Long Island Pharmacy Owner Convicted Of $1 Million "phantom" Drug Scam

Attorney General Spitzer today announced that a Smithtown pharmacy owner has been convicted of stealing more than $1 million from taxpayers by billing the Medicaid program for thousands of expensive drugs and over-the counter items that were never dispensed to customers or even stocked in his drugstore. The illegal billings took place between January 1999 and September 2001.

Following a five-week trial in Suffolk County Court, a jury yesterday found John Grimaldi and his corporation, Grim Thirty-Three, Inc. (which does business as Terry Road Pharmacy) guilty of one count of Grand Larceny in the First Degree and five counts of Offering a False Instrument for Filing in the First Degree

Judge Joseph Farneti, who presided at trial, set sentencing for April 25. Grimaldi faces up to 25 years in prison. Both Grimaldi and the corporation also face a possible fine equal to twice the amount of the illegal gain.

"Today's guilty verdict serves not only as a tremendous victory to taxpayers, whose hard-earned dollars fund the Medicaid program, but as a warning to other unscrupulous health care providers who might be tempted to steal from the Medicaid program," said Spitzer. "My office has zero tolerance for such fraud and will vigorously prosecute those individuals who steal from taxpayers and the Medicaid program."

Following two days of deliberation, the jury found Grimaldi and his corporation guilty of having fraudulently billed the Medicaid program for more than $1 million in non-existent pharmaceuticals – including more than $500,000 worth of the nutritional supplement Ensure – that the defendant claimed was dispensed over a nearly three-year period.

Grimaldi, 42, lives at 23 Arbor Field Way in Lake Grove. He is the owner and supervising pharmacist of Terry Road Pharmacy, located at 347 Terry Road in Smithtown.

Special Assistant Attorneys General Michael L. Rice and Alan Buonpastore, Deputy Director and Director, respectively, of the Medicaid Fraud Control Unit's Long Island Regional Office, prosecuted the case. Assisting on the case were former Supervising Associate Special Auditor Investigator Thomas Calissi, Associate Special Auditors Investigator Kristine Stelling and Joann Satchwill, and Special Investigators Steven Hill and Brian Dunne.