Damien Williams, United States Attorney for the Southern District of New York, today announced the guilty pleas of Nerik Ilyaev and Muhyiddin Kadyrov for their respective roles in HIV drug fraud, no-fault auto insurance fraud, and a money laundering scheme totaling more than $6 million. . Ilyaev is charged with conspiracy to commit health care fraud for allegedly using two different pharmacies to defraud Medicare and Medicaid in connection with HIV drug claims and to defraud a no-fault auto insurance company in connection with other drug claims. pled guilty. Kadyrov laundered millions of dollars in fraudulent proceeds in connection with an HIV fraud scheme. Ilyaev and Kadyrov pleaded guilty today before U.S. District Judge Gregory H. Woods.
“Nerik Ilyaev brazenly defrauded Medicare, Medicaid, and a New York no-fault auto insurance company of more than $6 million,” said U.S. Attorney Damian Williams. To carry out the scheme, Ilyaev procured medicines from illegal sources and worked with others to pay kickbacks to low-income individuals. Muhyiddin Kadyrov facilitated Medicare and Medicaid fraud by laundering millions of dollars in criminal proceeds through shell companies. Both Ilyaev and Kadyrov made every effort to conceal their role in these crimes, including using the identities of others. Mr. Ilyaev and Mr. Kadyrov will now pay the price for their crimes, and the authorities will continue to pursue those who profit by defrauding our health care system. ”
According to the complaint, information, and statements made in open court:
From approximately February 2021 to March 2022, Ilyaev owned and operated a pharmacy (“Pharmacy-1”) in Manhattan. Ilyayev used Pharmacy-1 to pay illegal kickbacks to low-income HIV patients, recruit them to fill prescriptions for expensive HIV drugs at Pharmacy-1, and obtain his HIV from illegal sources. I got some medicine. Ilyaev then submitted fraudulent insurance claims to Medicare and Medicaid on behalf of Pharmacy-1 to cover the cost of HIV treatment drugs. In order to hide his role in the fraud scheme, Ilyaev used the identity of another person (“Person-1”), pretended to be Person-1, and used Person-1’s identity to enter the pharmacy. Owned and operated 1. Medicare and Medicaid paid Pharmacy 1 a total of approximately $5.2 million for fraudulent claims for HIV medications.
After closing Pharmacy-1, ILYAYEV took control of another pharmacy (“Pharmacy-2”) located in Queens, New York. Again, to hide his role in the fraud, Ilyaev used the identity of another person (“Individual-3”) and owned and operated Pharmacy-2 while pretending to be Individual-3. Did. Pharmacy-2 filed a fraudulent insurance claim with a no-fault auto insurance company. Pharmacy-2 defrauded a no-fault auto insurance company of approximately $1.2 million. In addition, Pharmacy-2 illegally sold medicines that Ilyaev obtained from illegal sources to other pharmacies.
Kadyrov participated in a money laundering network (the “Money Laundering Network”) that primarily laundered the proceeds of healthcare fraud. This network has been investigated by the Federal Bureau of Investigation (“FBI”) since around 2020. Members of money laundering networks typically deposit checks from medical institutions. Companies representing health care fraud funnel proceeds into New York-based bank accounts held by shell companies. Shell companies purport to be wholesale companies and often use terms such as “wholesale” in their names to avoid banks or law enforcement from suspecting check deposits from medical companies. The co-conspirators who control the shell companies typically collect cash from U.S.-based individuals who want to transfer funds to Uzbekistan through unauthorized channels. The co-conspirator who controls the shell company deducts a fee from that cash and gives it to the co-conspirator who provides the medical exam. The co-conspirators who control the shell companies then wire the proceeds from the checks from the shell companies to Chinese or other foreign companies in order to purchase goods from the shell companies. Foreign companies ship goods to importers in Uzbekistan. The importer pays for the goods in U.S. currency to a co-conspirator partner who operates a shell company based in Uzbekistan. These Uzbekistan-based partners would then pass on the U.S. currency to family members and friends of the individuals who provided the cash to the co-conspirators who controlled the shell companies in New York.
As part of its participation in the money laundering network, KADIROV laundered approximately $4.2 million in fraudulent proceeds for Pharmacy-1. Kadyrov used three bank accounts in the names of three shell companies (the “Shock Companies”), which were purported to be wholesale companies, to launder the proceeds of Pharmacy-1’s fraud. Although the Shell bank account was opened in the name of another person (“Individual-2”), Kadyrov controlled the bank account. Mr. Kadyrov took other steps to conceal his role in the money laundering scheme, including using a burner phone in connection with Shell bank accounts and conducting transactions using Shell bank accounts. Because of this, I hid my face when using the ATM. Pharmacy-1 deposited a check for approximately $4.2 million with Shell Companies. Consistent with operating a money laundering network, Shell Companies transferred the majority of check deposits to companies overseas, including in China, Ukraine, and Russia.
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Ilyaev, 36, of Queens, New York, has pleaded guilty to one count of conspiracy to commit health care fraud, which could carry a maximum sentence of 10 years in prison.
Kadyrov, 44, of Queens, New York, has pleaded guilty to one count of money laundering conspiracy and could be sentenced to up to 20 years in prison.
It is provided here for informational purposes only, as maximum potential fines are established by Congress and a defendant’s sentence is determined by a judge.
Mr. Williams praised the excellent investigative work of the FBI and the U.S. Department of Health and Human Services Office of Inspector General. Mr. Williams also thanked the National Insurance Crime Bureau and the Investigative Medicare Pharmaceutical Integrity Contractor for their investigative assistance.
The case is being handled by the bureau’s Money Laundering and Transnational Criminal Enterprises Division. Assistant United States Attorney Cecilia E. Vogel is in charge of the prosecution.