DETROIT – Officials are accusing 10 people in a massive $46 million scheme to submit co-pay claims for medications that were never prescribed at 26 pharmacies in 15 different cities across Wayne, Oakland and Macomb counties.
Pharmacies in Westland, Canton Township, Sterling Heights, Clinton Township, Novi, Waterford Township, Taylor, Livonia, Dearborn Heights, Lincoln Park, Garden City, Southgate, Wyandotte, Redford Township and New Boston are named in the criminal complaint. A pharmacy in Lansing was also involved, officials said.
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Authorities believe Hussein Abdallah, Mohamad Abou-Khodr, Daniel Haidar, Nabil Chehadeh, Ali El-Moussawi, Bassem Farhat, Hussein Wazne, Bahia Zeidan, Linda Fawaz and Suzan Berro were involved in the scheme, beginning in July 2014.
How the scheme worked
Officials said the 10 people listed above knowingly conspired together in a scheme to defraud co-pay assistance programs by submitting claims for fake prescriptions. They submitted claims totaling at least $46 million between January 2014 and November 2019, according to court records.
They made money for themselves by submitting requests for reimbursement from pharmaceutical manufacturers for medication that wasn’t prescribed by doctors or dispensed by pharmacists, court records show.
Authorities said the people involved hid the false claims and diverted proceeds for their own personal benefit and the benefit of their co-conspirators.
Setting up pharmacies
Abdallah, Abou-Khodr, Haidar and Chehadah would take ownership of Michigan pharmacies, officials said. They would often hide that they owned the pharmacies by naming Zeidan and Fawaz as nominee owners, according to authorities.
Farhat would help prepare the documents needed to open the pharmacies, court records show. Once the paperwork was submitted for a new pharmacy, one or more of the people involved would find a physical place for the pharmacy’s location, officials said.
One or more of the people involved would pay someone with a valid Michigan pharmacist license to serve as the pharmacist in charge of the new businesses, officials said. None of the people involved are themselves licensed pharmacists, according to authorities.
Someone involved would then apply for a pharmacy license and, in some instances, they would skip the initial steps and buy pharmacies outright, court records show.
When they received a pharmacy license, they would apply for National Provider Identifier and National Council for Prescription Drug numbers. Those numbers identify pharmacies that submit claims to co-pay assistance programs and ensure the proper routing of reimbursements paid by third-party businesses, officials said.
Making claims
Once they obtained NPI and NCPDP numbers, the people involved would begin submitting claims to co-pay assistance programs for medications that hadn’t been prescribed or handed out, according to officials.
The pharmacies would submit multiple claims for medications that had never been purchased or were purchased in quantities less than the claims, authorities said. Many of the pharmacies didn’t carry inventory or fill prescriptions, court records show.
They even submitted claims on behalf of patients who didn’t exist, according to authorities.
‘Open-and-close’ pharmacies
When third-party administrators got suspicious of the pharmacies and requested supporting documentation or on-site audits, the people involved in the scheme would either fail to respond to the requests or refuse to submit to an audit, officials said.
That usually resulted in the involved pharmacies being blocked or terminated from the pharmacy switch network, leaving it unable to make future claims, according to court records. When this happened, the people involved would sometimes close that pharmacy and immediately reopen a new one at the same address, court records show.
Those pharmacies are known in the industry as “open-and-close” pharmacies, officials said.
How each person fit into scheme
Hussein Abdallah
Officials said Abdallah was a businessperson who coordinated the acquisition of multiple pharmacies on behalf of several other people. He was also involved in the activities of the pharmacies, court records show.
Abdallah was the owner of at least six pharmacies engaged in submitting false co-pay assistance coupons for fake prescriptions, officials said. The pharmacies he owned include Clinic RX2, Crittenton RX, Med Rite Pharmacy, Family Health Pharmacy, Michigan RX Pharmacy and Newburgh Pharmacy, according to authorities.
Abdallah is charged with conspiracy to commit wire and mail fraud, six counts of wire fraud -- aiding and abetting and one count of money laundering.
Mohamad Abou-Khodr
Abou-Khodr was a businessperson who owned several pharmacies involved in submitting false co-pay assistance coupons for fake prescriptions, officials said.
He owned New Boston RX Pharmacy, Guardian Pharmacy, Long Lake Pharmacy and Nova Pharmacy, according to court records.
Abou-Khodr is charged with conspiracy to commit wire and mail fraud, two counts of wire fraud -- aiding and abetting, two counts of mail fraud -- aiding and abetting and four counts of money laundering.
Daniel Haidar
Authorities said Haidar was a businessperson who owned several pharmacies that submitted false co-pay claims for fake prescriptions.
He owned Wellgreens (Danny’s) Pharmacy, Downriver RX Pharmacy, Wellmart Pharmacy and Quest RX, officials said.
Haidar is charged with conspiracy to commit wire and mail fraud, four counts of wire fraud -- aiding and abetting and two counts of money laundering.
Nabil Chehadeh
Court records show Chehadeh was a businessperson who owned pharmacies engaged in submitting false co-pay claims for fake prescriptions.
He owned Med Health Pharmacy, Dart Rx, Metro Rx, First Aid Pharmacy and Morals Pharmacy, according to authorities.
Chehadeh is charged with conspiracy to commit wire and mail fraud, one count of wire fraud -- aiding and abetting, one count of mail fraud -- aiding and abetting and three counts of money laundering.
Ali El-Moussawi
El-Moussawi owned several pharmacies that submitted false co-pay assistance coupons for fake prescriptions, authorities said.
He owned Mary’s Pharmacy, Hollywood Pharmacy Group, Fraser RX Pharmacy and Cedar RX, according to court records.
El-Moussawi directly participated in the acquisition of several other pharmacies, officials said.
El-Moussawi is charged with conspiracy to commit wire and mail fraud, one count of wire fraud -- aiding and abetting and one count of money laundering.
Bassem Farhat
Authorities said Farhat was an accountant who prepared or helped prepare the articles of organization for several pharmacies.
Farhat also owned pharmacies involved in the false co-pay claim scheme, officials said.
Farhat owned Pro Med Pharmacy, Waterford Pharmacy, Dalcoma RX and Family Drug Pharmacy V, Inc.
Farhat is charged with conspiracy to commit wire and mail fraud, one count of wire fraud -- aiding and abetting, one count of mail fraud -- aiding and abetting and two counts of money laundering.
Hussein Wazne
Wazne was a businessperson and owned several pharmacies submitting false claims for fake prescriptions, officials said.
He owned Canton RX, Safe Pharmacy, Wayne RX and Wyandotte RX (Royalty RX), court records show.
Wazne is charged with conspiracy to commit wire and mail fraud, one count of wire fraud -- aiding and abetting and two counts of money laundering.
Bahia Zeidan
Officials said Zeidan was the first pharmacy manager at New Boston RX Pharmacy and then was the nominee owner of Levan RX.
Both pharmacies were involved in submitting false co-pay assistance coupons for fake prescriptions, authorities said.
Zeidan is charged with conspiracy to commit wire and mail fraud, one count of wire fraud -- aiding and abetting and one count of money laundering.
Linda Fawaz
Court records show Fawaz was initially the office manager at Ideal Business Resources and then the nominee owner of Brite Well RX, a pharmacy involved in submitting false co-pay assistance coupons for fake prescriptions.
Fawaz is charged with conspiracy to commit wire and mail fraud, two counts of wire fraud -- aiding and abetting, one count of mail fraud -- aiding and abetting and one count of money laundering.
Suzan Berro
Berro was an employee of Abdallah, officials said.
Berro worked under the direction of Fawaz, processing coupon reimbursements for Abdallah’s pharmacies, according to authorities.
Berro is charged with conspiracy to commit wire and mail fraud and one count of wire fraud -- aiding and abetting.
Pharmacies named
A total of 27 pharmacies -- 26 in Metro Detroit -- were listed in the criminal complaint.
Those pharmacies claimed to provide prescription drugs to uninsured customers and private insurer beneficiaries, according to authorities.
Wayne County
- Michigan RX Pharmacy -- 44237 Michigan Avenue in Canton Township.
- Canton RX -- 145 North Haggerty Road in Canton Township.
- Smart TX Pharmacy -- 25464 Van Born Road in Dearborn Heights.
- Clinic RX2, later Med Rite Pharmacy -- 23850 Van Born Road in Dearborn Heights.
- Pro Med Pharmacy, later Guardian Pharmacy -- 29866 Ford Road in Garden City.
- Wellmart Pharmacy, later Brite Well RX -- 28542 Ford Road in Garden City.
- Downriver RX Pharmacy, later First Aid Pharmacy -- 2017 Fort Street in Lincoln Park.
- Smart Pharmacy -- 8966 Middle Belt Road in Livonia.
- Levan RX, later Nova Pharmacy -- 15140 Levan Road, suite 40 in Livonia.
- New Boston RX Pharmacy -- 19162 Huron River Drive in New Boston.
- Halas Pharmacy -- 25735 West Eight Mile Road in Redford Township.
- Family Drug Pharmacy V, Inc. -- 25241 Grand River Avenue in Redford Township.
- Family Health Pharmacy -- 15450 Northline Road in Southgate.
- Safe Pharmacy -- 26110 Eureka Road in Taylor.
- Med Health Pharmacy -- 8024 North Middle Belt Road in Westland.
- Pharm Adivsors, doing business as Mint Pharmacy -- 2074 Wayne Road in Westland.
- Wellgreens Pharmacy, later Danny’s Pharmacy -- 1629 South Merriman Road in Westland.
- Ritemed Pharmacy -- 35119 Warren Road in Westland.
- Newburgh Pharmacy -- 8653 Newburgh Road in Westland.
- Wayne Pharma -- 974 Ford Avenue in Wyandotte.
- Wyandotte RX, also known as Royalty RX -- 966 Ford Avenue in Wyandotte.
Oakland County
- Quest RX, later Sam Pharmacy RX -- 39915 Grand River Avenue in Novi.
- Waterford Pharmacy -- 4764 Dixie Highway in Waterford Township.
Macomb County
- Dalcoma Pharmacy -- 43171 Dalcoma Street in Clinton Township.
- Metro RX Pharmacy -- 3508 Metropolitan Parkway in Sterling Heights.
- Crittenton RX -- 42370 Van Dyke in Sterling Heights.
Ingham County
- Cedar RX -- 2513 South Cedar Street in Lansing.
Other companies involved
Officials said a company named Ideal Care Resources at 25441 Van Born Road in Dearborn Heights claimed to provide staffing services to pharmacies. The company appeared to have been the successor to Ideal Business Resources, which did business at 28540 Ford Road in Garden City, according to court records.
Pro Help Consulting was a company that did business at 4732 Orchard Avenue in Dearborn and claimed to provide consulting services to pharmacies, officials said.
Ideal Business Resources, Ideal Care Resources and Pro Help Consulting appear to be shell corporations owned and operated by Abdallah, according to authorities.
Officials said Global Family Service LLC, a corporation that did business at 1028 Southfield Freeway in Dearborn, claimed to provide consulting services but appeared to be a shell corporation owned and operated by Farhat.
Defendants ordered to forfeit proceeds
Everyone involved in the conspiracy will be ordered to forfeit any property or money gained from the scheme, if convicted, the criminal complaint says.
The items listed in court records include a Cadillac Escalade, a Land Rover Range Rover and the homes at the following locations in Dearborn Heights:
- 6800 block of Riverside Drive in Dearborn Heights
- 15300 block of Prospect Street in Dearborn Heights
- 6000 block of Rosetta Street in Dearborn Heights
- 23400 block of Military Road in Dearborn Heights
- 5600 block of Rouge Circle in Dearborn Heights
- 25600 block of Loch Lomond Drive in Dearborn Heights
- 7000 block of West Berwyn Street in Dearborn Heights
- 6600 block of Fairwood Drive in Dearborn Heights
- 254000 block of Van Born Road in Dearborn Heights
- 6900 block of Fairway Street in Dearborn Heights
Any of the money or property that can’t be returned can be sought by the court in the form of substitute property, according to the complaint.
Wire fraud charges
The wire fraud charges against all 10 defendants stemmed from 10 separate incidents listed in the criminal complaint.
Dec. 12, 2015: Adballah, Abou-Khodr and Haidar were connected to an email that had an attachment containing a list of prescription medications, officials said.
Dec. 15, 2015: Abdallah sent an email containing a link to websites where patients could obtain co-pay assistance options, according to court records.
July 3, 2016: Abdallah and Farhat were linked to an email regarding the change of Downriver Rx to First Aid Pharmacy, authorities said.
April 3, 2017: Haidar and Zeidan were part of a WhatsApp chat regarding the Levan RX split between the two of them, court records show.
March 9, 2018: Abdallah and Fawaz exchanged an email with an audit of the co-pay assistance program for 17 of the involved pharmacies, according to authorities.
May 21, 2018: Haidar and Wazne were linked to an email with a Comcast Business monthly statement for internet service at Safe Pharmacy, officials said.
July 28, 2018: Abou-Khodr and Fawaz exchanged an email containing an invoice for purchases made by Med Health between January 2017 and January 2018, court records show.
Jan. 7, 2019: Abdallah and El-Moussawi were on an email that contained links to websites for free trial cards for Xarelto and Invokana, according to authorities.
Jan. 9, 2019: Abdallah and Berro were connected to an email containing a spreadsheet for Crittenton RX, Ritemed and Dalcoma pharmacies, officials said.
April 2, 2019: Haidar and Chehadeh exchanged an email containing MB Advisors invoices for accounting services related to Dart RX, Med Health Pharmacy, Master Pharmacy and Morals Pharmacy, according to court records.
Mail fraud charges
The mail fraud charges against four of the defendants stemmed from five checks that were mailed throughout the conspiracy.
Nov. 30, 2014: Abou-Khodr was charged for a $10,032 check sent from AlphaScript to New Boston RX Pharmacy, officials said.
Jan. 23, 2017: Farhat was charged for a $53,422.79 check sent from Emdeon to Pro Med Pharmacy, court records show.
June 13, 2017: Chehadeh was charged for a $38,428.97 check sent from Emdeon to Med Health Pharmacy, according to authorities.
Nov. 19, 2018: Fawaz was charged for a $10,675.24 check sent from SimpleSaveRx to Brite Well Rx, court records show.
March 20, 2019: Abou-Khodr was charged for a $13,540 check sent from SimpleSaveRx to Nova Pharmacy, authorities said.
Money laundering charges
The money laundering charges against nine of the defendants stemmed from 13 separate incidents, court records show.
Dec. 26, 2016: Abou-Khodr and Farhat were charged for the deposit of a Pro Med Pharmacy check worth $20,142 made payable to Abou, Khodr, officials said.
May 11, 2017: Chehadeh was charged for a wire transfer from Med Health Pharmacy’s bank account to First American Title for $106,891.49 as payment for Chehadeh’s home, according to authorities.
May 12, 2017: Abou-Khodr and Chehadeh were charged for a $90,000 wire transfer from New Boston RX’s bank account to First American Title as payment for Chehadeh’s home, court records show.
May 25, 2017: Wazne was charged for depositing a Wyandotte RX check made payable to Royal Custom Cabinets for $19,985.01, according to court records.
June 1, 2017: Haidar was charged for depositing a Wyandotte RX check made payable to Platinum Architecture for $39,884, authorities said.
June 2, 2017: Abou-Khodr and Chehadeh were charged for a $60,000 wire transfer from Med Health Pharmacy’s bank account to Title One, Inc., referencing Abou-Khodr, according to officials.
June 2, 2017: Abou-Khodr was charged for a $136,246.72 wire transfer from New Boston Rx to Title One, referencing himself, officials said.
June 5, 2017: Haidar was charged for depositing a Wyandotte RX check made payable to Platinum Architecture for $27,901, court records show.
June 8, 2017: Wazne was charged for depositing a Wyandotte RX check made payable to Royal Custom Cabinets for $14,053, officials said.
Nov. 28, 2017: Zeidan was charged for depositing a Levan RX check for $35,350, according to authorities.
Dec. 12, 2018: Adballah and Farhat were charged for the deposit of a Hollywood Pharmacy Group check made payable to Ideal Business Resources for $10,400, court records show.
March 14, 2019: El-Moussawi was charged for depositing a cashier’s check made payable to Cherry Hills Motors for $14,073, according to officials.
May 1, 2019: Fawaz was charged for a $18,510 withdrawal from Brit Well RX’s account, officials said.