Man Pleads Guilty To $1.9 Million Baby Formula Fraud

Supply chain interruptions and a bacterial outbreak at the factory of a major producer led to widespread shortages of baby formula in recent years.

While this was a major source of concern for parents, authorities in New York say one man hatched a scheme to fraudulently get his hands on a huge supply of the precious commodity.

According to a Department of Justice statement on Thursday, 43-year-old Vladislav Kotlyar of Staten Island forged an array of documents including medical records and prescription forms in order to receive nearly $2 million in baby formula. The cost was allegedly passed on to health insurance companies.

He has since pleaded guilty to charges of mail fraud and accepted an agreement to pay more than $738,000 in restitution and forfeit another roughly $1 million.

Prosecutors say he was able to access legitimate documentation from parents whose infants were prescribed the specialized formula and used that information to illegally take delivery of the same products.

Kotlyar’s scheme included filing false claims that the prescribed formula was either damaged or incorrect, prompting the company to send a replacement that he then sold to others, officials said.

Although no one else was named in the Justice Department statement, the agency did note that “co-conspirators” helped him pull off a crime that involved submitting “more than $1.9 million in fraudulent claims to health insurers, including during a national shortage of baby formula.”

No date had been set as of Thursday’s announcement, but the Justice Department noted that he could face up to 20 years behind bars.

“A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors,” the statement concluded.

While the situation has improved in recent months, some parents are still finding it difficult to obtain enough baby formula.

Last month, a spokesperson for the Kroger supermarket chain said that retailers are “still seeing impact from the recall and factory shutdown in 2022, adding: “To ensure all customers have an opportunity to purchase formula, Kroger is asking customers to limit their purchases to four formula containers.”

A U.S. Food and Drug Administration source said that it was continuing to take the necessary steps “to make sure parents can get safe and nutritious infant formula whenever and wherever they need it.”