ A. D. 20 __ _ _ _
Clerk
Bail, $ _______________ _ ______________ _ ___ _
Andrew Estes, Trial Attorney (718) 254-6250
23
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