A pharmacist who pleaded guilty to criminal diversion of prescription medications and receipt of commercial bribes will pay $5.4 million to the New York State Medicaid Program and could serve 7 years in state prison.

Pharmacist Glenn Schabel, 55, is the owner of Glenn Schabel Inc, which was involved in a nationwide scheme to divert HIV medication to patients, said Attorney General Eric T. Schneiderman in a press release. 

In addition to the diversion and bribe charges, Schabel also pleaded guilty to money laundering in the first degree. These convictions were part of the “Operation Black-Market Meds” investigation of the attorney general’s Medicaid fraud control unit.

Schabel has surrendered his pharmacist license.

“This defendant, a licensed pharmacist, abused the public’s trust and became a participant in this multi-million dollar scheme that at its core preyed on the sick,” Schneiderman said in the press release. “My office will continue to protect taxpayers and consumers from schemes that threaten the safety of the public.”

Back in April 2012, Schabel and 3 other individuals plus 10 companies were discovered to have been using bogus prescription medication wholesalers in Alabama, Mississippi, North Carolina, and California. They used these networks to launder money and sell more than $274 million in diverted medications, according to the attorney general.

The prescription medications were from illegal or unknown sources, including medications that were previously dispensed to other patients and then resold on the black market. These black market medications would then be transferred to MOMS Pharmacy, which had been headquartered in Melville, New York. (Schabel was the supervising pharmacist and compliance officer for MOMS Pharmacy.)

Schabel was involved in dispensing these diverted medications to MOMS Pharmacy patients, many of whom were Medicaid recipients, the attorney general’s press release stated.
MOMS Pharmacy was reimbursed more than $150 million by the New York State Medicaid program for the diverted medications dispensed to its patients.

“Diverted medication poses a serious health risk to the public due to its unknown origin and quality,” the attorney general’s press release stated. “In some cases, diverted prescription medication is counterfeit, expired, not properly stored, or is mislabeled.”

In court, Schabel admitted that he accepted more than $5 million in bribes over a 4-year period. In addition, he acknowledged that he received prescription medications on behalf of the pharmacy from individuals that he knew were not authorized by law to be selling the medication.