Three indicted for alleged roles in drug ring defrauding Medicaid

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Three men – the alleged ringleader, a doctor and a pharmacist — were indicted Feb. 14 for their alleged role in a narcotics ring that defrauded Medicaid and each week distributed black-market prescription pain pills in part of New Jersey.

The ring was identified and arrests were made in October 2009.

Between April 2008 and February 2010, the three allegedly conspired with more than 30 others in an enterprise that unlawfully distributed prescription narcotics, including OxyContin and Percocet, in Hudson, Bergen, Monmouth and Ocean counties.

“We charge that these three men and their co-conspirators were responsible, on a weekly basis, for distributing thousands of dangerous narcotic pills across four New Jersey counties,” said New Jersey Attorney General Paula T. Dow in a statement. “Through this joint investigation with the Jersey City Police Department, we moved aggressively to shut down this ring and bring its members to justice.”

A state grand jury indicted Louis Lisi, 35, of Union City, N.J., who allegedly led the ring; Dr. Clifton Howell, 54, of West Orange, N.J., whose medical practice is on Newark Avenue in Jersey City, N.J.; and Amir Tadros, 33, also of Jersey City, a pharmacist in charge at Five Corners Pharmacy on Summit Avenue in Jersey City.

Charges include first-degree racketeering, second-degree conspiracy, second- and third-degree narcotics offenses, second-degree employing a juvenile in a drug distribution scheme, second-degree endangering the welfare of a child, second-degree health care claims fraud, third-degree Medicaid fraud, third-degree forgery and money laundering.

Lisi also faces first-degree charges of being a leader of a narcotics trafficking network.

The indictment stems from Operation MedScam, an ongoing investigation by the New Jersey Office of the Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit and the Jersey City Police Department’s Special Investigation Unit.

Another ringleader, two other pharmacists and 28 street-level drug dealers have already pleaded guilty in the case. A second doctor, Magdy Elamir, 57, of Saddle Brook, N.J., was indicted on July 15, 2010. The case against Elamir is still pending.

The indictment alleges that Lisi was one of the leaders of the enterprise who financed, organized, supervised and managed the subordinate members in the transportation and distribution of prescription narcotics, including Oxycodone and Percocet, across New Jersey.

The investigation revealed that the enterprise obtained fraudulent prescriptions for narcotics from licensed medical doctors, allegedly including Howell and Elamir, officials said.

Lower-level members of the ring were paid cash to solicit individuals, who were also paid cash, to see the doctors to obtain the fraudulent prescriptions.

The doctors allegedly generated prescriptions for thousands of pain pills for the purported patients, who in fact were never examined or who had no medical need for the pills. Medicaid was allegedly billed for the phony doctor visits.

The enterprise also involved licensed pharmacists, allegedly including Tadros, who unlawfully dispensed prescriptions for thousands of narcotic pills in exchange for cash. The pharmacists dispensed the drugs even though the prescriptions were often not in the names of the enterprise members who obtained the drugs. In addition, the pharmacists, allegedly including Tadros, billed Medicaid for prescriptions that were not, in fact, dispensed, officials said.

The enterprise accumulated thousands of prescription pain pills each week that were sold across New Jersey. A single 30 milligram OxyContin pill, known as a “blue,” typically sells for $10 to $20 on the street, while a 10 milligram Percocet pill sells for $5 to $8.

Lisi is also accused of soliciting and hiring people 17 years old or younger to participate in the drug ring, and that he abused or neglected two children, born in 1999 and 2001, who were in his legal care.

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