A federal jury convicted a Brooklyn clinic owner in a wide-ranging scheme that funneled unnecessary prescriptions, sham testing, and kickbacks into Medicare and Medicaid, producing more than $52 million in false claims.
A jury in the Eastern District of New York found 78-year-old Tony Brown-Arkah guilty for his role in conspiracies to commit health care fraud, illegal distribution of Suboxone, and paying and receiving illegal kickbacks. Brown-Arkah owned American Medical Centers, a Brooklyn clinic that presented itself as a substance abuse treatment provider but, according to the evidence, served a different purpose.
The trial record shows AMC lured patients with prescriptions for Suboxone, a Schedule III narcotic intended to treat opioid use disorder. As one witness testified, the medication “is commonly abused by prison inmates by boiling the medication and dripping it into users’ eyes,” and the clinic environment allowed dealers to offer cash for prescriptions right outside the building.
Testimony included an account of staff directing a patient to a van where he could sell his Suboxone if he did not want it. Many prescriptions were signed by a nurse practitioner living in Florida who never saw or spoke with the patients, while people arriving at AMC faced invasive and medically unnecessary testing to obtain medication.
Prosecutors say Brown-Arkah billed Medicare and Medicaid for services that were never provided, including office visits where he, who was not a medical provider, was the only staff member to meet patients. Witnesses also described prescriptions issued when patients were not taking the medication, and noted that the absence of Suboxone in laboratory results is a clear warning sign of diversion.
Brown-Arkah paid cash kickbacks to patients, and one of those payments was recorded on undercover video by a confidential source. In that recording, Brown-Arkah describes others who pay patients illegal kickbacks and bill for unnecessary services, saying “that’s why they go to jail . . . that’s when the government busts ‘em!”
The defendant steered patients toward medically unnecessary lab testing and received thousands of dollars monthly from a laboratory in return for referrals. To hide those payments he set up a shell company, created a sham contract, and lied to investigators about the purpose of the transfers.
Authorities say Brown-Arkah and his co-conspirators caused more than $52 million in false claims to Medicare and Medicaid. The jury returned convictions that included conspiracy to commit health care fraud, 12 counts of health care fraud, conspiracy to illegally distribute narcotics, three counts of illegal distribution of narcotics, conspiracy to pay and receive kickbacks and to defraud the United States, and two counts of receipt of kickbacks.
A sentencing date has not been set. Statutory maximums cited at trial include up to ten years in prison on each health care fraud, narcotics, and kickback count, and up to five years on the conspiracy to pay and receive kickbacks and defraud the United States count, with a federal judge to determine any final sentence after considering the Sentencing Guidelines and other factors.
The case was announced by senior Justice Department officials and involved multiple federal law enforcement agencies. Investigators included the Drug Enforcement Administration, the HHS Office of Inspector General, Homeland Security Investigations, and IRS Criminal Investigation, with assistance from the New York City Police Department and the New York City Human Resources Administration.
Trial work was handled by prosecutors in the Criminal Division’s Fraud Section, with Trial Attorneys Miriam Glaser Dauermann and Margaret Mortimer leading the prosecution. The Department of Justice recently announced a National Fraud Enforcement Division aimed at escalating investigations and prosecutions of fraud against federal benefit programs.
