Enforcement Forum

BALTIMORE, MD—Elmar Rakhamimov, a/k/a “Eric Rakhamimov,” age 42, of Owings Mills, Maryland, and his brother, Salim Yusufov, age 43, of Reisterstown, Maryland, pleaded guilty today to a conspiracy to traffic over $6.6 million in contraband cigarettes. Rakhamimov also pleaded guilty to trafficking in contraband cigarettes and distribution of oxycodone. Yusufov also pleaded guilty to health care fraud and to receipt and delivery of misbranded drugs.

The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation; Chief James W. Johnson of the Baltimore County Police Department; Special Agent in Charge Antoinette V. Henry of the U.S. Food & Drug Administration, Office of Criminal Investigations; and Special Agent in Charge Nicholas DiGiulio, Office of Investigations, Office of Inspector General of the Department of Health and Human Services.

According to their guilty pleas, Elmar Rakhamimov, and his brother, Salim Yusufov, conspired with other family members and associates to receive, possess, sell and distribute contraband cigarettes, that is, cigarettes on which the applicable state taxes have not been paid. Rakhamimov, who was the leader and organizer of the scheme, purchased contraband cigarettes on 18 occasions between December of 2011 and November of 2013 from an undercover FBI agent operating in the Baltimore County, Maryland area. Salim Yusufov, who owned Health Way Pharmacy, received more than $81,000 in kickbacks for brokering the contraband cigarette transactions with the undercover FBI agent. These transactions included thousands of cartons of contraband cigarettes. The cigarettes were sold and distributed in quantities of 10,000 cigarettes or more, and bore no evidence of the payment of applicable state sales taxes. At the time of the indictment the cigarette tax in Maryland was $2.00 per package of cigarettes ($20 per carton of cigarettes) and the cigarette tax in New York was $4.35 per package of cigarettes ($43.50 per carton of cigarettes). The total tax evaded was more than $1 million.

As part of the criminal scheme, Rakhamimov also distributed pills containing oxycodone, with a total weight of 96.45 grams. The oxycodone and other drugs were distributed to the undercover FBI agent as partial payment for contraband cigarettes and in exchange for cash. During the drug transactions, Rakhamimov received $356,123 in cash in exchange for the various drugs.

According to his plea agreement, Rakhamimov and a co-conspirator laundered the proceeds of the contraband cigarette sales through an international money laundering operation that wired funds from banks located in Latvia, Cyprus, and Estonia, to a bank in New York, disguising the money as legitimate business payments for medical equipment or supplies. From December 27, 2012 through September 5, 2013, Rakhamimov and his co-conspirator wired a total of $681,450 through 12 such transactions. Rakhamimov and his co-conspirator received a fee of approximately 8% for the money laundering transactions.

Rakhamimov used his residence and his restaurant, Europe, to conduct the illegal transactions of contraband cigarettes and drugs, and the money laundering.

According to his plea agreement, Adam Azerman transported contraband cigarettes from Maryland to Brooklyn, using a van registered in his name. Azerman picked up the cigarettes from Rakhamimov’s residence and other locations, then drove his van to Brooklyn, New York, where he met Shamil Novakhov and provided him with the keys to the van. Novakhov admitted that he would take the van and return a few hours later, after he unloaded the contraband cigarettes into a nearby warehouse. Novakhov’s nephew, Ruslan Ykiew, admitted that he would also travel from New York to Maryland to obtain contraband cigarettes and transport them to his uncle in New York. Ykiew initially stored the cigarettes in a restaurant he owned. At Novakhov’s request, in 2012 Ykiew rented a warehouse for the storage of the contraband cigarettes.

Salim Yusufov also admitted that he illegally provided unapproved prescription drugs from Germany and Eastern Europe and sold them to customers. Corvalol, also referred to Corvalolum, and Valocordin, is not approved by the FDA for distribution in the United States, although it is sold in Eastern European countries, where it is used to treat elevated blood pressure and as a tranquilizer and sedative. Valocordin and Corvalol contain large amounts of phenobarbital, a prescription drug regulated by the FDA. According to his plea agreement, from July 23, 2010 through July 14, 2011, Yusufov , who is not a licensed pharmacist, imported and distributed Valocordin, dispensing the drug without a prescription.

In addition, Yusufov admitted to defrauding Medicare and Medicaid by causing Health Way Pharmacy to bill for prescriptions and/or prescription refills that the pharmacy did not provide to customers. One of the ways Yusafov did this was by intentionally failing to reverse claims for payment submitted to Medicare when customers did not pick up or otherwise receive refills. A second way that Yusufov defrauded Medicare and Medicaid was by providing drugs other than those prescribed, while still invoicing Medicare or Medicaid for the prescribed medication.

Rakhamimov and Yusufov face a maximum sentence of five years in prison for conspiracy to traffic in contraband cigarettes. Elmar Rakhamimov also faces a maximum of 20 years in prison for distribution of oxycodone, and five years in prison for trafficking in contraband cigarettes. Salim Yusufov also faces a maximum of 10 years in prison for health care fraud, and one year in prison for receipt and delivery of misbranded drugs. U.S. District Judge William D. Quarles, Jr. has scheduled sentencing for Rakhamimov and Yusufov for April 28 and April 30, 2015, respectively, each at 1:00 p.m.

Adam Azerman, age 59, of Pikesville, Maryland, and Shamil Novakhov, age 58, and Ruslan Ykiew, age 39, both of Brooklyn, New York, previously pleaded guilty today to conspiracy to traffic in contraband cigarettes and are awaiting sentencing.

United States Attorney Rod J. Rosenstein praised the FBI, Baltimore County Police Department, U.S. Food & Drug Administration, Office of Criminal Investigations and Office of Inspector General of the Department of Health and Human Services—Office of Investigations for their work in the investigation and the Medicaid Fraud Control Unit of the Maryland Attorney General’s Office for its assistance in the investigation. Mr. Rosenstein thanked Assistant United States Attorneys Paul E. Budlow and John W. Sippel, Jr., who are prosecuting the case.