LOS ANGELES, CA (Catholic Online) - Medicaid beneficiaries in New York, including AIDS patients and other patients that required expensive drugs, sold their prescriptions to some of the defendants for cash in lieu of using them for treatment.

The buyers then marketed the pills to pharmacies and other wholesale prescription drug companies in New York, New Jersey, Pennsylvania, Florida, Texas, Massachusetts, Utah, Nevada, Louisiana and Alabama, according to authorities.

Highly expensive medications, that cost more than $1,000 a bottle were resold and bartered.

"These defendants ran a black market in prescription pills involving a double-dip fraud of gigantic proportions," Preet Bharara, the U.S. attorney for the southern district of New York says.

"It worked a fraud on Medicaid -- in some cases, two times over -- a fraud on pharmaceutical companies, a fraud on legitimate pharmacies, a fraud on patients who unwittingly bought second-hand drugs, and ultimately, a fraud on the entire health care system."

The accused made a profit off the difference between the often negligible Medicaid cost to the patient and the hundreds of dollars per bottle they charged the pharmacies that sold the second-hand prescriptions to unwitting customers.

As expected, "the scheme posed serious health risks at both the collection and distribution ends," Janice K. Fedarcyk, FBI assistant director says.

"People with real ailments were induced to sell their medications on the cheap rather than take them as prescribed, while end-users of the diverted drugs were getting second-hand medicine that may have been mishandled, adulterated, improperly stored, repackaged and expired."

Sixteen million dollars worth of prescription drugs -- 33,000 bottles and more than 250,000 loose pills, were "kept in uncontrolled and sometimes egregious conditions" by some of the suspects, according to the FBI.

"It's one thing when people sell their blood for money; it's another when they sell their drugs, especially when the diversion compromises the pharmaceutical supply with tainted and outdated drugs," Raymond W. Kelly, commissioner of the New York City Police Department says.

Anyone who purchased second-hand prescription drugs or was victimized by the scheme is urged to call the FBI hot line at 212-384-3555.

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