The scheme: A ring composed of a doctor, a man whose identity remains hidden and three others paid older folks to order expensive pharmaceutical drugs through Medicare and Medicaid. Then those drugs were repackaged and sold to pharmacies in Florida, Georgia, New York and Puerto Rico.
Those pharmacists, police said, had no idea they were often buying stolen and outdated psychopathic and AIDS drugs that could cause harm to their users.
“It’s a case that impacts us in the pockets and also puts a lot of our citizens in danger,” said Miami-Dade Deputy Police Director Juan Perez.
Tuesday morning, a task force made up federal and local law enforcement rounded up Dax Osle, 41, Yulia Martinez, 31, Jose Capote, 38, and gynecologist Rafael Prats, 61, and charged them all with organized scheme to defraud, trafficking in pharmaceutical contraband and conspiracy to traffic in pharmaceutical contraband.
A fifth man was also charged, but members of the U.S. Drug Enforcement Administration, Health and Human Services, the Food and Drug Administration and Miami-Dade police, would not name him.
“He’s in custody,” Perez said.
The operation began nearly two years ago when the DEA asked Miami-Dade police for assistance, said police Maj. Ariel Artime. It escalated when task members uncovered a makeshift pharmacy complete with pharmaceutical drawers for pills and a dumbwaiter to deliver them upstairs. The setting was built behind a hidden wall with a staircase that led upstairs to an elaborate setting stocked with chandeliers and golden artifacts at 7175 SW 47th St., police said.
During the investigation, more than $3.5 million in cash, and jewelry, art and vehicles worth another $1 million were uncovered, police said.
Assistant Statewide Prosecutor Stephen Immasche said the alleged fraud ring cut across state lines, running from Miami-Dade through Broward and into Leon County.
“But most of the activity was in Dade,” Artime said.
South Florida is plagued by insurance fraud, often involving Medicare and Medicaid. Earlier Wednesday the Miami-Dade state attorney announced the arrest of 31 people as part of Operation Flames and Flood II. The scheme involved creating fake fires and floods throughout the state, and the collection of more than $7 million from insurance companies.
Federal agents and the U.S. attorney’s office in Miami have prosecuted more than 1,500 defendants in South Florida for Medicaid fraud, estimated at more than $3 billion, since 2007. The claims include false filings for medical equipment, drug-infusion services, home healthcare, physical therapy and mental health treatment.
Perez, the deputy police director, was speaking directly to that Wednesday when he said the chain of control of drug sales mandated by the FDA was subverted by the fake pharmacy scheme.
“We’re revealing this,” Perez said, “because we’re coming for you. Miami has always been known as number one in [insurance] fraud.”