US Pharm
. 2013;38(4):54-57.

Sweeping charges of prescription drug fraud and abuse have been filed across the nation in recent months, mostly tied to opiate abuse schemes. Just a few months ago, the epicenter of drug abuse was in Florida,1 where pharmacists, small pharmacies, large drug store chains, and wholesale distributors faced charges of selling huge quantities of opiates and other controlled substances. With so much attention focused on the Sunshine State, the abuse schemes seem to have shifted north to Michigan.

Case 1: Drug Kickback Scheme

One of the most intensive investigations involves pharmacists and physicians in the metropolitan Detroit area. More than 80 individuals have been indicted on a variety of federal drug law violations over the past few months.

Six pharmacists, physicians, and their associates were charged in one large-scale operation in August 2011.2 Participants were alleged to have conspired to illegally distribute controlled substances at 26 different pharmacies owned and operated by pharmacist Babubhai “Bob” Patel. He was sentenced to 17 years in a federal penitentiary in February 2013. In this instance, Medicare and Medicaid were defrauded for as much as $60 million for drugs that were dispensed pursuant to illegal prescriptions. Private health insurers were also subjected to the scams.

Thirteen additional participants involved in this scheme were indicted on March 18, 2013.2 The Drug Enforcement Administration (DEA) spent much of the prior day searching the offices of one suspect, Rajat Daniel, MD, an internal medicine physician who operated a medical clinic in the Detroit suburbs. According to the indictment, “Patel and his associates paid physicians associated with the scheme kickbacks and other induce-ments in exchange for the medical professionals writing prescriptions for controlled substances for their patients, and directing those patients to fill the prescriptions at a Patel Pharmacy.”2

The government contends that Mr. Patel established a network of physicians in “pill mills” who issued prescriptions to patients who had no legitimate need for the medications. The participants would use their Medicaid or Medicare insurance benefits at one of the Patel pharmacies and receive the drugs as a kickback. Among the drugs involved were hydrocodone, oxycodone, oxymorphone, and codeine.

“Dishonest health care providers and pharmacists who exploit Medicare and Medicaid through fraudulent billing and other schemes will be held accountable for their crimes,” said FBI Special Agent in Charge Robert D. Foley III. “The FBI remains committed to investigating this type of fraud and bringing those who abuse the system to justice.”2

Case 2: The U.S. 23 Pipeline

In another case, released just 2 days later, 43 pharmacists, physicians, and related health care workers were indicted on charges of running an illegal prescription drug scheme.3 According to this indictment, five doctors alone prescribed more than 500,000 doses of oxycodone, which had a street value of $10 million; 2 million doses of hydrocodone; more than 2 million doses of alprazolam (Xanax); and more than 1,000 L of codeine-based cough syrup over a 21-month period. The defendants are charged with running a criminal operation—complete with bribery, money laundering, kickbacks, and guns—that bilked Medicare of more than $21.5 million. Health care fraud charges were filed against 32 of the defendants; three are charged with money laundering, and three are also charged with being felons in possession of firearms.4

The indictments have been dubbed the “U.S. 23 Pipeline” case because of the proximity to a southeastern Michigan thoroughfare running from Flint through Ann Arbor and on to Portsmouth, Ohio, where drug trafficking has become rampant.4

Specifically, the DEA indicated that the owners of home health agencies would provide kickbacks, bribes, and other illegal benefits to physicians to induce them to write prescriptions for controlled substances for patients with Medicare, Medicaid, or private insurance, which were filled at the respective pharmacies. According to the indictment, patients were enticed into the scheme by recruiters, or “marketers,” who would pay kickbacks and bribes to the patients in exchange for permitting the pharmacies and physicians to bill their insurance for medications and services that were medically unnecessary and/or never provided.

During this conspiracy, prescriptions were presented to Sav-Max Pharmacy (pharmacist Ahab Elmadhoun), Sav-Mart Pharmacy (pharmacist Waleed Yaghmour), Atrium Pharmacy (pharmacist Krina Patel and manager Sanjay Patel), or Caremax Pharmacy (pharmacist Jayshriben Gandhi and manager Guarang Gandhi) for filling. A complete list of all defendants charged in the case is available online.5

The medical professionals and health care agency owners would then bill the relevant insurers for services supposedly provided to the patients, without regard to the medical necessity of those prescriptions and services. Some of the pharmacists would bill insurers, including Medicare, Medicaid, and private insurers, for dispensing the medications, despite the fact that the drugs were medically unnecessary and, in many cases, never provided. Other times, the pharmacists accepted cash from the recruiters for filling and dispensing medications. The indictment further alleges a conspiracy to distribute controlled substances by the health care owners, physicians, pharmacies, and recruiters to facilitate the submission of false claims to Medicare, Medicaid, and private insurers.

In addition, the indictment alleges illegal money laundering by pharmacists Waleed Yaghmour and Ahab Elmadhoun and also by home health agency owner Sardar Ashrafkhan, also known as “Dr. Khan.” The indictment further specifies individual charges of felon in possession of a firearm against marketers Toney Taylor and Troy Ivory and home health agency owner John Stephen Check.5

U.S. Attorney Barbara McQuade stated at a news conference that this pain pill scheme is problematic in two ways. First, it steals money from taxpayers, and second, it contributes to addiction. “The merger of health care fraud and drug trafficking is a disturbing trend that is not only robbing taxpayers, but also fueling addictions to prescription drugs,” she said. Ms. McQuade further stressed that “Prescription drug abuse has become a national epidemic, with more Americans dying from overdoses than from gunshot wounds.”5

FBI Special Agent In Charge Robert L. Corso, of the DEA’s Detroit Field Division, stated, “Confronting the illegal diversion and abuse of controlled pharmaceuticals is a top priority of DEA and our law enforcement partners. The indictment alleges that this drug distribution organization includes members of the medical profession who abused their positions of trust and endangered the lives of countless people for pure profit. This was done by illegally distributing opiate painkillers and other controlled prescription medications throughout southeast Michigan and stretching to the southern reaches of Ohio. This investigation makes it clear that the DEA and our partners in law enforcement will continue to investigate and bring to justice those individuals that are responsible for the illegal distribution of prescription medicines.”6


Remember that an indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Be that as it may, drug trafficking through the plots and schemes described here is enough to make one’s heart weep. What is more troubling, however, is that this activity is so closely associated with pharmacies and pharmacists that have disregarded any and all notions of the high professional standards that the majority of pharmacists hold near and dear. It calls the credibility of the whole profession into question, making all of us look bad. No wonder that law enforcement agents target pharmacists when this kind of activity surfaces.

The worst problem is what happens to patients who have a legitimate need for pain treatment. Pharmacists chilled by the fear of prosecution will be more reluctant to dispense opiates no matter how real the patient’s predicament. It is these honest and needy patients who suffer the most when pharmacists are fearful that controlled substances prescriptions will just cause them problems if dispensed as written.

How can criminal enterprises of the scope involving the “bad guy” pharmacists described here continue to exist without legitimate pharmacists knowing about them? Would some self-policing help? Reporting your suspicions about “pill mill” doctors and pharmacies to the local DEA office or enforcement agencies might be one way to remove the scars inflicted by these pharmacists. This takes getting involved and sticking out your own neck. Ignoring the situation or hiding your head in the sand will do nothing for the betterment of the profession.

Take the high road. Do not be frightened into thinking that all controlled substances prescriptions may be illegitimate. Use some common sense and heightened scrutiny to verify prescriptions to take care of patients with necessary and appropriate prescriptions while using your gatekeeper responsibility to protect against illegal diversion.


1. Vivian JC. DEA continues corporate responsibility drive. US Pharm. 2012;37(5):56-58. Accessed March 22, 2013.
2. Burns G. 13 indicted on Medicare/Medicaid prescription fraud charges in Metro Detroit. Michigan Live. March 19, 2013. Accessed March 22, 2013.
3. Baldas T. 43 health workers indicted in prescription drug scheme. Detroit Free Press. March 21, 2013. Accessed March 22, 2013.
4. Stafford K. Ypsilanti doctor indicted in health care, drug distribution scheme along U.S. 23 pipeline. March 21, 2013. Accessed March 22, 2013.
5. Forty-four individuals indicted in health care fraud and drug distribution scheme: seven doctors, four pharmacists, three home health agency owners among those indicted. March 20, 2013. U.S. Attorney’s Office, Eastern District of Michigan. Accessed March 23, 2013.
6. Feds announces drug, health card fraud busts in Metro Detroit: 44 arrested after prescription drug scheme investigation in Michigan. Click On Detroit. March 20, 2013. Accessed March 23, 2013.

To comment on this article, contact