United States v. Arkadiy Khaimov: Government Letter in Anticipation of Sentencing (E.D.N.Y., March 26, 2024)

Summary

The government's sentencing letter of March 26, 2024 to Judge Ann M. Donnelly in United States v. Arkadiy Khaimov, Criminal Docket No. 20-580 (AMD), filed as Document 116 in Case 1:20-cr-00580-AMD in the U.S. District Court for the Eastern District of New York. It states that Khaimov pleaded guilty on November 16, 2022 to Count 2, money laundering conspiracy under 18 U.S.C. § 1956(h). The government argues that Khaimov and his brother Peter Khaim used at least 16 Scheme Pharmacies to bill Medicare for Targretin and Panretin gels during the COVID-19 emergency, and that Khaimov coordinated laundering of the proceeds with Money Launderer 1. It asks for a sentence within a Guidelines range of 97 to 121 months, restitution of $18,921,139.21 to Medicare and forfeiture of $9,647,506.08. It is signed /s/ by Trial Attorney Arun Bodapati.

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Cite this document

“United States v. Arkadiy Khaimov: Government Letter in Anticipation of Sentencing (E.D.N.Y., March 26, 2024).” Original at ecf.nyed.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/sentencing-memorandum-usa-v-khaim-dkt-116-e-d-n-y-96418e0e19/, SHA-256 4becb7933e0e35796f2fc2dc43bdd62f29cd833c674e1bbf601284c94357fd5a.

Full text

Case 1:20-cr-00580-AMD Document 116 Filed 03/26/24 Page 1 of 11 PageID #: 1124

U.S. Department of Justice

United States Attorney
Eastern District of New York
JPL/TJT:AB 271 Cadman Plaza East
F. #2020R01145 Brooklyn, New York 11201

March 26, 2024
By ECF

The Honorable Ann M. Donnelly
United States District Judge
United States District Court
Eastern District of New York
225 Cadman Plaza East
Brooklyn, NY 11201

Re: United States v. Arkadiy Khaimov,
Criminal Docket No. 20-580 (AMD)

Dear Judge Donnelly:

The government respectfully submits this letter in anticipation of sentencing in
the above-captioned case, which is scheduled for Wednesday, April 3, 2024, at 10:00 a.m. On
November 16, 2022, the defendant pleaded guilty to Count 2 of the Superseding Indictment,
which charged him with money laundering conspiracy, in violation of 18 U.S.C. § 1956(h). That
money laundering conspiracy enabled the defendant and his brother to steal almost 19 million
dollars from Medicare, as they exploited the relaxation of antifraud safeguards during the
COVID-19 pandemic for their own personal benefit.

In light of the seriousness of the offense and the harm caused to a vital healthcare
benefit program, the government respectfully submits that a sentence within the applicable
United States Sentencing Guidelines (“U.S.S.G.” or “Guidelines”) range of 97 to 121 months’
imprisonment is sufficient, but not greater than necessary, to achieve the goals of sentencing.
See 18 U.S.C. § 3553(a). The government also respectfully submits that the Court should order
the defendant to pay restitution in the amount of $18,921,139.21 to Medicare, and a forfeiture
money judgment in the amount of $9,647,506.08, as set forth in the Court’s March 21, 2023
preliminary order of forfeiture (ECF No. 83).

I. Background

A. The Fraudulent Scheme

From 2018 through 2020, Arkadiy Khaimov and his brother Peter Khaim engaged
in a fraudulent scheme involving no less than 16 pharmacies across New York City (the
“Scheme Pharmacies”). (October 16, 2023 Presentence Investigation Report (“PSR”) ¶¶ 24, 26).
Case 1:20-cr-00580-AMD Document 116 Filed 03/26/24 Page 2 of 11 PageID #: 1125

While Khaim and Khaimov opened and controlled the Scheme Pharmacies, they concealed their
involvement by paying nominee owners to open bank accounts for the pharmacies and falsely
represent their ownership. (PSR ¶ 26). The defendants also recruited and paid others to pretend
that they were supervising pharmacists of the Scheme Pharmacies. (PSR ¶ 26). Many of the
Scheme Pharmacies were simply false fronts themselves, without regular pharmacy business.
(PSR ¶ 26). To further enable their scheme, the defendants caused the submission of fraudulent
documents that falsely represented the owners and supervising pharmacists to the New York
State Board of Pharmacy Licensing (the “Pharmacy Board”), pharmacy benefit managers, and
insurance plans. (PSR ¶¶ 26). The defendants likewise caused the submission of fraudulent
New York Pharmacy Applications with the same misrepresentations. (PSR ¶ 27).

The defendants, together with other members of the conspiracy, then used the
Scheme Pharmacies to submit claims for prescription drugs that were not actually (a) purchased
or stocked by the Scheme Pharmacies; (b) dispensed to beneficiaries; (c) prescribed by the
medical professionals who purportedly gave their authorization; and (d) medically necessary and
reasonable. (PSR ¶ 28). Khaim and Khaimov caused these submissions even when the Scheme
Pharmacies were not supervised, licensed, or even operational. (PSR ¶ 28).

The predicate healthcare fraud conspiracy included the submission of claims for
Targretin Gel 1% (“Targretin”) and Panretin Gel 0.1% (“Panretin”), two expensive drugs used to
treat skin problems arising from Cutaneious T-Cell Lymphoma and Kaposi Sarcoma
respectively. (PSR ¶¶ 17-18, 20, 28). To prevent fraudulent billing for these lucrative and
specialized cancer medications, prescription drug plans required pharmacies to seek their prior
authorization and furthermore prohibited pharmacies from billing for multiple refills to a single
beneficiary within a 30-day period (the “Refill-Too-Soon Edits”). (PSR ¶¶ 20, 23). However,
federal regulations provided for the relaxation of these general restrictions during public health
emergencies, to ensure that the medications remained available to beneficiaries in need. (PSR ¶¶
21-23).

Khaim and Khaimov exploited the COVID-19 health emergency to cause the
submission of fraudulent claims for the two gels, which were neither legitimate treatments for
COVID-19 nor actually dispensed by the Scheme Pharmacies. (PSR ¶¶ 19, 30). Khaim,
Khaimov, and others caused an exponential increase in claims for these expensive drugs just as
New York became the epicenter of the pandemic. (PSR ¶ 30). For example, at just one of the
Scheme Pharmacies, payments for Targretin increased from an average of less than $12,000 per
month prior to COVID-19 to nearly $2 million per month from approximately March 2020 to
May 2020. (PSR ¶ 30). Between December 2018 and July 2020, Khaim and Khaimov used the
Scheme Pharmacies to submit over $45 million in claims for Targretin and Panretin to Medicare
Part D plans. (PSR ¶ 31).

B. The Money Laundering Conspiracy

Khaim, Khaimov, and their coconspirators concealed the scheme and fraudulently
obtained proceeds by using at least 14 entities with names that closely resembled those of
legitimate pharmaceutical wholesale companies (the “Pass-Through Entities”). (PSR ¶¶ 25, 29).
The defendants and their coconspirators would write checks from the Scheme Pharmacies’
accounts to the Pass-Through Entities, including references to purported invoices for goods or

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services that were not actually provided. (PSR ¶ 29). These checks would typically also feature
the stamped signatures of the nominee owners, including one nominee owner who had died
before purportedly signing the check. (PSR ¶ 29).
Initially, the defendants and coconspirators laundered the fraudulent proceeds by
causing the Pass-Through Entities to wire funds to companies in China, which would then pass
the funds to individuals in Uzbekistan who were associated with an unlicensed money services
business in Queens. (PSR ¶ 32). Khaim and Khaimov then received a corresponding amount of
cash from a coconspirator (“Money Launderer 1”) minus a commission. (PSR ¶ 32).
Eventually, as the fraudulently obtained reimbursements exceeded the amount of cash available
through the unlicensed money services business, the defendants and coconspirators laundered the
proceeds by causing the Pass-Through Entities’ nominee owners to (a) withdraw cash and have it
delivered, sometimes in the night, to Khaimov and his relatives, and (b) purchase millions of
dollars in certified checks and write personal checks to Khaimov, Khaim, and others including
their relatives. (PSR ¶ 33).

The defendants, together with others, laundered $18.9 million from the Scheme
Pharmacies’ bank accounts to the accounts of the Pass-Through Entities, as well as accounts
controlled by Khaim and Khaimov personally. (PSR ¶ 34). Khaim and Khaimov further
dissipated the proceeds through transfers to family members, real estate investments in the
United States and abroad, purchases of jewelry and other luxury items, and payments for
personal expenses such as tennis clubs and architects. (PSR ¶ 34).

C. Khaimov’s Role

Khaimov was responsible for coordinating the money laundering operations of the
Scheme Pharmacies with Money Launderer 1. (PSR ¶ 40). Khaimov regularly provided Money
Launderer 1 with checks from the Scheme Pharmacies, which typically referred to fictitious
invoices and bore the stamped signatures of the nominal account holders. (PSR ¶ 40). Money
Launderer 1 then delivered cash or checks to Khaimov while keeping a fee of approximately 5%
of the check amount. (PSR ¶ 40). Khaimov and Money Launderer 1 frequently communicated
by WhatsApp messaging regarding the exchange of the checks from the pharmacies to the Pass-
Through Entities. (PSR ¶ 40). To better conceal the money laundering and fraud at the Scheme
Pharmacies, Khaimov also told Money Launderer 1 to create or use entities with names that
resembled real wholesalers or included words like “wholesale.” (PSR ¶ 41).

Although Khaimov primarily focused on the money laundering side of the
broader scheme, he was also involved with the Scheme Pharmacies’ underlying operations.
(PSR ¶ 43). Among other things, Khaimov recruited an individual to act as the nominee owner
of a pharmacy, agreeing to pay the nominee owner $3,000 per month to act as an owner without
assuming any of the corresponding obligations. (PSR ¶ 43). Khaimov also visited the Scheme
Pharmacies and met with the purported owners, further underscoring his awareness of and
involvement in the broader scheme. (PSR ¶ 43). In total, Khaimov was personally involved in
receiving and laundering at least $9,647,506.08 from the scheme. (PSR ¶ 42).

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D. Guilty Plea

On November 16, 2022, Khaimov pleaded guilty to Count 2 of the Superseding
Indictment. During his allocution, Khaim acknowledged that between September 2019 and
December 2020, he “agreed with others to launder funds that were the proceeds of illegal
activities that various pharmacies were engaged in including wire fraud,” that he “would receive
checks from pharmacies and provide these checks” to a coconspirator who “deposited the
pharmacy checks in various accounts and returned cash,” and that Khaimov “would then give the
cash back to the pharmacies. These transactions were designed to conceal the nature of unlawful
activity that the pharmacies had engaged in.” (Nov. 16, 2022 Tr. 17).

II. The Defendant’s Guidelines Range

A. The PSR and Government’s Calculations

The PSR calculated a total offense level of 32 for the defendant. (PSR ¶¶ 50–60;
January 23, 2024 Addendum to the PSR (the “Addendum”) (striking the enhancement listed at
PSR ¶ 55). The PSR’s offense level is based on the following calculations:
Base Offense Level: 6 (§2S1.1(a)(1)) 6
Plus: Intended Loss above $25,000,000 (§§2S1.1(a)(1), +22
2B1.1(b)(1)(L))
Plus: Conviction under 18 U.S.C. § 1956 (§2S1.1(b)(2)(B)) +2
Plus: Sophisticated laundering (§2S1.1(b)(3)) +2
Plus: Manager or supervisor (§3B1.1(b)) +3
Subtotal: 35
Minus: Acceptance of responsibility (§3E1.1) -3
Total: 32

The PSR estimated that the defendant falls into criminal history category (“CHC”) II, resulting in
an advisory sentencing range of 135 to 168 months’ imprisonment. (PSR ¶¶ 62-65, Addendum).
While the government agrees with the substantial majority of the PSR’s findings,
it adheres to the terms of its plea agreement, which did not include the three-level aggravating
role enhancement under U.S.S.G. § 3B1.1(b) in its estimate. For clarity, the government’s
estimated offense level is as follows:
Base Offense Level: 8 (§2S1.1(a)(2)) 8
Plus: Laundered funds above $9,500,000 (§§2S1.1(a)(2), +20
2B1.1(b)(1)(K))
Plus: Conviction under 18 U.S.C. § 1956 (§2S1.1(b)(2)(B)) +2
Plus: Sophisticated laundering (§2S1.1(b)(3)) +2
Subtotal: 32
Minus: Acceptance of responsibility (§3E1.1) -3
Total: 29

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The government agrees with the finding that the defendant falls into CHC II, and therefore
calculates the Guidelines range as 97 to 121 months’ imprisonment.
B. The Defendant’s Objections

In his sentencing submission, Khaimov disputes (1) the calculation of his offense
level; and (2) the assessment that he falls into CHC II. The government addresses each below.
1. The Defendant’s Offense Level
First, Khaimov challenges Probation’s decision to calculate his base offense level
by reference to Guidelines Section 2S1.1(a)(1), rather than 2S1.1(a)(2). See Defense Submission
at 3–4. According to Khaimov, this is incorrect because he did not participate in the health care
fraud conspiracy at all. See id. Khaimov adds that Probation therefore calculated his offense
level by reference to an “inflated loss amount.” Id. at 4.
The government adheres to the terms of its plea agreement, which calculated
Khaimov’s base offense level by reference to Guidelines Section 2S1.1(a)(2) rather than
2S1.1(a)(1). However, the government notes that under either calculation, the base offense level
and loss enhancement still amount to 28. See supra Section II.A. (noting Probation’s calculation
of a base offense level of six plus a 22-point increase for intended loss under Section 2S1.1(a)(1),
and the parties’ calculation of a base offense level of 8 and a 20-point increase for funds
laundered under Section 2S1.1(a)(2)). Even if the Court focuses solely on the value of the funds
laundered, rather than the $45 million billed to Medicare, that would not impact Khaimov’s
offense level. Khaimov’s argument that the intended loss figure overstates his culpability is a
red herring, and it does not warrant a downward variance.
More importantly, the government does not agree that Khaimov had no
involvement in the underlying scheme to defraud. As noted above, he met with the nominee
owners of the Scheme Pharmacies, and he recruited at least one of them to deceive the Pharmacy
Board and thus enable his co-conspirators’ fraudulent billing. Moreover, the money laundering
and healthcare fraud conspiracies did not take place in siloed vacuums. They were two halves of
one whole, and Khaimov knew his money laundering activities furthered the healthcare fraud.
He encouraged Money Launderer 1 to create Pass-Through Entities with names resembling those
of real pharmaceutical wholesalers, and included references to fictitious invoices on checks from
the Scheme Pharmacies to the Pass-Through Entities, to create the appearance that the Scheme
Pharmacies were engaged in legitimate business rather than fraud. Even if Khaimov was not the
leader of the healthcare fraud conspiracy, he played his part in ensuring its success. 1

1
The defendant also frequently references the government’s initial position that he faced an
enhancement under Guidelines Section 3C1.3, which may apply where a defendant committed an
offense while on pretrial release. As the defendant notes, the government is not seeking that
enhancement now. But for clarity of the record, the government does not “concede[] Mr.
Khaimov did not engage in criminal conduct after his arrest on the Azrack Indictment.” Defense
Submission at 5. To the contrary, in connection with his guilty plea, the defendant allocuted to
committing the offense of conviction through December 2020, that is, at least in part after being
arrested and released on bond in the summer of 2020 in connection with United States v.

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2. The Defendant’s Criminal History Category
Khaimov argues that Probation’s CHC calculation overstates his culpability and
thus deprives him of a two-point reduction to his offense level under Guidelines Section 4C1.1.
That argument is baseless. CHC II appropriately reflects the gravity of Khaimov’s multiple
offenses, and he is not a zero-point offender.
Khaimov claims that the conduct alleged in the Superseding Indictment is
substantially the same conduct to which he pleaded guilty in United States v. Khaimov, 20-CR-
267 (E.D.N.Y.) (JMA). 2 According to Khaimov, the offenses are effectively one and the same
because “they occurred in the same district, during the same time period, and involved
essentially the same scheme.” Defense Submission at 5.
Khaimov’s claim is patently false, on several levels. The Superseding Indictment
and “Azrack Indictment” differ in at least five significant ways: (1) time period, (2) counts
charged, (3) victims, (4) drugs, and (5) means of committing the fraud. The Azrack Indictment
charged Khaimov with conspiracy to commit mail and wire fraud between February 2017 and
July 2018. See 20-CR-267, ECF No. 7, at ¶¶ 13–14. In that case, Khaimov and his co-
conspirators victimized the pharmaceutical manufacturer of a drug that is neither Targretin nor
Panretin by abusing the manufacturer’s privately-offered co-pay program. See generally id. In
contrast, the Superseding Indictment charged Khaimov with (1) a conspiracy to commit
healthcare fraud and wire fraud between October 2018 and December 2020; (2) conspiracy to
commit money laundering between September 2019 and December 2020; and (3) two
substantive counts of money laundering in 2020. See ECF No. 32. In this case, Khaimov and
his co-conspirators victimized Medicare through fraudulent claims for Targretin and Panretin,
and they accomplished this through the abuse of emergency override codes and federal
regulations meant to ensure access to medications during public health emergencies.
In short, there is no basis to treat the offenses as the same. On the contrary, as
Probation recognized, “that the defendant engaged in the instant offense soon after his
involvement in another serious fraud scheme is notable and speak[s] to the need for specific
deterrence, which is appropriately represented by the criminal history category as calculated.”
Addendum. The only real commonality between Khaimov’s prior offense and the instant one is
his willingness to profit from the fraudulent abuse of pharmacies, no matter how that undermines
public and private efforts to ensure greater access to healthcare.

Khaimov, 20-CR-267 (E.D.N.Y.) (JMA). Notwithstanding, the government does not seek a
Fatico hearing on this issue.
2
Khaimov was sentenced to 51 months’ imprisonment in that case; his surrender date has been
adjourned pending sentencing in this case. (PSR ¶ 63). The Government agrees with Probation
that the sentence imposed here should run consecutively to the sentence already imposed there.

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III. A Significant Sentence of Incarceration Is Appropriate

A. Legal Standard
While the Guidelines are advisory rather than mandatory, district courts are still
“require[d] . . . to consider Guidelines ranges” in determining sentences. United States v.
Booker, 543 U.S. 220, 245 (2005); see 18 U.S.C. § 3553(a). The Supreme Court has elucidated
the proper procedure for sentencing courts to follow in light of Booker: “[A] district court should
begin all sentencing proceedings by correctly calculating the applicable Guidelines range. As a
matter of administration and to secure nationwide consistency, the Guidelines should be the
starting point and the initial benchmark.” Gall v. United States, 552 U.S. 38, 49 (2007) (citation
omitted). Next, a sentencing court should “consider all of the § 3553(a) factors to determine
whether they support the sentence requested by a party. In so doing, [the Court] may not
presume that the Guidelines range is reasonable. [The Court] must make an individualized
assessment based on the facts presented.” Id. at 50 (citation and footnote omitted).
The Section 3553(a) factors that the Court must consider in sentencing the
defendant include: (1) the nature and circumstances of the offense and the history and
characteristics of the defendant; (2) the need for the sentence imposed to (a) reflect the
seriousness of the offense, to promote respect for the law and to provide just punishment, (b)
afford adequate deterrence to criminal conduct, (c) protect the public from further crimes of the
defendant, and (d) provide the defendant with appropriate education or vocational training; (3)
the kinds of sentences available; (4) the Guidelines range; (5) pertinent policy statements of the
Sentencing Commission; (6) the need to avoid unwarranted sentencing disparities; and (7) the
need to provide restitution.
B. Application of Law

The government respectfully requests that the Court impose a term of
imprisonment within the adjusted Guidelines range of 97 to 121 months. A sentence within that
range is sufficient but not greater than necessary to achieve the goals of sentencing, and it would
appropriately reflect important factors including the nature and circumstances of the offense, the
need to promote respect for the law, and the need for specific and general deterrence. See 18
U.S.C. § 3553(a).
1. The Seriousness of the Offense, and Promoting Respect for the Law
The defendant’s participation in this scheme shows a general lack of respect for
the law. A Guidelines sentence is the just punishment for his efforts to profit from the
exploitation of federal healthcare programs.

Money laundering is a serious offense that plays a critical role in the promotion
and concealment of a range of lucrative crimes. As detailed in the Superseding Indictment, the
defendant’s money laundering conspiracy aimed to siphon millions of dollars obtained through
wire and healthcare fraud. Fraud against Medicare and Medicaid is itself a serious offense that
targets national programs relied on by millions of Americans. Congress aptly summarized the
effects of healthcare fraud over forty-five years ago:

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In whatever form it is found, . . . fraud in these health care financing
programs adversely affects all Americans. It cheats taxpayers who
must ultimately bear the financial burden of misuse of funds in any
government-sponsored program. It diverts from those most in need,
the nation’s elderly and poor, scarce program dollars that were
intended to provide vitally needed quality health services.
H.R. 95-393, pt. II, at 44 (1977); see also H.R. Rep. 104-747 (1996) (“Everyone pays the price
for health care fraud: beneficiaries of Government health care insurance such as Medicare and
Medicaid pay more for medical services and equipment; consumers of private health insurance
pay higher premiums; and taxpayers pay more to cover health care expenditures.”). These
concerns are just as pressing today, which is why Congress has enacted increasingly severe
penalties for health care fraud, most recently directing the Sentencing Commission to add
enhancements for defendants who commit the most financially serious health care frauds. See
Patient Protection and Affordable Care Act, Pub. L. No. 111-148, §10606(a)(2)(C), 124 Stat.
119, 1007 (2010) (directing Sentencing Commission to amend guidelines in order to punish
health care fraud more severely).

The conspiracies charged in the Superseding Indictment implicate all the
foregoing concerns. Khaimov and his co-conspirators’ efforts resulted in the submission of over
$45 million worth of claims to Medicare for two drugs alone, and their extensive money
laundering network enabled them to collectively steal almost $20 million from Medicare as a
result. Khaimov’s gain is a loss for the programs designed to serve those most in need of quality
healthcare. A sentence within the Guidelines range would properly punish Khaimov’s disregard
for the law.
2. The Nature and Circumstances of the Offense
Money laundering and healthcare fraud are always serious, but the offense
conduct here is surpassingly so. From its inception, the scale and complexity of the overall
scheme here went well beyond most others. The members of the conspiracy coordinated and
paid recruiters, nominal owners, and licensed pharmacists to collectively deceive the Pharmacy
Board, pharmacy benefit managers, and insurance plans into believing that at least sixteen of
their pharmacies were legitimate businesses. Peter Khaim was undoubtedly the leader of this
activity, but Khaimov also met with the nominal owners of the Scheme Pharmacies and recruited
at least one of them himself. He played his part to help set up the scheme.

The fraudulent activity at the Scheme Pharmacies that he enabled focused on
specialized medication for serious ailments. Targretin and Panretin target the side effects of
specific and/or rare forms of cancer, and Targretin is to be used only where other therapies have
failed or are contra-indicated. (PSR ¶ 16). These drugs are predictably expensive as a result,
with one tube of Targretin costing approximately $34,000 on average wholesale. (PSR ¶ 19).
Needlessly billing Medicare millions for these rare treatments depletes the funds available to
beneficiaries who actually need the medications, and it raises the costs for the broader public to
fund similar expenses in the future. Submitting false and fraudulent claims for dispensing
prescription drugs to vulnerable beneficiaries also creates a record that could complicate their
treatment in the future.

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Worse still, the defendant and his coconspirators capitalized on the COVID-19
pandemic to siphon exponentially more money from the public. As noted above, payments for
Targretin at one of the Scheme Pharmacies increased from an average of less than $12,000 per
month to nearly $2 million per month at the start of the public health emergency. This was
possible only because the defendant and his coconspirators took advantage of the relaxation of
Refill-Too-Soon Edits and prior authorization requirements, which federal regulations allowed
solely to ensure that those in need could still receive their medications amid the disruptions of a
global pandemic. Khaimov personally profited from the exploitation of this well-intentioned
measure.

To conceal and perpetuate this scheme, Khaimov and his coconspirators used no
less than fourteen Pass-Through Entities that were named to resemble legitimate medical
wholesalers. Khaimov personally suggested the use of these misleading names, and he
encouraged Money Launderer 1 to continue creating Pass-Through Entities to facilitate the
money laundering. Khaimov also took the lead on the checks-for-cash arrangement with Money
Launderer 1. The checks that Khaimov and his coconspirators wrote made misleading references
to nonexistent invoices and used stamped signatures from nominal owners who may not even
have been alive anymore. The money that the defendants obtained from Medicare often then
went to China and Uzbekistan. If not, Khaimov would have the nominee owners deliver the
money directly to him at his home, often in the middle of the night.

A Guidelines sentence is the just punishment for the defendant’s offense, and it
would not be greater than necessary under the circumstances.

3. Affording General and Specific Deterrence
The Court’s sentence should also further the aims of general and specific
deterrence. 18 U.S.C. § 3553(a)(2)(B), (C).
Generally speaking, a Guidelines sentence is necessary to deter similarly-situated
individuals from engaging in this behavior. Money laundering schemes like the ones charged in
this case threaten the integrity of federal healthcare programs like Medicare and Medicaid.
Because the profits of these schemes are often enormous — the only limiting variables are the
criminals’ ability to manufacture Medicare and Medicaid claims and their likelihood of getting
caught — it is critical to address the problem through systematic deterrence.
Moreover, because “economic and fraud-based crimes are more rational, cool and
calculated than sudden crimes of passion or opportunity, these crimes are prime candidates for
general deterrence.” See, e.g., United States v. Martin, 455 F.3d 1227, 1240 (11th Cir. 2006)
(internal quotation marks and citation omitted). As Judge Garaufis has recognized, “[t]he need
for general deterrence is particularly acute in the context of white-collar crime.” United States v.
Johnson, No. 16-CR-457-1 (NGG), 2018 WL 1997975, at *5 (E.D.N.Y. Apr. 27, 2018); see also;
United States v. Mueffelman, 470 F.3d 33, 40 (1st Cir. 2006) (deterrence of white-collar crime is
“of central concern to Congress”). This is true, in part, because “[p]ersons who commit white-
collar crimes like defendant’s are capable of calculating the costs and benefits of their illegal
activities relative to the severity of the punishments that may be imposed.” See Johnson, 2018

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WL 1997975 at *5 (internal quotation marks omitted); see also Harmelin v. Michigan, 501 U.S.
957, 988 (1991) (“[S]ince deterrent effect depends not only upon the amount of the penalty but
upon its certainty, crimes that are less grave but significantly more difficult to detect may
warrant substantially higher penalties”). This is especially true when the potential rewards for
would-be criminals who are not caught can be substantial.
A Guidelines sentence is also needed to specifically deter Khaimov, who has
already been sentenced for a criminal fraud scheme related to pharmaceuticals in this very
district. As Probation noted, Khaimov’s participation in multiple fraudulent schemes involving
pharmacies punctuates the importance of specific deterrence. See Addendum. The government
likewise joins in Probation’s recommendation that the sentence imposed here run consecutively
to the Guidelines sentence imposed by Judge Azrack. As already detailed above, the schemes
took place at different times and differed in practically all of their particulars. Consecutive
Guidelines sentences would appropriately reflect the seriousness of each offense committed by
Khaimov and adequately deter him from committing future ones. 3
IV. Restitution and Forfeiture

Under 18 U.S.C. § 3663A, the Court shall impose restitution. In United States v.
Zangari, 677 F.3d 86, 93 (2d Cir. 2012), the Second Circuit held that restitution must be
measured according to the victim’s actual loss, not the defendant’s gain. Moreover, in
calculating restitution, “these losses need not be mathematically precise,” and “[a] reasonable
approximation will suffice, especially in cases in which an exact dollar amount is inherently
incalculable.” United States v. Rivernider, 828 F.3d 91, 115 (2d Cir. 2016) (internal quotation
marks omitted). The government respectfully submits that the Court should order the defendant
to pay restitution in the amount of $18,921,139.21 to Medicare, as set forth in the plea
agreement.
In addition, the defendant acknowledged in the plea agreement that he obtained
and acquired property that is subject to forfeiture, and he consented to the entry of a forfeiture
money judgment in the amount of $9,647,506.08. (PSR ¶ 119). Accordingly, the government

3
Khaimov devotes 12 pages of his submission to arguing that conditions at the
Metropolitan Detention Center (“MDC”) warrant a significant downward variance. See Defense
Submission at 14–26. While the government disputes Khaimov’s sweeping generalizations,
courts often impose Guidelines sentences even while crediting arguments about the MDC, in
light of countervailing factors under Section 3553(a). See, e.g., United States v. Hilliard, 2024
WL 1193606, at *2 (S.D.N.Y. Mar. 20, 2024); United States v. Stewart, 2023 WL 2599668, at
*7 (E.D.N.Y. Mar. 22, 2023). The same should hold true here — on balance, Khaimov’s time at
the MDC does not weigh heavily enough against the nature of his offense and the need for
deterrence to warrant a sentence below the Guidelines range.

10
Case 1:20-cr-00580-AMD Document 116 Filed 03/26/24 Page 11 of 11 PageID #:
1134

respectfully requests that the Court incorporate its forfeiture order (ECF No. 83) into the
judgment of conviction.
V. Conclusion

For the foregoing reasons, the government respectfully requests that the Court
impose a sentence of imprisonment within the adjusted advisory Guidelines range of 97 to 121
months, as well as order the defendant to pay restitution in the amount of $18,921,139.21 to
Medicare and a forfeiture money judgment in the amount of $9,647,506.08.
Respectfully submitted,

BREON PEACE
United States Attorney
Eastern District of New York

GLENN LEON
Chief
Criminal Division, Fraud Section
U.S. Department of Justice

By: /s/
Arun Bodapati
Trial Attorney
Criminal Division, Fraud Section
U.S. Department of Justice

cc: Counsel of Record (via ECF)
Probation Officer Jennifer Baumann

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