The following information relates to the forth installment for 2003. These OCI cases have received convictions or related judicial action. The information is considered unrestricted. Please pass to any of your staffs who may have an interest.

Chicago Field Office
Sentencing/Convictions

This case originated in July 1997, upon receipt of information from Protex Corporation in Crestwood, Illinois. Protex Corporation advised that Nutritional Source, Inc. of Paducah, Kentucky, which is owned and operated by Robert LIGON, was mislabeling rolls, donuts and cookies. Nutritional Source was doing business as First Health Products in Crestwood, Illinois. LIGON purchased high caloric rolls, donuts, and cookies at wholesale prices and then labeled them as low caloric rolls, donuts, and cookies. He then sold the products to the health food industry at an inflated price taking advantage of the current trend for nutritional foods. These rolls and donuts had a caloric value of 400 to 520 calories per roll/donut and a fat content of 33 grams of fat per roll/donut. LIGON labeled them as 110 to 135 calories per roll/donut and a fat content of 3 to 5 grams of fat per roll/donut.

LIGON’s company purchased rolls and donuts from Cloverhill Bakery in Chicago, Illinois. The rolls and donuts would be shipped to a warehouse in Crestwood, Illinois, where they would be labeled as low calorie and low fat, then shipped to consumers throughout the United States. The cookies were purchased from Harvest Valley Bakery in Spring Valley, Illinois. These cookies were shipped to the same warehouse where they were labeled as low calorie and low fat cookies, then shipped to consumers throughout the United States. The billings and sale orders would come from Paducah, KY where LIGON operates the business. LIGON would market his product to the health food industry by sending samples of his products with accompanying literature. There would be an 800 number with the literature for purchasing the products. This number went to Park City, UT, where LIGON’s daughter took the order. Once the customer called the 800 number, the information would be faxed to Paducah, KY where it would be processed and a shipping order would be forwarded to Crestwood, IL. In Crestwood, IL the order would be filled and shipped to the customer with a billing statement. The money would eventually make its way to LIGON in Paducah, KY.

After interviewing several potential witnesses and reviewing records, three search warrants were served simultaneously on August 27, 1997. A fourth search warrant was served two days later. Seized during these searches were numerous incriminating documents and other related evidence against LIGON.

On May 8, 2002, aa Grand Jury for the Northern District of Illinois, Chicago, IL returned a “True Bill” charging LIGON in a six (6) count indictment with violations of Title 18, U.S.C., § 1341- Mail Fraud; and Title 18, U.S.C. § 2- Aiding and Abetting.

On January 29, 2003, LIGON appeared before Judge James Moran, and was convicted of one (1) count of Title 18, U.S.C., § 1341- Mail Fraud; and Title 18, U.S.C. § 2- Aiding and Abetting.

On September 23, 2003, LIGON was sentenced to fifteen (15) months incarceration, and thirty-six (36) months supervised release after incarceration. In addition, LIGON is not allowed to purchase, distribute, or sell any food product regulated by any government agency.

Kansas City Field Office
Sentencing/Convictions

This case was initiated based on information that the website, ONLINEPILLBOX.COM was offering the sale of controlled and prescription drugs via the Internet. ONLINEPILLBOX.COM advertised prescription drugs for sale via the website by simply placing an order with a credit card, or by direct access to your bank account. No doctor's prescription was required. All orders were prepaid. A review of the website revealed that the drugs came from the Republic of the Philippines. Records revealed the website originated from the Philippines and is hosted from Albuquerque, NM. The registrant for the website was THERAPY INFORMATION SERVICES (TIS). Richard WILHITE ran THERAPY INFORMATION SERVICES from an office in Lufkin, TX.

Several undercover orders for morphine were placed through the website and were subsequently received. A search warrant was executed on THERAPY INFORMATION SERVICES, revealing that large quantities of drugs had been sold via the website. Further, WILHITE would e-mail persons in the Philippines to place orders he received via this website. The orders were then mailed directly to the persons who ordered the drugs in the US. WILHITE was the only person who received funds from these sales.

On September 29, 2003, WILHITE was sentenced to thirty-seven (37) months in federal prison and two years federal probation upon release. WILHITE had previously been convicted of violating Title 21, U.S.C. § 331 (a) – Introduction into Interstate Commerce of Misbranded Drugs.

This case was a joint investigation with the United States Customs Service, now the Bureau of Immigration and Customs Enforcement.

Kansas City Field Office
Sentencing/Convictions

Information was developed by the Oklahoma Department of Human Services, Office of Inspector General that MERCADITO CHIHUAHUA, a store/bakery located in Oklahoma City, OK was selling Penicillin. The products were reported to have come into the United States from Mexico. The owners/operators of the MERCADITO CHIHUAHUA were Armida and Adolfo GOMEZ
Three undercover buys of Bristol Myers Squibb penicillin were made from the store/bakery. Each buy consisted of a five capsule blister pack.

On September 24, 2002, the Food and Drug Administration, Office of Criminal Investigations, the Drug Enforcement Administration and the Oklahoma City Police Department executed a federal search warrant at the store/bakery. Pursuant to the execution of the search warrant, one hundred and twenty five (125) Penicillin capsules were recovered along with about 1500 other medications.

On June 13, 2003, Armida GOMEZ was convicted of Title 21, U.S.C. § 331 (a) - Introduction into Interstate Commerce of a Misbrand Drug; and Title 18, U.S.C. § 2 - Aiding and Abetting.

On July 18, 2003, Adolfo GOMEZ was convicted of Title 21, U.S.C. § 331 (a) - Introduction into Interstate Commerce of a Misbrand Drug; and Title 18, U.S.C. § 2 - Aiding and Abetting.

On September 6, 2003, Armida and Adolfo GOMEZ were sentenced to one (1) year probation and a fine of $1,000.00 and $3,000.00 respectively.

Kansas City Field Office
Sentencing/Convictions

This case involves the diversion of pharmaceuticals through CENTRAL PHARMACY, INC., Omaha, NE, CAPITOL PHARMACIES, INC., Cheyenne, WY and CASPER CARE PHARMACY, INC., Casper, WY. Jonathan M. ROSEN owned and operated these closed-door pharmacies with related wholesale companies.

On June 3, 1998, the Wyoming State Board of Pharmacy reported possible diversion activities occurring at CASPER CARE PHARMACY, INC., and CAPITOL PHARMACIES, INC. Three pharmacists working at CASPER CARE had resigned and reported receiving shipments of products from CENTRAL PHARMACY, INC., which were shipped to a secondary wholesaler, JAM PHARMACEUTICALS, located in Orange, California. The pharmacist at CENTRAL PHARMACY also resigned due the diversion activities.

Investigation revealed that ROSEN fraudulently purchased and diverted more than three million dollars worth of pharmaceuticals utilizing these closed-door pharmacies and defrauded drug manufacturers of more than $ 2.1 million dollars.

On April 28, 2003, ROSEN was convicted of violating Title 18, U.S.C. §§ 1341 and 2 - Mail Fraud and Aiding and Abetting.

On October 24, 2003, ROSEN was sentenced to one (1) year and a day federal incarceration, and ordered to pay restitution in the amount of $2,188,536.50.

Kansas City Field Office
Sentencing/Convictions

This case was initiated based on information involving the sale of misbranded prescriptions without the benefit of a proper doctor patient relationship. Sheena Derouen was arrested in her car with several bottles of controlled substances prescribed for a different person. At the time of her arrest Derouen’s children were with her and she was under the influence of the controlled substances. Derouen admitted having a sexual relationship with Maxie SPROTT, MD, and received the drugs as a result of that relationship. During the relationship, SPROTT wrote numerous prescriptions in false names for Derouen. Derouen admitted an addiction to hydrocodone, ingesting over sixty pills a day. Derouen and SPROTT met when he delivered her last child.

On February 23, 2003, SPROTT was convicted of violating Title 21, U.S.C. § 853 – Acquiring a Controlled Substance under False Means.

On October 29, 2003, SPROTT was sentenced to three (3) days in jail and supervised probation for a period of one year. He was also fined $3,000.00. In addition, the Texas Medical Board suspended SPROTT from writing prescriptions for controlled drugs for two years.

The case was worked jointly by the Food and Drug Administration, Office of Criminal Investigations, the Drug Enforcement Administration, Diversion Control, the Federal Bureau of Investigation and the Texas Department of Public Safety.

Metro Washington Field Office
Sentencing/Convictions

This case was referred to the Office of Criminal Investigations by the Food and Drug Administration, Center for Devices and Radiological Health (CDRH). CDRH reported the creation and use of a counterfeit 510(k) clearance letter by James FALLON, the former president of the now-defunct firm known as Derma Genesis. During the period February through November 1998, FALLON and his sales staff used the counterfeit letter to market a mechanical dermabrasion device to physicians and to obtain financing for those physicians who leased the machine.

On May 15, 2003, following a five day jury trial in the Federal District Court in Philadelphia, FALLON, president of Derma Genesis, was convicted of three (3) counts of Title 18, U.S.C. §1341- Mail Fraud; and one (1) count of Title 18, U.S.C. §1343 - Wire Fraud.

On October 14, 2003, FALLON appeared before Chief Judge Giles in Federal District Court in Philadelphia and was sentenced to twelve (12) months and a day federal incarceration, ordered to pay $55,236.00 in restitution to American Business Leasing, and fined $1,000.00. Fallon was also placed on three (3) years supervised release following his imprisonment, and must abide by a special condition of release that forbids him from having any future involvement in this type of business.

Metro Washington Field Office
Sentencing/Convictions

In June 2002, the Food and Drug Administration (FDA), Baltimore District Office referred this case to the Office of Criminal Investigations. The Jeppi Nut Company, located in Baltimore, MD, distributes nuts, bulk candies, popcorn and other food supplies. The company also roasts nuts and packages various food products. During a routine inspection of the company in April 2002, FDA inspectors uncovered evidence of unsanitary conditions and extensive rodent infestation. Sometime prior to that inspection, the company had expanded its operations to include a second building located nearby. The firm’s owner, Theodore PAVLOS, did not post any signs or otherwise indicate that his company was operating from the second building. He also denied having any operations in that building when asked by the FDA inspectors.

Following the FDA inspection, information was received that food products were being manufactured and warehoused in the second building. Based on this information, FDA personnel returned to the company on May 12, 2002, at which time PAVLOS again denied he had any operations at that location. Surveillance conducted that evening revealed Jeppi Nut employees moving items out of the second building and moving them to a nearby garage. A subsequent inspection of the garage determined that those food products were contaminated by rodents and insects.

On October 8, 2003, PAVLOS was convicted of one (1) felony count of violating Title 18, U.S.C. § 1505 - Obstruction of Justice.

On November 20, 2003, PAVLOS was sentenced to eighteen (18) months probation and six (6) months monitored home detention.

Miami Field Office
Sentencing/Convictions

This case was initiated based on an allegation that pharmacy technician Reginald B. SAMPLES was stealing Viagra while employed at the K-Mart Pharmacy in North Fulton County, GA. SAMPLES was also suspected of stealing Viagra while previously employed at the CVS Pharmacy in Marietta, GA.

On August 11, 2003, SAMPLES was convicted of a felony state violation. Samples was sentenced to ten (10) years probation and ordered to pay $12,000 restitution to CVS.

Miami Field Office
Sentencing/Convictions

This case was initiated by the Office of Criminal Investigations, New Orleans Resident Office pursuant to a referral from the FBI in Lafayette, LA. The FBI reported an alleged tampering incident that occurred on November 24, 2002, at a McDonald’s restaurant located in Eunice, LA.

On December 3, 2002, Adam FONTENOT confessed that he placed a razor blade in an apple pie while working at the McDonald’s Restaurant. FONTENOT was subsequently arrested and charged with two (2) counts of violating Title 18, U.S.C. § 1365 - Tampering with Consumer Products.

On March 13, 2003, FONTENOT was convicted of violating Title 18, U.S.C. § 1365 - Tampering with Consumer Products.

On October 29, 2003, FONTENOT was sentenced to sixty-three (63) months incarceration and an additional thirty-six (36) months of supervised release.

New York Field Office
Sentencing/Convictions

This case was initiated based on allegations that Registered Nurse Megan ALVERIO criminally tampered with Emergency Room supplies of Demerol and Dilaudid at Sheehan Hospital in Buffalo, NY.

A surveillance camera installed in the medical supply room at this hospital confirmed that ALVERIO was using the narcotic drugs during her midnight shift and replacing the stolen drugs with saline solution.

Further investigation disclosed that after being fired from the hospital, ALVERIO and her husband, Eulalio ALVERIO, fraudulently used forged prescriptions stolen from the hospital and their Medicaid cards to purchase additional controlled drugs from Buffalo area drug stores.

On June 2, 2003, Megan ALVERIO appeared in Federal District Court in the Western District of New York - Buffalo and was convicted of violating Title 21, U.S.C. § 331(k) and 333(a)(2) -Felony Adulteration of Prescription Drugs. On November 4, 2003, she was sentenced to serve three (3) months incarceration followed by one (1) year supervised release. In addition, she was ordered to pay restitution in the amount of $1,000.00 to Sheehan Memorial Hospital.

On June 6, 2003, Eulalio ALVERIO was convicted of a state misdemeanor charge for possession of a controlled substance. ALVERIO was subsequently sentenced to a conditional discharge.

This was a joint investigation involving the Food and Drug Administration, Office of Criminal Investigations, Buffalo Office, the U.S. Drug Enforcement Administration Diversion Unit – Buffalo, NY, and the New York State Department of Controlled Substances.

New York Field Office
Sentencing/Convictions

On April 30, 2002, the New York City Bureau of Fraud Investigation contacted the Office of Criminal Investigations, New York Field Office and requested assistance in an investigation regarding Melrose Pharmacy, 666 Courtland Avenue, Bronx, NY. The investigation involved forged prescriptions for the drug Neupogen in the names of Winston CAMMOCK and Gregory GUINYARD.

On May 1, 2002, surveillance was conducted in and around Melrose Pharmacy in an effort to observe CAMMOCK, GUINYARD or other individuals pick up the prescriptions. CAMMOCK attempted to pick up the Neupogen prescriptions from the Melrose pharmacy and was subsequently arrested. During his arrest, CAMMOCK said that he was recruited by Unique DIVINE who was standing outside the pharmacy. DIVINE was also arrested. GUIYNARD was later arrested at his residence for his involvement in this scheme.

On May 14, 2003, CAMMOCK was convicted of a misdemeanor state violation - Criminal Possession of a forged instrument and was sentenced to one (1) year incarceration.

On July 23, 2003, GUINYARD was convicted of a misdemeanor state violation -Criminal Possession of a Forged Instrument and was sentenced to a conditional discharge.

On March 11, 2003, DIVINE was convicted by jury trial of a state felony violation-Criminal Possession of a Forged Instrument and was remanded to the custody of the New York City Department of Corrections.

On August 28, 2003, DIVINE was sentenced to two and one-half (2 1⁄/2) to five (5) years incarceration.

New York Field Office
Sentencing/Convictions

On November 15, 2001, information was received by the Western New York Health Care Fraud Task Force (WNYHCFTF) alleging that Dr. Marvin GALLER was diluting flu vaccine which was later administered to his patients.

On November 21, 2001, members of the WNYHCFTF executed a search warrant at GALLER’s office seizing several bottles of suspected adulterated vaccine, suspected liquid used to dilute the vaccine, syringes used to add the liquid to the vaccine, as well as medical records. GALLER was interviewed and provided a verbal statement admitting to his adulteration of the above mentioned flu vaccine.

The FDA Forensic Chemistry Center reported that the vaccine seized at GALLER’s medical practice was diluted to the point that their was very little vaccine left in the bottles, explaining that one bottle which should have had only 10 puncture holes had 39 puncture holes.

On June 4, 2002, GALLER voluntarily surrendered his medical license for a minimum period of three (3) years.

On July 7, 2003, GALLER appeared in the Western District of New York and was convicted of one (1) felony count of Title 21, U.S.C. § 331(k) and 333(a)(2)- Adulteration of a Drug.

On December 10, 2003, GALLER appeared in the Western District of New York and was sentenced to one (1) year probation during which time he is to continue to receive probation supervised mental health treatment. GALLER was also fined $5,000.00.