Black Market AIDS Ring Members Apprehended for Diverting Drugs from Medicaid Recipients

December 1, 2005

Florida Attorney General Charlie Crist and U.S. Attorney Alexander Acosta today announced the arrests of four individuals, including two Miami physicians, for their participation in an organization that illegally diverted millions of dollars worth of highly valued AIDS drugs from Medicaid recipients to resell on the black market.

U.S. Marshals arrested Onelio S. Baez, 65, the individual responsible for constructing, funding and directing the operation, and Juan Carlos Mateo, 44, a patient recruiter and runner who was employed by Baez to recruit Medicaid recipients to participate in the scheme. The two Miami doctors, Luis Jacinto Marti, 73, and Jorge Arnaldo Valido, 48, are accused of aiding Baez and Mateo by writing prescriptions for expensive drugs that were neither necessary for nor received by the Medicaid recipients.

“There are few actions lower than trying to profit from drugs intended for AIDS patients,” Crist said. “These arrests represent an outstanding example of teamwork paying off for the people of Florida. U.S. Attorney Alexander Acosta and his team were wonderful partners in this successful effort to shut down a black market operation.”

The arrests come after a lengthy joint investigation conducted by the Florida Attorney General’s Medicaid Fraud Control Unit and the U.S. Attorney’s Office in Miami. The investigation revealed that Baez built a large criminal organization made up of corrupt medical professionals, family members and friends. Together, they ran a scheme that fraudulently used Florida Medicaid funds to obtain millions of dollars in human immune globulin, which is used to treat patients with AIDS.

Members of the fraud ring recruited and paid Medicaid recipients from the streets to visit Marti and Valido. The doctors prescribed expensive medications, created bogus medical records to document the “illnesses,” wrote prescriptions and used cooperating pharmacies to fill those prescriptions. Certain pharmacies billed Medicaid more than $1 million for the drugs, which were then diverted and sent to a broker. In turn, the broker sold the medication to buyers who weren’t concerned that the drugs lacked pedigree papers required by law. Cash from these black market drug sales was then funneled back to the ring leaders, who pocketed the proceeds.

Attorney General Crist and U.S. Attorney Acosta pointed to this operation as an example of what can be achieved through mutual cooperation and interest. They said they anticipate additional aggressive approaches to combat pharmaceutical diversion in South Florida.

Each of those arrested will be prosecuted for one count of conspiracy to defraud the United States and 16 counts of committing healthcare fraud and paying kickbacks.

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