Melville Man Gets Prison Sentence for Black Market HIV Drug Scheme

A Melville man was sentenced Tuesday to 2 to 6 years in prison for illegally distributing HIV medication obtained from the black market to patients, according to the New York State Attorney General’s Office.

Glenn Schabel, 55, and his company, Glenn Schabel, Inc., were also ordered to forfeit $5,456,267 to the New York State Medicaid Program.

“This scheme not only defrauded Medicaid, but created a serious public health threat to many New Yorkers,” Attorney General Eric T. Schneiderman said in a statement.

In April 2012, the Attorney General’s Medicaid Fraud Control Unit arrested Schabel and three other individuals and charged 10 companies for allegedly distributing HIV prescription medication obtained on the black market through an online pharmacy in Melville. MOMS pharmacy also had satellite offices in Manhattan, Brooklyn and other states.

According to the AG, MOMS and its parent company Allion Healthcare, would dispense the medication to Medicaid recipients and billed the New York State Medicaid program for the tainted medication.

Schabel, the supervising pharmacist and compliance officer for MOMS pharmacy, pleaded guilty in March and admitted that he accepted more than $5 million in bribes over a four-year period. Schabel purchased $274 million worth of black market HIV medications from two others who were arrested, the AG Says.

The New York State Medicaid program reimbursed MOMS Pharmacy of more than $150,000,000 for the diverted medications dispensed to the patients that were covered by Medicaid, the AG says.

These black market prescriptions were illegally obtained from the street in batches, which included pills that were previously dispensed, stolen or expired, the AG says. Black market medications could cause patients adverse drug interactions, overdoses or a decline in health from not receiving the regulated prescriptions they were prescribed.

The leader of the scheme, Ira Gross, 63, of Babylon, was convicted by a jury in August. He is awaiting sentencing. Two other defendants, Stephen Manuel Costa and Harry Abolafia, also previously pleaded guilty.

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