United States Drug Enforcement Administration

MANHATTAN, N.Y. - Preet Bharara, the United States Attorney for the Southern District of New York and James J. Hunt, the Special Agent in Charge of the U.S. Drug Enforcement Administration’(DEA) New York Division, announced the conviction of Kevin Lowe, the owner of “Astramed,” a purported medical clinic with multiple locations in the Bronx, New York, and from which more than five million tablets of the prescription painkiller oxycodone were unlawfully distributed over a three-year period.  Lowe was convicted yesterday following a two-week jury trial presided over by U.S. District Judge Lorna G. Schofield.
Manhattan U.S. Attorney Preet Bharara said:  “As a jury unanimously found, Kevin Lowe operated a series of purported medical clinics that functioned as prescription pill drug trafficking dens where doctors wrote almost 35,000 medically unnecessary prescriptions for oxycodone, comprising oxycodone tablets with a street value of nearly $165 million.  With this guilty verdict and the 24 other convictions in this case, we have made an important step toward combatting the prescription pill trafficking problems plaguing the Southern District.  I would like to thank the Drug Enforcement Administration and the New York City Police Department for being our partners in this case.”

According to the allegations contained in the Indictment and the Government’s evidence during Lowe’s trial:

From approximately January 2011 until February 2014, a drug distribution ring operated out of “Astramed,” a purported medical clinic with multiple locations in the Bronx that Lowe owned and operated.  At these clinics, doctors working under LOWE’s direction wrote tens of thousands of medically unnecessary prescriptions for oxycodone, a highly addictive, prescription narcotic-strength opioid used to treat severe and chronic pain conditions.  Oxycodone prescriptions, once written, have enormous cash value to street-level drug dealers, who can fill prescriptions at most pharmacies and resell the resulting pills at vastly inflated rates.  Indeed, a single prescription for 180 30-milligram oxycodone pills has an average resale value in New York City of more than $6,000, and far more in nearby states.
       
Lowe capitalized on that black market for oxycodone by employing Board-certified, state-licensed doctors who were willing to write medically unnecessary prescriptions for large quantities of oxycodone in return for cash.   Lowe’s clinics, which accepted no insurance from patients seeking oxycodone prescriptions, typically charged $300 in cash for “doctor visits” that usually lasted just a minute or two, involved no actual physical examination, and consistently resulted in the issuance of a prescription for large doses of oxycodone, typically 180 30-milligram tablets, or a daily dosage of six 30-milligram tablets. 

Lowe’s clinics bore little resemblance to a standard medical office.  For example, on a daily basis, crowds of up to 100 people gathered outside the Astramed office on Southern (the “Clinic”) clamoring to see one of the doctors at the clinic in order to obtain a prescription for oxycodone.  Virtually none of these individuals had any medical need for oxycodone, or any legitimate medical record documenting an ailment for which oxycodone would be prescribed.  Instead, most of these individuals were members of “crews” - that is, they were recruited and paid by high-level drug traffickers, oxycodone (the “Crew Chiefs”), to pose as “patients” in order to receive medically unnecessary prescriptions from the Doctors.  The Crew Chiefs then arranged for and oversaw the filling of the resulting prescription at various pharmacies and took possession of the oxycodone pills to be resold on the street.  Crew Chiefs also paid the Clinic’s employees hundreds of dollars in cash at a time to get their Crew Members into the Clinic to see one of the Doctors. 

In total, between approximately January 2011 and February 2014, Astramed Doctors issued 34,925 medically unnecessary prescriptions for oxycodone, comprising nearly 5.5 million oxycodone tablets with a street value of more than $165 million.  Lowe alone collected more than $7 million in cash for these sham “doctor visits” during this time period. 

Lowe, 55, of Melville, New York, was convicted of one count of conspiracy to distribute and possess with intent to distribute oxycodone, which carries a maximum sentence of 20 years in prison.  Lowe is scheduled to be sentenced on August 10, 2015 at 4:30 p.m.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. 

Twenty-four additional participants in the drug distribution ring - including doctors, clinic employees, and drug traffickers who oversaw crews of “patients” whom they sent into the clinics in order to obtain medically unnecessary prescriptions - have previously pleaded guilty to their participation in the unlawful scheme.

Mr. Bharara thanked the Drug Enforcement Administration’s New York Division and the New York City Police Department for their work in the 15-month investigation, which he noted is ongoing. Mr. Bharara also thanked the Town of Orangetown Police Department, the Westchester County Police Department, the United States Department of Health and Human Services, the New York State Health Department’s Bureau of Narcotic Enforcement, the Office of the Medicaid Inspector General, New York City's Human Resource Administration, the New York State Attorney General’s Office Medicaid Fraud Control Unit, the Internal Revenue Service-Criminal Investigation and the El Dorado Task Force for their assistance.

The case is being prosecuted by the Office’s Narcotics Unit.  Assistant U.S. Attorneys Edward B. Diskant and Tatiana R. Martins are in charge of the prosecution.