On July 15, 2024, the United States District Court for the Eastern District of New York sentenced Jian Ai Chen, also known as "Maggie," to thirty (30) months in prison. Jian Ai Chen is also required to pay $11,323,292.36 in restitution as a part of the sentence. This comes after Jian Ai Chen pled guilty to the Federal Charges of Conspiracy to Commit Health Care Fraud and Conspiracy to Offer and Pay Health Care Kickbacks while under the employ of Jennan Comprehensive Medical Group, which merged with Rendr Physician Group in late 2022.
According to Federal Court Documents, the fraud perpetrated by Jian Ai Chen had been ongoing for more than ten (10) years at AC Pharmacy Corp and A Star Pharmacy Inc. Jian Ai Chen, a medical assistant and the owner of the two Brooklyn pharmacies, was arrested and arraigned on June 14, 2023, before Chief United States Magistrate Judge Lois Bloom.
On publicly available case documents and press releases, between January 2010 and January 2021, Chen paid over $5,000,000.00 in the form of kickbacks to Medicaid and Medicare beneficiaries. These payments were made so that beneficiaries would bring their prescriptions to AC Pharmacy Corp and A Star Pharmacy.
In addition to the kickback scheme, charging documents indicate that many of the prescriptions induced by criminal kickbacks were false and fraudulent, resulting in claims submitted to Medicare, Medicaid, and other insurance plans yet never dispensed to beneficiaries. According to Department of Justice press releases, Chen's pharmacies received approximately $101 million as a result of the scheme.
The source charges against Chen and Yiu were filed in federal court in Brooklyn in 2023 as a part of the Department of Justice's 2023 National Health Care Fraud Enforcement Action. The indictment, arrest, guilty plea, and imprisonment were the result of a methodically coordinated, nationwide law enforcement action that resulted in criminal charges against 78 defendants for their alleged participation in healthcare fraud and opioid abuse schemes that included over $2.5 billion in alleged fraud. The primary programs defrauded were those entrusted with the care of the elderly and disabled.
The Health Care Fraud Unit's Strike Forces included a team in Brooklyn that identified and pursued Chen but also teams in Dallas, Detroit, the Gulf Coast, Houston, Los Angeles, Miami, Newark, and Tampa.
United States Attorney General Merrick B. Garland, in a June 2023 Department of Justice Press Release, stated:
"These enforcement actions, including against one of the largest health care fraud schemes ever prosecuted by the Justice Department, represent our intensified efforts to combat fraud and prosecute the individuals who profit from it. The Justice Department will find and bring to justice criminals who seek to defraud Americans and steal from taxpayer-funded programs."
United States Attorney for the Eastern District of New York similarly stated:
"[T]he defendants abused the trust placed in them by Medicare and Medicaid by falsely billing these essential programs for their own enrichment. This enforcement action demonstrates our continued commitment to vigorously prosecute healthcare providers who steal from taxpayer-funded programs intended to help those in need."
In the same press release, FBI Assistant Director-in-Charge Michael J. Driscoll stated:
"[A]buse of Medicare and Medicaid harms not only the programs but also the everyday people whose tax money is used to fund these healthcare programs. The actions...highlight the FBI New York's commitment to ensuring that those willing to attempt to take advantage of taxpayer-funded healthcare programs are held accountable in the criminal justice system,"
Moreover, HHS-OIG Deputy Inspector Geberal Christian J. Schrank indicated:
"Federal health care programs are designed to provide access to high quality care to patients nationwide. When bad actors attempt to exploit those measures for illicit financial gain, they put greed before the needs and safety of their patients, and take valuable resources away from their intended recipients... [O]ur law enforcement partners are committed to defending the federal health care system against fraud."
Dr. John Yiu, another defendant employed by Jennan Comprehensive Medical Group, has similarly pled guilty and will be sentenced later this year.
