On September 26, New York City Mayor Eric Adams was charged with conspiracy to commit wire fraud, bribery, and two counts of soliciting donations from foreign nationals, becoming the first New York City mayor since 1872 to be criminally charged. According to the indictment, Adams defrauded the public by accepting illegal campaign contributions and other things of value from foreign nationals during his 2021 mayoral campaign.

Prosecutors allege that Adams accepted foreign funds via smuggled contributions through US-based straw donors. Through these donors, Adams allegedly increased his fundraising and was effectively able to circumvent federal laws aimed at preventing foreign influence on US elections. Prosecutors also alleged that through the straw donor donations, Adams defrauded New York City and stole public funds from a matching funds program, which matches small donor contributions up to eight times their amount in public funds. Through this matching, Adams received over $10 million in public funds.

In addition, Adams also allegedly sought out other improper benefits, including those from a Turkish government official who facilitated free or discounted travel on Turkish Airlines and free lodging, food, and entertainment while in Turkey. Adams never disclosed the travel benefits in required annual financial disclosures and created fake paper trails which suggested he paid for these benefits.

Read the indictment here.

Man Pleads Guilty to Fraudulent COVID-19 Reimbursements

On September 20, Willie F. Murray, Jr. of Tampa, Florida, pleaded guilty to wire fraud and aggravated identity theft for a COVID-19 testing scheme. Murray faces a maximum of 22 years in prison and must forfeit over $5.6 million and seven real properties.

According to the plea agreement, Murray managed a fake COVID-19 testing lab called Lab Tess, LLC, which purportedly provided customers with COVID-19 testing services. Through Lab Tess, Murray submitted fraudulent COVID-19 tests for reimbursement for uninsured individuals. Such tests were in fact never provided to any individuals. In furtherance of the scheme, Murray used personal identifying information of incarcerated, homeless, and deceased individuals and submitted over 126,000 fraudulent claims to the Health Resources and Services Administration (HRSA). Murray received over $5.6 million in reimbursements from HRSA and used the money to purchase properties in South Florida.

Read the US Department of Justice’s press release here.

Enzo Pays $1.7 Million to Settle False Claims

Enzo Biochem Inc. and subsidiary Enzo Clinical Labs Inc. will pay $1.73 million to settle alleged Connecticut False Claims Act violations related to overcharging Connecticut Medicaid for laboratory tests.

According to a state audit and whistleblower complaint, Enzo’s New York laboratory billed full-price rates for tests to Connecticut Medicaid between 2019 and 2022 while billing discounted rates to other payers. Enzo was also accused of using improper billing codes for COVID-19 tests.

This practice was initially flagged because Enzo was required to bill Medicaid at the lowest price charged or accepted from other payers. According to Attorney General William M. Tong, “Enzo overcharged the state, was flagged in an audit, was forced to repay hundreds of thousands of dollars, and then continue[d] to overcharge the state.” The alleged overbilling included billing the state $75 for COVID-19 tests while private parties paid $51 and billing the state $23 for HIV tests while private patients paid $13.

The case is United States of America et al. v. Enzo Biochem Inc. et al., case number 1:22-cv-07613, in the Southern District of New York.

Read Attorney General Tong’s press release here.

$33 Million New Jersey Pharmacy Kickback Scheme

On September 24, Jeffrey Andrews and Adam Brosius pled guilty to a $33 million medication kickback scheme through their New Jersey mail order pharmacy. Andrews pled guilty to one count of conspiracy to violate the Anti-Kickback Statute (AKS) and Brosius pled guilty to committing health care fraud and conspiracy to violate the AKS.

From 2014 to 2016, Andrews and Brosius used their Clifton, New Jersey, pharmacy, Main Avenue Pharmacy, to run an illegal kickback scheme involving compounded drugs such as scar creams, pain creams, migraine medication, and vitamins. According to prosecutors, the men identified compounded drugs that would yield high reimbursements from health insurers, created prescription pads with formulas for the compounded drugs, and distributed the pads to marketers with whom they had contractual relationships. The marketers then distributed the pads to telemedicine companies and doctors and Main Avenue paid those marketers for kickbacks on generated prescriptions. Main Avenue then filled the prescriptions and submitted the claims to health care benefit programs, which amounted to around $33 million in reimbursements.

Andrews faces up to five years in prison and Brosius faces up to 15 years in prison. Both men must pay fines over $250,000.

The case is USA v. Andrews et al., case number 2:20-cr-00578, in the US District Court, District of New Jersey.

Additional Author: Elizabeth Satarov