Pharmacy Owner Pleads Guilty to $25M Health Care Fraud Scheme

A New York man pleaded guilty today to conspiring to defraud Medicare and Medicaid of more than $25 million for medically unnecessary prescriptions that were induced by kickbacks and bribes. 

According to court documents, Dacheng Lu, aka Bruce Lu, 44, of Great Neck, was a part owner of 888 Pharmacy Inc. (888) and Huikang Pharmacy Inc. (Huikang). Between January 2015 and December 2022, Lu and his co-conspirators referred Medicare beneficiaries and Medicaid recipients to medical practices that prescribed medically unnecessary topical medications and pain patches, which 888 and Huikang billed to Medicare and Medicaid. In exchange for writing medically unnecessary prescriptions, Lu and his co-conspirators provided the medical practices kickbacks and bribes in the form of rent and office staff. 

Lu pleaded guilty to conspiracy to commit health care fraud. He is scheduled to be sentenced on Jan. 24, 2024, and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG), and Assistant Director in Charge James Smith of the FBI New York Field Office made the announcement.

HHS-OIG and the FBI are investigating the case.

Trial Attorney Patrick J. Campbell of the Criminal Division’s Fraud Section is prosecuting the case.

The Fraud Section leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Strike Force Program. Since March 2007, this program, comprised of 15 strike forces operating in 24 federal districts, has charged more than 4,200 defendants who collectively have billed the Medicare program for more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to hold providers accountable for their involvement in health care fraud schemes. More information can be found at www.justice.gov/criminal-fraud/health-care-fraud-unit.