Leader Of Miami Crew Sentenced To 63 Months In Prison For Defrauding Banks And Cryptocurrency Exchange Of More Than $4 Million
Damian Williams, the United States Attorney for the Southern District of New York, announced today the guilty pleas of NERIK ILYAYEV and MUKHIDDIN KADIROV for their respective roles in HIV medication fraud, no-fault automobile insurance fraud, and money laundering schemes totaling over $6 million. ILYAYEV pled guilty to conspiracy to commit healthcare fraud for using two different pharmacies to defraud Medicare and Medicaid in connection with HIV medication claims and to defraud no-fault automobile insurance providers in connection with other medication claims. KADIROV laundered several million dollars in fraud proceeds in connection with the HIV fraud scheme. ILYAYEV and KADIROV pled guilty today before U.S. District Judge Gregory H. Woods.
U.S. Attorney Damian Williams said: “Nerik Ilyayev brazenly defrauded Medicare and Medicaid and New York’s no-fault automobile insurance providers of over $6 million. To execute his schemes, Ilyayev sourced pharmaceuticals from illegitimate sources and worked with others to pay kickbacks to low-income individuals. Mukhiddin Kadirov facilitated the Medicare and Medicaid fraud by laundering millions in crime proceeds through shell companies. Both Ilyayev and Kadirov went to great lengths to conceal their role in these crimes, including using the identities of other people. Ilyayev and Kadirov will now pay for their crimes, and this Office will not stop pursuing those who seek to profit by defrauding our healthcare system.”
According to the Complaint, Information, and statements made in open court:
From approximately February 2021 through March 2022, ILYAYEV owned and operated a pharmacy in Manhattan (“Pharmacy-1”). ILYAYEV used Pharmacy-1 to pay illegal kickbacks to low-income HIV patients to recruit them to fill prescriptions for expensive HIV medications at Pharmacy-1 and to obtain HIV medications from unlawful sources. ILYAYEV, on behalf of Pharmacy-1, then submitted fraudulent insurance claims to Medicare and Medicaid to cover the cost of the HIV medications. In order to conceal his role in the fraud scheme, ILYAYEV used the identity of another person (“Individual-1”) and pretended to be Individual-1 to own and operate Pharmacy-1 using Individual-1’s identity. Medicare and Medicaid collectively paid approximately $5.2 million in fraudulent claims for HIV medications to Pharmacy-1.
After shutting down Pharmacy-1, ILYAYEV took control of another pharmacy in Queens, New York (“Pharmacy-2”). Again, to conceal his role in the fraud, ILYAYEV used the identity of another person (“Individual-3”) and pretended to be Individual-3 to own and operate Pharmacy-2. Pharmacy-2 submitted fraudulent insurance claims to no-fault automobile insurance providers. Pharmacy-2 defrauded the no-fault automobile insurance providers of approximately $1.2 million. In addition, Pharmacy-2 unlawfully sold pharmaceuticals to other pharmacies that ILYAYEV had obtained from illegitimate sources.
KADIROV participated in a money laundering network that primarily launders healthcare fraud proceeds (the “Money Laundering Network”) that the Federal Bureau of Investigation (“FBI”) has been investigating since approximately 2020. Members of the Money Laundering Network typically deposit checks from healthcare companies that represent healthcare fraud proceeds into New York-based bank accounts held by shell companies. The shell companies often purport to be wholesale companies and use terms like “wholesale” in the company name to make the check deposits from the healthcare companies appear less suspicious to banks and law enforcement. The conspirators controlling the shell companies collect cash typically from U.S.-based individuals who want to remit funds, often to Uzbekistan, through unlicensed channels. The conspirators controlling the shell companies then provide that cash, minus a fee, to the conspirators providing the healthcare checks. The conspirators controlling the shell companies next typically wire the check deposit proceeds from the shell companies to Chinese or other foreign companies to purchase goods from those foreign companies. The foreign companies ship the goods to importers in Uzbekistan. The importers pay the Uzbekistan-based partners of the conspirators operating the shell companies in U.S. Currency for the goods. Those Uzbekistan-based partners would then give the U.S. currency to the families and friends of the individuals who had provided the cash to the conspirators controlling the shell companies in New York.
As part of his participation in the Money Laundering Network, KADIROV laundered approximately $4.2 million of Pharmacy-1’s fraud proceeds. KADIROV used three bank accounts in the name of three shell companies that were purportedly wholesale companies (the “Shell Companies”) to launder Pharmacy-1’s fraud proceeds. The Shell Company bank accounts were opened in the name of another person (“Individual-2”), although KADIROV controlled the bank accounts. KADIROV took other steps to conceal his role in the money laundering scheme, including using a burner phone in connection with the Shell Company bank accounts, and he concealed his face when using ATMs to conduct transactions using the Shell Company bank accounts. Pharmacy-1 deposited approximately $4.2 million in checks with the Shell Companies. Consistent with the operations of the Money Laundering Network, the Shell Companies wired most of the check deposits to companies abroad, including China, Ukraine, and Russia.
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ILYAYEV, 36, of Queens, New York, pled guilty to one count of conspiracy to commit healthcare fraud, which carries a maximum potential sentence of 10 years in prison.
KADIROV, 44, of Queens, New York, pled guilty to one count of conspiracy to commit money laundering, which carries a maximum potential sentence of 20 years in prison.
The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only, as the sentencing of the defendants will be determined by the judge.
Mr. Williams praised the outstanding investigative work of the FBI and the U.S. Department of Health and Human Services, Office of the Inspector General. Mr. Williams also thanked the National Insurance Crime Bureau and the Investigations Medicare Drug Integrity Contractor for their assistance in the investigation.
The case is being handled by the Office’s Money Laundering and Transnational Criminal Enterprises Unit. Assistant U.S. Attorney Cecilia E. Vogel is in charge of the prosecution.