Purna Chandra Aramalla, who operates A Fair Deal Pharmacy Inc. in Queens and Quality Health Drug Inc. in Bronx, allegedly carried out the multimillion-dollar scheme by purchasing pharmaceuticals, including high-cost HIV medications, that were obtained from patients who sold the drugs rather than use them.
Aramalla also obtained reimbursement for pharmaceuticals that were never actually dispensed to patients, according to authorities. Instead, customers with prescriptions for pharmaceuticals essentially “sold” their prescriptions to Aramalla, agreeing not to take delivery of the pharmaceuticals in exchange for a share of the reimbursed proceeds.Authorities say, lighter fluid was used in Aramalla's scheme to dissolve adhesive on the repackaged pharmaceuticals which were resold to customers as new. In some cases, Medicaid or Medicare had already paid for the pharmaceuticals when they were initially dispensed, according to the case report.
“The illegal diversion of prescription medications threatens the health of those induced to sell their medication rather than take it," said Manhattan prosecuting U.S. Attorney Preet Bharara. "It threatens the health of those who unwittingly purchase the repackaged drugs believing them to be factory-fresh."
From October 2010 to August 2012, Aramalla purchased approximately $1.7 million of certain medications from two legitimate, licensed wholesalers that were his primary sources of legitimate drugs, according to authorities. During that same period, he received approximately $4.3 million in reimbursements from Medicare and Medicaid for those same drugs.
Aramalla's attorney Catherine Foti told Patch, "Mr. Aramalla denies the charges and intends to defend his case vigorously."
Arrested last week and charged with one count of conspiracy to commit health care fraud and wire fraud and one count of money laundering, Aramalla faces a maximum term of 20 years in prison for each charge. He has been released on bail conditions, including a $2 million personal recognizance bond.
Those who think they may have been victimized in the prescription drug scheme are encouraged to call the FBI hotline at (212) 384-3555.