United States Drug Enforcement Administration

MANHATTAN, N.Y. - Preet Bharara, the United States Attorney for the Southern District of New York, 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.  On May 4, 2015, LOWE was convicted of a conspiracy to distribute narcotics following a two-week jury trial presided over by U.S. District Judge Lorna G. Schofield.  Today, Judge Schofield sentenced LOWE to a term of 144 months in prison.                      

Manhattan U.S. Attorney Preet Bharara said: “Kevin Lowe and his co-defendants used a network of bad doctors and street-level dealers to flood the streets of New York City with millions of highly addictive, potent opioids, all under the guise of a legitimate medical clinic.  Instead of medical care, Lowe and others illegally dispensed opioids, enabling a vicious cycle of addiction that affects too many in our communities.  Thanks to the Drug Enforcement Administration and the New York City Police Department, this so-called ‘clinic’ is out of business and those responsible are been held accountable.”

According to the allegations contained in the Indictment and the evidence presented by the government 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 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 the 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. 

On May 4, 2015, after a two-week jury trial, 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.  In addition to the prison sentence, LOWE was ordered to forfeit $2,338,661.   LOWE has previously forfeited $455,351 in proceeds earned from his unlawful operation of the Astramed clinics and seized at the time of his arrest.

Twenty-three 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 been sentenced by Judge Schofield pursuant to guilty pleas and are included in the chart below.  Two defendants have pled guilty but have not yet been sentenced, and one defendant entered into a deferred prosecution agreement. 

Mr. Bharara thanked the U.S. Drug Enforcement Administration’(DEA) Tactical Diversion Squad- New York comprising agents and officers of the DEA, the New York City Police Department, the New York State Police, the Town of Orangetown Police Department and the Westchester County Police Department for their work on the investigation. Mr. Bharara also thanked, 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 Resources 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.