Valley Stream doctors nabbed in illegal opioid prescription scheme

Two Valley Stream doctors were among 13 indicted on April 7 in connection with schemes to defraud Medicaid and Medicare of millions of dollars, illegally sell prescriptions for opioid painkillers and launder money, according to the U.S. Drug Enforcement Administration.

Dr. Paul McClung and physical therapist Reynat Glaz, both of Valley Stream, were among those named by authorities in their investigation as having participated in the scheme.

“Hidden within our city were three pill mills disguised as medical clinics, seven drug dealers disguised as medical practitioners and a multi-million dollar scam defrauding NYC’s healthcare fund,” said DEA Special Agent-in-Charge James J. Hunt in a news release. “We estimate that these pill mills distributed six million diverted pills, worth $60 to $100 million, into the hands of drug dealers and opioid addicts.  This four-year investigation will have a significant impact on the availability of diverted prescription pills which are reported to have been misused by 80 percent of new heroin users.” 

Lazar Feygin, of Staten Island, and McClung (with office managers Konstantin Zeva, Rachel Smolitsky, Vyacheslav “Steve” Maksakov and Pavel Krasnou) are charged with running three medical clinics in Brooklyn that were engaged in a variety of criminal activity. The clinics allegedly defrauded Medicaid and Medicare by billing for millions of dollars in unnecessary medical tests. To induce patients to submit to these tests, Feygin and Mcclung, and other medical practitioners in their employment are charged with illegally providing patients with prescriptions for oxycodone, an addictive opioid painkiller, for no legitimate medical purpose.

Patients allegedly would not receive prescriptions for oxycodone — an addictive painkiller with a high resale value on the black market — unless they submitted to unnecessary procedures, which the clinics billed to Medicaid and Medicare. Members of the charged conspiracies also engaged in laundering money to conceal illicit proceeds. Authorities said Feygin enjoyed a lavish lifestyle that included extensive real estate holdings, frequent trips overseas and the regular purchase of luxury goods.

Feygin’s clinics received over $16 million in reimbursements from Medicaid/Medicare between early 2013 and early 2017, while PM Medical received over $8.6 million between 2013 and 2017. Both Feygin and McClung were in the top 10 highest reimbursed providers for all of MetroPlus Health Plan for three years from January 1, 2014 through December 31, 2016.

The investigation revealed that some medical practitioners employed by the clinics were pressured to order tests that were not medically necessary. For example, patients who had never complained of nerve-related conditions or heart problems were administered expensive nerve conduction diagnostic tests and echocardiographs by the clinics.

The investigation indicated that physical therapy sessions by Glaz might involve nothing more than a few minutes in a massage chair. Even though GLAZ allegedly knew these treatments fell below required standards of reimbursement, claims were still submitted. The investigation further revealed that patients were allegedly required to undergo these treatments as a condition of receiving prescriptions for oxycodone.

On Oct. 25, 2016, Zeva and Glaz discussed how Zeva should develop a numerical system to determine how many tests need to be ordered depending on how many patients and practitioners were at the clinic on a particular day.  In another call on November 23, 2016, Feygin told Zeva that more patients needed to be sent to see the psychiatrist, otherwise Feygin would be paying the psychiatrist more than the fees brought in.

In a PM Medical-related call, Maksakov discussed the need to vary diagnosis codes to avoid scrutiny from MetroPlus Health Plan.

An extensive financial investigation by the DEA’s Long Island Division, the Special Narcotics Prosecutor’s Office and New York/New Jersey High Intensity Drug Trafficking Area revealed the extent of the ill-gotten gains. The investigation identified numerous assets that will be the subject forfeiture proceedings, including domestic bank and brokerage accounts.

As part of the money-laundering scheme, clinics paid practitioners through a series of corporations and limited liability companies that allegedly served as shell companies. Some of the money was then funneled back into the clinics to pay business expenses.

For example, it was part of the conspiracies for Maksakov to promote illegal activities by paying the certain business expenses of PM Medical from a REGO Management, INC. bank account and for Pavel Krasnou to be paid by PM Medical via TRC Global Opportunity Inc., a corporation he owned and controlled.  Investigators determined that McClung, Maksakov and Krasnou each derived—either personally or through their shell companies—approximately $1 million in checks from PM Medical between August 2013 and July 2016.

Similarly, Feygin wrote more than $1 million in checks to promote the continuing illegal activity of Parkville; Smolitsky wrote more than $50,000 in checks to promote the continuing illegal activity of LF Medical. The Special Narcotics Prosecutor’s Office, DEA, and HIDTA determined that Feygin was provided personally over $2 million in checks from Parkville between September 2012 and September 2016, and $276,000 in checks between January 2015 and June 2016 by LF Medical.