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NYS Comptroller

THOMAS P. DiNAPOLI

Press Releases

September 24, 2015, Contact: Press Office (518) 474-4015

DiNapoli: Former Pharmacist Charged In $232,000 Medical Claims Fraud

Fake Prescriptions Billed to Medicaid and NYS Health Insurance Program

The former owner of a Long Island pharmacy was arrested Thursday for allegedly defrauding the state of $232,000 after the scam was uncovered in two audits by State Comptroller Thomas P. DiNapoli’s office.

William Davis, 62, the former owner of Davis Ethical Pharmacy in Rockville Centre, was charged with grand larceny in the second degree, a class C felony, for allegedly sending phony prescription records for reimbursement to Medicaid and the New York State Health Insurance Program (NYSHIP) from 2008 through 2011. Davis, who currently resides in Lake Ariel, Pennsylvania, was arraigned in Nassau County District Court.

“Thanks to our joint efforts with law enforcement, Mr. Davis’ four-year fraud was in vain and the money he stole will be returned,” DiNapoli said. “This serves as a warning to those who might consider health care rip-offs.  I thank Acting Nassau County District Attorney Madeline Singas’ office and the Department of Financial Services for their diligent work on this case.”

“The defendant claimed to own and operate an ethical pharmacy, but allegedly he stole more than $230,000 from the taxpayers of New York by submitting fraudulent billing claims,” Acting Nassau County District Attorney Singas said. “Thanks to the hard work of the State Comptroller’s Office, the NYS Department of Financial Services and our office, the defendant will now have to answer for his alleged crimes.”

The arrest follows a joint investigation by the Comptroller, the Nassau County District Attorney and the state Department of Financial Services (DFS). The improper payments were exposed when the Comptroller’s auditors sampled 840 of the nearly 60,000 claims paid to Davis Ethical, which were valued around $7 million. 

In one instance, the supposed prescribing physician was deceased when the prescription was written.
In another, United paid Davis Ethical $2,688 for an Aciphex prescription for acid reflux disease, though  the member named was not the prescribing physician’s patient. Davis Ethical also billed excessive quantities for 23 other prescriptions, overcharging NYSHIP $11,942 for them.

NYSHIP provides health insurance to some state and local government and school district employees and their families.  The state Medicaid Program provides prescription drug coverage for enrollees. During the audit period, Medicaid paid Davis Ethical $776,849 for 7,053 claims. Mr. Davis sold the business in December 2011.

To read the two audit reports, visit: http://www.osc.state.ny.us/audits/allaudits/093013/12s11.pdf and http://www.osc.state.ny.us/audits/allaudits/093013/12s10.pdf

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse.  New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at investigations@osc.state.ny.us, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236. Review prior cases at http://www.osc.state.ny.us/investigations/index.htm.

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