Allegheny, Beaver Co. Pharmacists Arrested In $1 Million Prescription Drug Fraud Case

Attorney General Tom Corbett announced Tuesday that agents from the Attorney General's Medicaid Fraud and Insurance Fraud Sections have filed criminal charges against two pharmacists accused of conspiring to fabricate insurance claims for nearly $1 million worth of prescription drugs that were never given to patients.

William M. Sadowski, 43, of McKees Rocks and Eric J. Miladin, 43, of Monaca were arrested in the case.

Corbett said Sadowski is a licensed pharmacist and the former co-owner of Servatus Pharmacy, located in the North Hills section of Pittsburgh. Miladin was a pharmacist employed at Servatus Pharmacy.

According to the criminal complaint, Sadowski conspired to submit false claims to the Pennsylvania Medicaid program and private health insurance companies for high-cost medications that were supposedly given to patients at the Allegheny Valley School, a facility for individuals with intellectual and developmental disabilities. Sadowski allegedly submitted more than $645,000 worth of insurance claims for medications that were not prescribed by any doctors and were not dispensed to any residents at Allegheny Valley School locations in Pittsburgh or Harrisburg.

Corbett said that Sadowski also allegedly submitted more than $180,000 in false claims to Highmark Insurance Company, using the names of employees who worked for businesses in the area where the pharmacy was located. The investigation determined that these medications were never authorized by any doctors and that the drugs were not provided to any patients.

Additionally, Sadowski and Miladin allegedly conspired to use the names of inmates at the Beaver County Jail to submit false claims for drug rebates, using various coupons provided by prescription drug manufacturers. At the time, the Servatus Pharmacy was contracted to provide emergency medication to the Beaver County Jail.

Corbett said that Sadowski and Miladin are accused of creating fictitious prescriptions and submitting claims for more than $155,000 in rebates for drugs such as Levitra, an erectile dysfunction medication; Marinol, a synthetic marijuana; Restoril, a narcotic sleep medication and Pexeva, an expensive antidepressant.

"Medicaid Fraud takes money directly from the pockets of Pennsylvania taxpayers and takes away resources that could be used to provide more care to citizens who are in-need," Corbett said. "Additionally, fraudulent health insurance claims increase the cost of health care for businesses and consumers all across the state."

Corbett noted that this is an ongoing investigation by the Attorney General's Medicaid Fraud and Insurance Fraud Sections.

Sadowski is charged with two counts of participating in a corrupt organization, both first-degree felonies punishable by up to 20 years in prison and $25,000 fines. He is also charged with one count each of provider prohibited acts (submitting false claims), insurance fraud, theft by deception and criminal conspiracy, all third-degree felonies which are each punishable by up to seven years in prison and $15,000 fines.

Miladin is charged with one count of theft by deception and one count of criminal conspiracy, both third-degree felonies which are each punishable by up to seven years in prison and $15,000 fines.

Sadowski and Miladin both surrendered to agents from the Attorney General's Office on Monday, April 27, and were preliminarily arraigned before Pittsburgh Magisterial District Judge William K. Wagner.

Sadowski was released on $50,000 unsecured bail and Miladin was released on his own recognizance. Preliminary hearings are scheduled for both defendants on June 3.