Lexington Businessman Convicted of Obstructing Justice

FRANKFORT, Ky. - A Lexington businessman was convicted on Monday evening, by a federal jury sitting in Frankfort, of charges related to the obstruction of a federal investigation.

After approximately two hours of deliberation, following a five-day trial, the jury convicted 66-year old Timothy Wayne Wellman of 11 counts related to obstructing justice, aiding and abetting the obstruction of a federal grand jury, and aiding and abetting individuals in making false statements to the FBI.

According to testimony at trial, Wellman requested that multiple employees of CRM Companies (CRM) donate money to the campaigns of two city council members and then reimbursed them for their donation. He later asked the employees to give false information to the FBI, who was conducting an investigation into public corruption allegations, by encouraging the employees to lie about reasons for the reimbursement checks and, in some instances, asking them to create false documents (including ledgers and tax forms) to support their false stories.          

Wellman was indicted in June 2019.

“People simply cannot obstruct federal law enforcement or grand jury investigations, because such conduct undermines the foundation of our system,” said Robert M. Duncan, Jr., United States Attorney for the Eastern District of Kentucky. “Through his actions, the defendant brazenly attempted to obstruct federal investigations into criminal conduct, by counseling others to lie and create false documents, concealing the truth from federal law enforcement and a federal grand jury. This disgraceful conduct cannot be tolerated. I commend the FBI for their hard work and dedication – without their efforts, this important prosecution would not have been possible.”

U.S. Attorney Duncan and James Robert Brown, Special Agent in Charge for the FBI, Louisville Field Office, jointly announced the jury’s verdict.

The investigation was conducted by the FBI.  The United States was represented by Assistant U.S. Attorneys Erin Roth and Ken Taylor.

Wellman will appear for sentencing on July 1, 2020. For the most serious charges, he faces up to twenty years in federal prison.  He also faces a maximum fine of $2.75 million.  However, the Court must consider the U.S. Sentencing Guidelines and the applicable federal sentencing statutes before imposing a sentence.

Physician Charged for Alleged Role in an Over $120 Million Health Care Fraud and Money

 Laundering Conspiracy Involving Sponsorship of Ultimate Fighting Championship Hall of Famers

A physician who from 2016 to 2017 was the top prescriber of oxycodone 30 mg in Michigan was charged in a superseding indictment unsealed today with an over $120 million health care fraud and money laundering scheme that involved the alleged medically unnecessary distribution of over 2.2 million dosage units of controlled substances and the administration of medically unnecessary injections that resulted in patient harm.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Steven M. D’Antuono of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office made the announcement.

Francisco Patino, 65, of Wayne County, Michigan, was charged in the superseding indictment with one count of conspiracy to commit health care fraud and wire fraud, one count of conspiracy to commit money laundering and one count of money laundering.  These charges are in addition to the two counts of health care fraud and one count of conspiracy to defraud the United States and pay and receive health care kickbacks that was charged in the initial indictment.  The case is pending before U.S. District Judge Denise Page Hood of the Eastern District of Michigan.  Trial has been scheduled to begin on April 7 before Judge Hood.

The superseding indictment alleges the laundering of the proceeds of the health care fraud scheme to falsely portray the defendant as a legitimate doctor through the publication of a diet book and plan described as the “next Atkins,” paid-for appearances on a nationally syndicated television show, and the sponsorship of boxers, cagefighters and prominent Ultimate Fighting Championship (UFC) world champions and hall of famers.      

The superseding indictment alleges that Patino owned, controlled and operated numerous pain clinics and laboratories in Michigan – including Global Quality Inc., RenAMI, FDRS and Patino Laboratories – and was the top prescriber of Oxycodone 30 mg in Michigan from 2016 to 2017.  As alleged in the superseding indictment, from 2008 until his arrest in 2018, Patino induced patients to come to his clinics by offering unnecessary prescriptions for addictive opioids, of which he ultimately prescribed over 2.2 million dosage units of medically unnecessary controlled substances, including fentanyl, oxycodone and oxymorphone.  Patino prescribed these opioids to Medicare beneficiaries, some of whom were addicted to narcotics.  Some of these opioids were resold on the street, the superseding indictment alleges.  Fentanyl is one of the most potent opioids available for human use.

According the superseding indictment, Patino forced patients to submit to unnecessary and sometimes painful back injections and other procedures in exchange for the opioid prescriptions as part of a scheme to defraud Medicare of over $120 million.  The superseding indictment alleges that Patino persisted with these unlawful practices even after Medicare informed him that the injections violated Medicare’s rules and after Patino entered into a consent order with the State of Michigan that his prescription of opioids “constitute[d] a violation of the public health code.”

Patino also ordered unnecessary urine drug testing in exchange for illegal kickbacks, the superseding indictment alleges.  Patino was aware that his ownership structure and kickbacks were a violation of law and authored emails acknowledging that such ownership constituted  a “violation of the Stark and Anti-Kickback laws” and attempted to conceal and disguise the ownership structure and scheme in order to keep himself “out of Federal Prison & having all our assets seized to pay a 15 million dollar fine.”

The superseding indictment alleges that Patino conspired to commit money laundering and committed money laundering in connection with the creation and promotion of the “Patino Diet” plan, which Patino described to others as the “next Atkins diet.”  In order to conceal and disguise his illegal health care fraud scheme, Patino allegedly paid for the authorship and publication of a book touting the diet plan, entitled “The Age of Globesity,” and paid hundreds of thousands of dollars in order to promote the diet plan and appear as the exclusive medical expert on a nationally syndicated television show.

In addition to concealing the scheme by paying money to falsely portray himself as a media personality and a legitimate physician, the superseding indictment alleges, that Patino laundered the healthcare fraud and kickback money by entering into sham contracts or employment relationships to pay others on his behalf to sponsor boxers, mixed martial artists and Ultimate Fighting Championship (UFC) combatants, including UFC world champions and hall of famers.  The superseding indictment alleges that Patino also withdrew the proceeds derived from the conspiracy to live an extravagant lifestyle and spend money on luxury clothes, real estate and international travel, including multiple trips to the Cayman Islands.

The charges against Patino are related to a broader investigation into the Tri-County Network of pain clinics in Michigan and Ohio, which involves over $300 million in alleged Medicare fraud and the alleged distribution of over 6.6 million dosage units of controlled substances.  In connection with the investigation, 22 defendants, including 12 physicians, have previously pleaded guilty or been found guilty at trial.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

This case was investigated by the FBI and HHS-OIG.  Assistant Chief Jacob Foster and Trial Attorney Thomas Tynan of the Criminal Division’s Fraud Section are prosecuting the case.

The Fraud Section leads the Medicare Fraud Strike Force.  Since its inception in March 2007, the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Pharmacy Owner Admits Role In Multimillion-Dollar Illegal Kickback Scheme And Evading Taxes On Over $33 Million Of Income

TRENTON, N.J. – The former co-owner of a Union City, New Jersey, pharmacy today admitted his role in a scheme to pay bribes to health care professionals and evading taxes on $33.9 million in income, U.S. Attorney Craig Carpenito announced.

Igor Fleyshmakher, 58, of Holmdel, New Jersey, pleaded guilty before U.S. District Judge Michael A. Shipp in Trenton federal court to an information charging him with conspiring to violate the federal anti-kickback statute and tax evasion.

The information alleges that he conspired to violate the anti-kickback statute with seven other individuals, including the following individuals who have been previously charged by superseding indictment or information: Samuel “Sam” Khaimov of Glen Head, New York; Ruben Sevumyants of Marlboro, New Jersey; Alex Fleyshmakher of Morganville, New Jersey; and Eduard “Eddy” Shtindler of Paramus, New Jersey. Shtindler has previously pleaded guilty for his role in a related kickback conspiracy and is pending sentencing.

“Kickback schemes like this not only illegally enrich defendants like Fleyshmakher, they take needed resources from our health care system,” U.S. Attorney Carpenito said. “And after stealing millions of dollars in this way, the defendant stole again, by failing to report this income or pay taxes on it. His guilty plea today will make sure he is held to account for his crimes.”

“This fraudster was part of a kickback scheme that not only tilted the scales toward Prime Aid Pharmacies, but diverted precious federal dollars so he could enrich himself while ripping off the government,” FBI-Newark Special Agent in Charge Gregory W. Ehrie said. “If you are an investor or medical professional participating in a fraud scheme for an ill-gotten gain, you should ask yourself if it's worth the price you will pay. The FBI is searching for schemes like this and if you participate, you will be caught.”

“Bribing doctors to line your own pockets and using secret accounts to evade taxes are both very serious offenses motivated by one thing: greed,” John R. Tafur, Special Agent in Charge, IRS Criminal Investigation, Newark Field Office, said. “Today’s guilty plea should send a strong deterrent message to anyone else thinking about participating in this type of illegal activity. If you decide to roll the dice, IRS Criminal Investigation along with our law enforcement partners will find you.”

“Fleyshmakher, with his previously indicted co-conspirators, bribed doctors to illegally increase profits and enrich themselves,” Scott J. Lampert, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services, said. “Working with our state and federal law enforcement partners, we will continue to hold accountable anyone who attempts to defraud government healthcare insurance programs.”

According to documents filed in this case:

The Prime Aid Pharmacies – now closed – operated as “specialty pharmacies” out of locations in Union City, New Jersey, and Bronx, New York. They processed expensive medications used to treat various conditions, including Hepatitis C, Crohn’s disease, and rheumatoid arthritis. Igor Fleyshmakher was a co-owner of Prime Aid Union City. Khaimov was the other co-owner of Prime Aid Union City and the lead pharmacist of Prime Aid Bronx. Sevumyants was Prime Aid Union City’s operations manager, and Alex Fleyshmakher worked at Prime Aid Union City and was an owner of Prime Aid Bronx. Shtindler was a Prime Aid Union City employee.

Staring in 2010, in order to obtain a higher volume of prescriptions, Igor Fleyshmakher, Khaimov, Sevumyants, Alex Fleyshmakher, Shtindler, and other Prime Aid employees paid bribes to doctors and doctors’ employees to induce doctors’ office to steer prescriptions to the Prime Aid Pharmacies. The bribes included expensive meals, designer bags, and payments by cash, check, and wire transfers. The bribes and kickbacks were paid to, among others, doctors and doctors’ employees in New Jersey and New York.

As part of his plea agreement, Igor Fleyshmakher agreed that the improper benefit conferred as part of the conspiracy to violate the federal anti-kickback statute was between $3.5 million and $9.5 million.

In addition, between 2012 and 2014, Igor Fleyshmakher diverted a substantial amount of Prime Aid Union City income into a secret bank account that he opened and controlled. He concealed the account from the pharmacy’s tax preparers and did not report any of the funds he deposited into it on his personal income tax returns. In total, he diverted $33.9 million of income into the secret account, all of which he failed to report to the IRS. As a co-owner of the pharmacy, his conduct resulted in a $5.8 million tax loss to the IRS on his share of that income for tax years 2012 through 2014.

The conspiracy and tax evasion charges to which Igor Fleyshmakher pleaded guilty each carry a maximum penalty of five years in prison and a fine of up to $250,000. Sentencing is scheduled for June 22, 2020.

U.S. Attorney Carpenito credited special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge John R. Tafur; special agents of the Department of Health and Human Services-Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert; and the N.J. Office of the State Comptroller, under the direction of Comptroller Kevin Walsh, with the ongoing investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorney Joshua L. Haber of the Health Care Fraud Unit of the U.S. Attorney’s Office in Newark.

The charges against and allegations in the information pertaining to Khaimov, Sevumyants, and Alex Fleyshmakher are merely accusations, and those three defendants are presumed innocent unless and until proven guilty.

Defense counsel: Eric M. Creizman Esq. and Melisa Madrigal Esq., New York