Juan Poveda, owner of CSE Drug Corp., and manager allegedly stole $3M from Medicaid, AG says

A Nassau County man who owns a Queens pharmacy has been indicted on charges that he and the pharmacy manager allegedly stole more than $2.9 million from Medicaid by falsely billing for HIV medications that were never dispensed, prosecutors said Tuesday.

Juan Poveda, 32, of Mineola, the owner of CSE Drug Corp., which does business as Santiago Pharmacy, and Javier Burbano, 32, of Long Island City, Queens, manager of Santiago Pharmacy in Flushing, Queens, were indicted on charges of first-degree grand larceny, second-degree health care fraud and for violating the New York Social Services Law for unlawfully paying kickbacks to Medicaid beneficiaries, prosecutors said. 

Prosecutors alleged in court documents that Poveda and Burbano stole more than $2.9 million from Amida Care, a Medicaid-funded managed care organization, by billing for drugs including Biktarvy, an antiretroviral medication that treats HIV/AIDS, that were either not legally obtained or that never existed.

“We trust pharmacies to attend to the needs and welfare of their patients, not to take advantage of our most vulnerable neighbors to line their own pockets,” said Attorney General Letitia James, whose office is prosecuting the defendants. “People living with HIV are able to live full and healthy lives by taking wholesome medications as prescribed by their doctors. Scams like the one alleged in this indictment cheat New Yorkers out of their health. Stealing from Medicaid is a reprehensible crime, and New Yorkers can count on my office to hold these bad actors accountable.”

James Kousouros, the Manhattan-based attorney for Poveda, said: "My client Mr. Poveda, was contacted [by authorities].  He was not in the state and he voluntarily returned and surrendered himself so that he can properly address these charges in court." 

Burbano's attorney could not be reached. 

Poveda, Santiago Pharmacy, and B & H Health Distributors, Inc., a corporation that prosecutors allege is registered to Juan Poveda, were also charged with first-degree money laundering.

Santiago Pharmacy, Pobal Cargo LLC, a corporation prosecutors said is allegedly registered to a relative of Poveda, were indicted on a charge of second-degree money laundering for allegedly conducting financial transactions designed to conceal the illegally obtained funds, prosecutors said. 

According to prosecutors, Poveda and Burbano allegedly paid or directed others to pay cash kickbacks to Medicaid recipients to encourage people to fill their HIV prescriptions at Santiago Pharmacy, which then billed Medicaid.

State law prohibits pharmacies from paying or offering to pay anyone for the referral of medical services paid for by Medicaid.

Poveda allegedly attempted to hide the money received by Medicaid by funneling the proceeds from Santiago Pharmacy accounts to pass-through bank accounts without any apparent business operations, including B & H Health Distributors Inc. and Pobal Cargo, LLC, prosecutors said. 

State Supreme Court Justice Michelle Johnson set Poveda's bail at $500,000 cash, a $1 million partially secured bond or a $750,000 insurance company bond, which the defendant posted, prosecutors said. 

Burbano's bail was set at $500,000 cash, a $1.5M insurance company bond or $1.5M partially secured bond, prosecutors said. 

By Nicole Fuller

nicole.fuller@newsday.com@NicoleFuller

Nicole Fuller is Newsday's senior criminal justice reporter. She began working at Newsday in 2012 and previously covered local government.