Office of Maryland Attorney General J. Joseph Curran, Jr.

July 24, 2000 Media Inquiries: Sean Caine 410-576-6357


Baltimore - Attorney General J. Joseph Curran, Jr. announced that Prince George’s County pharmacist Melvin Chaiet pled guilty in Circuit Court to conspiring with other pharmacists to adulterate prescription medications and hold them for sale. The Honorable Steven I. Platt sentenced Chaiet to one year in jail, with all but six months suspended, and ordered him to serve three years probation. In addition, he was sentenced to pay a total of $190,000 to the state’s Medicaid program for over-billings.

Chaiet, 62, of the 4600 block of Barbara Drive, Beltsville, is a licensed pharmacist and the principal owner of KayCee Drugs in District Heights, Maryland. KayCee specializes in dispensing supplies and drugs that are used in nursing homes and other long-term care settings. Prescription medications are commonly dispensed in monthly "bubble packs", pieces of cardboard with small plastic bubbles into which the medications are placed. Because many of KayCee’s prescriptions were for nursing home patients whose prescriptions often changed, bubble pack prescriptions often went unused. A KayCee pharmacist regularly collected these unused prescriptions and returned them to KayCee.

KayCee dispensed some of its prescriptions in sanitary single unit dose bubble packs, in which only one medication is placed in each bubble. Maryland regulations require that unadulterated drugs paid for by the Maryland Medicaid program and returned to the pharmacy must be credited to Medicaid within 60 days. The Attorney General’s Office was able to show that many of the single unit dose prescriptions returned to KayCee were paid for by Medicaid when they were issued, yet were not credited to Medicaid. The Court, therefore, ordered Chaiet and KayCee to repay the Maryland Medicaid program $90,000, representing three times the amount of the medication that was not credited to the program.

KayCee also dispensed prescriptions as multi-pill bubble packs, in which several different kinds of pills taken by a patient at the same time were grouped together in a single plastic bubble. Multi-pill bubble packed medications may not legally be re-dispensed, because when multiple pills are placed into a single bubble, the pills contaminate each other.

"Thousands of people in Maryland rely on Medicaid to subsidize healthcare costs," Attorney General Curran said. "When we learn someone is stealing from the Medicaid program, we will go after them and we will prosecute them."

From 1994 through 1999, KayCee's pharmacists regularly brought back unused prescriptions from its nursing home clients. These returns were taken by Chaiet and KayCee in order to place the adulterated drugs back on KayCee's shelves, intending to re-dispense them in violation of Maryland’s food and drug law and Board of Pharmacy regulations. Chaiet took the returned bubble packs and popped the pills out into large brown pharmacy bottles. Chaiet and other pharmacists, acting at his direction, then emptied the brown bottles, divided the pills and replaced the contaminated pills into bottles from which pills for new prescriptions were taken. Pills that were initially dispensed months earlier were simply returned to the currently open bottle of a like medication. The expiration dates and lot numbers were not tracked. As a result of these illegal activities, a search and seizure warrant executed by the Maryland State Police and the Attorney General’s Office revealed different colored pills in a single manufacturer’s bottle; manufacturer’s bottles having more pills inside than indicated on the label; and pills for which the pharmacy had no record of the correct expiration date or lot number.

KayCee first came under investigation for over-billing Medicaid for incontinency supplies. During a period of several years, KayCee over-billed Medicaid a total of $210,000 for adult diapers. Since the discovery by the state, KayCee has paid back $110,000 and was ordered to repay an additional $100,000 for the over-billed supplies in connection with the guilty plea.

This case was prosecuted by the Medicaid Fraud Control Unit of Maryland Attorney General’s Office. Chaiet is the second pharmacist prosecuted this summer for failure to properly credit or otherwise handle medications that were returned after having been billed to the Medicaid program.