Pharmacy Owner Jailed Over $24.4 Million Money Laundering Scheme

The US Department of Justice (DOJ) has sentenced Queens pharmacy owner Taesung “Terry” Kim to 63 months in prison for conspiring to launder proceeds from a $24.4 million pharmacy fraud scheme. The case is a significant health care fraud enforcement action involving medically unnecessary prescriptions, kickbacks, bribes and the laundering of proceeds through trading companies.

According to court documents, Kim co-owned several retail pharmacies in Brooklyn and Queens, New York. Between 2015 and 2022, those pharmacies submitted approximately $24.4 million in claims to Medicare for prescription drugs that were not medically necessary. Prosecutors said prescriptions were obtained through bribes and cash kickbacks paid to medical providers and purported patients.

The scheme allegedly involved payments to medical providers in the form of office rent and staff, designed to induce them to direct prescriptions to Kim’s pharmacies. Customers were also paid with supermarket gift certificates and cash to fill prescriptions at the pharmacies. The proceeds were then laundered through trading companies, giving the appearance of legitimate business activity while facilitating kickbacks, bribes and profit distribution among pharmacy owners.

Kim pleaded guilty in December 2024 to one count of conspiracy to commit money laundering. In addition to the prison sentence, the court ordered him to pay $24.4 million in restitution and forfeit $6 million in fraud proceeds, including bank accounts and real properties. His partner and co-conspirator, Feng “Jeff” Jiang, was sentenced to 15 months in prison on 16 October 2025.

The case underlines the Department of Justice’s continued focus on Medicare and Medicaid fraud, particularly where health care fraud is combined with money laundering and kickback conduct. It also reflects the priorities of the DOJ’s National Fraud Enforcement Division, which was created on 7 April to investigate and prosecute fraud against federal benefit programmes.

For pharmacies, health care providers and financial institutions, the case reinforces the importance of controls around prescription referrals, third-party payments, patient inducements and transactions involving entities with no clear commercial rationale. The use of trading companies to disguise fraud proceeds is a clear reminder that health care fraud often carries wider anti-money laundering risk.

Read the press release here.