$24.4M in Fake Scripts, Kickbacks in Cash and Gift Cards: New York Pharmacy Owner Gets 63 Months for Medicare Fraud
A New York pharmacy owner was sentenced to more than five years in federal prison for his role in a multimillion-dollar health care fraud and money laundering scheme, federal prosecutors said.
Taesung “Terry” Kim, 61, of Harrison, New York, was sentenced to 63 months in prison after pleading guilty to conspiracy to commit money laundering. The case stems from a long-running scheme involving fraudulent billing to federal health care programs, including Medicare.
According to court records, Kim co-owned several retail pharmacies in Brooklyn and Queens and participated in a scheme that, between 2015 and 2022, generated approximately $24.4 million in claims for prescription drugs that were medically unnecessary. Prosecutors said Kim and his associates obtained prescriptions by paying kickbacks and bribes to medical providers and customers.
“Mr. Kim’s scheme to pad his pockets with $24 million in taxpayer dollars by peddling unnecessary prescription drugs is despicable and dangerous,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “This administration is making clear: we will hold accountable anyone who jeopardizes the health of millions of American adults by stealing from Medicare.”
Authorities said medical providers were offered incentives such as office rent and staffing support in exchange for directing prescriptions to Kim’s pharmacies. Customers were also allegedly paid, including through cash and gift cards, to fill prescriptions at those locations.
Prosecutors said Kim then laundered the proceeds through a network of companies designed to appear legitimate. These entities were used to facilitate payments tied to the scheme and to distribute profits among those involved.
“Taesung (Terry) Kim attempted to hide years of health care fraud through illicit kickbacks and bribes. Through the hard work of the FBI and the Department of Health and Human Service – Office of the Inspector General, we were able to peel back the layers of deception to uncover this criminal scheme,” said Assistant Director in Charge James C. Barnacle Jr. of the FBI New York Field Office. “The FBI will continue to work with our law enforcement partners to identify and hold accountable individuals defrauding the American people.”
“The defendant deliberately exploited patients and the Medicare program by orchestrating kickback schemes and laundering millions in fraudulent prescription proceeds to fuel his own greed,” said Acting Deputy Inspector General for Investigations Scott J. Lampert of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “Today’s sentence reinforces HHS-OIG’s continued commitment, alongside our law enforcement partners, to dismantling schemes that abuse federal health care programs and ensuring those who perpetrate them are brought to justice.”
In addition to the prison sentence, a federal judge ordered Kim to pay $24.4 million in restitution and to forfeit $6 million in assets, including bank accounts and real estate linked to the scheme.
Kim’s co-conspirator, Feng “Jeff” Jiang, 43, of Flushing, New York, was previously sentenced to 15 months in prison in connection with the case.
Kim pleaded guilty in December 2024.
2M in Bribes, 11M in Credits, Zero Affordable Homes: Hawaii Attorneys and Businessman Head to Prison
Three men, including two attorneys and a businessman, have been sentenced to federal prison for their roles in a bribery scheme tied to affordable housing projects on Hawaii’s Big Island, federal prosecutors said.
Gary Charles Zamber, 56, of Keaau, Hawaii, was sentenced to 70 months in prison. Rajesh Pankaj Budhabhatti, 65, of Morro Bay, California, received a 90-month sentence, while Paul Joseph Sulla, 79, of Hilo, Hawaii, was sentenced to 60 months. The three were convicted in June 2025 following a jury trial in federal court in Hawaii.
Prosecutors said the defendants conspired to bribe a public official at the Hawaii County Office of Housing and Community Development in exchange for favorable treatment on development agreements intended to support affordable housing. The official, identified as Alan Scott Rudo, served as a housing specialist and played a role in reviewing and approving such projects.
“This wasn’t just corruption – it was a calculated betrayal of the very community the defendants were supposed to serve,” said Assistant Attorney General A. Tysen Duva of the Justice Department’s Criminal Division. “Instead of building homes for struggling families looking for an onramp to a better life, the defendants built a scheme to enrich themselves, paying millions in bribes and kickbacks while pretending to help those in need. That kind of greed doesn’t just break the law – it erodes trust, damages institutions, robs honest businesses of opportunities and harms American citizens. The Criminal Division is committed to pursuing those who abuse positions of trust for personal gain.”
According to court records and trial evidence, the men paid or attempted to pay nearly $2 million in bribes and kickbacks to Rudo. In return, prosecutors said, Rudo used his position to help secure county approval for three development agreements involving the defendants’ companies.
The agreements were tied to projects that were supposed to provide affordable housing for local residents. However, authorities said no housing units were ever built. Instead, the defendants obtained more than $11 million in land and affordable housing credits through the agreements.
Prosecutors said the scheme involved Luna Loa Developments LLC, West View Developments LLC, and Plumeria at Waikoloa LLC. The benefits obtained through the agreements included land and credits that could be used or sold in connection with other development activities.
“Driven by greed, the defendants sought to enrich themselves at the expense of the Hawaiian community, diverting millions in much needed affordable housing resources intended to benefit Hawaii County’s poor and disadvantaged into the defendants’ own pockets,” said U.S. Attorney Ken Sorenson for the District of Hawaii. “Public corruption undermines faith in our institutions and will not be tolerated. We pledge to hold accountable those who seek to victimize the people of Hawaii by compromising our public officials and institutions for their own greed and personal gain.”
Sulla, Zamber and Budhabhatti were convicted of conspiracy to commit honest services wire fraud and multiple counts of honest services wire fraud. Sulla was also convicted of money laundering.
Rudo previously pleaded guilty and testified during the trial. He is scheduled to be sentenced at a later date.
“This sentencing marks another step toward accountability for those who pollute the integrity of our government institutions with bribes and kickbacks,” said Special Agent in Charge David Porter of the FBI Honolulu Field Office. “The defendants’ criminal schemes amounted to more than bribery and fraud — they stole opportunities from Big Island families and our community as a whole. The FBI, alongside our partners, will never stop working to pursue those who undermine the public’s trust and weaken the foundations of our community through corruption and deceit.”
Zamber and Sulla have had their law licenses suspended, preventing them from practicing law in Hawaii.
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