FDA/OCI
cases 1st Quarter, 2004:
Addressees,
The following information relates to the first installment for 2004.
These OCI cases have received convictions or related judicial action.
The information is considered unrestricted.
Chicago Field Office
Sentencing/Convictions
This case was initiated based upon information received from the Sterling
Heights Police Department (SHPD), Sterling Heights, MI, concerning alleged
violations of the Prescription Drug Marketing Act (PDMA) by a local
pharmaceutical sales representative, Larry KOZLOWSKI. A search warrant
had been executed at the home of KOZLOWSKI. A large amount of repackaged
prescription drug samples was seized along with discarded drug sample
packaging. At the time of the warrant, KOZLOWSKI was in California attending
a business meeting at his employer, Alza Pharmaceutical Company. KOZLOWSKI
was a pharmaceutical sales representative for Alza Pharmaceuticals and
was authorized to promote the sale of two Alza drugs known was Ditropan
XL and Mycelex. The Food and Drug Administration (FDA), Office of Criminal
Investigations (OCI) advised the SHPD that the sale of drug samples
is a violation of the PDMA.
On February 16, 2000, KOZLOWSKI advised his employer that the drugs
found in his home were drug samples his wife had collected from an unknown
source. KOZLOWSKI was donating them to World Medical Relief, Inc. (WMR),
Detroit, MI. On the same date, the FDA, Detroit District Office advised
that WMR, Inc. maintains a lawful pharmacy on their premises that is
periodically inspected by the FDA. OCI interviewed Carolyn George, Director,
WMR, Inc. who stated that she would never accept repackaged drugs for
donation. All donated drugs remain in their original packaging from
the manufacturers and are usually donated by area doctors, not pharmaceutical
sales representatives.
On February 23, 2000, OCI and SHPD interviewed Martin NEWMAN, a pharmacist
employed at the Plumbrook Pharmacy, Sterling Heights, MI. NEWMAN claimed
he did not know KOZLOWSKI and that he would never purchase drug samples
from anyone. The next day, NEWMAN confessed that he purchased numerous
stolen re-packaged drug samples from KOZLOWSKI and has done so on a
regular basis since 1997. NEWMAN stated KOZLOWSKI delivered the drugs
to him every six weeks and he purchased them for 40% below the average
wholesale price.
On February 24, 2000, OCI and SHPD interviewed Dr. Lionel Gale who stated
he received repackaged drugs from KOZLOWSKI. Dr. Gale then donated the
drugs to a charity called Youth for Christ for shipment to Burkina Faso,
Africa.
On May 3, 2000, and May 8, 2000, KOZLOWSKI was interviewed with his
attorney present and made a full confession. During the course of his
confession, he implicated his wife, Jodie, and other family members.
On May 25, 2000, Jodie KOZLOWSKI was interviewed with her attorney present.
She admitted her role in her husband's drug sample scheme.
On August 25, 2000, Robert VANDENBERGHE, a pharmacist, was interviewed
and confessed to purchasing re-packed stolen drug samples from KOZLOWSKI
on several occasions. The purchase price for these drug samples was
approximately $12,000.
On November 20, 2000, VANDENBERGHE was convicted of violating one (1)
count of Title 21, U.S.C. ß 331(t) - Sale of Drug Samples. VANDENBERGHE
was later sentenced to two (2) years probation and fined $1,000.
On November 27, 2000, NEWMAN was convicted of violating one (1) count
of Title 21, U.S.C. ß 331(t) - Sale of Drug Samples. NEWMAN was later
sentenced to two years probation and fined $3,000.
On November 7, 2001, Larry KOZLOWSKI was convicted of one (1) count
of violating Title 18, U.S.C. ß 1347- Healthcare Fraud. Jodie KOZLOWSKI
was convicted of one (1) count of violating Title 21, U.S.C. ß 331(t)
- Sale of Drug Samples.
On February 11, 2002, a final order of forfeiture was signed which included
two vehicles and over $700,000 in cash.
On December 15, 2003, Larry KOZLOWSKI was sentenced to serve nine (9)
months in a halfway house, fined $20,000, and received three years probation.
On December 18, 2003, Jodie KOZLOWSKI was sentenced to one
(1) year probation and fined $1,000.
Kansas City Field Office
Sentencing/Convictions
This case involved the administration of silicon injections for cosmetic
purposes by an unlicensed person. The FDA Office of Criminal Investigations
received information that a man posing as a physician was traveling
to Dallas, TX from Miami, FL to inject the lips of Dallas area women
with New Fill and Silicex, an industrial grade silicon.
The suspect, Luis SANCHEZ, was arrested after an undercover sting operation
and indicted on five (5) felony counts for violations of the Texas Occupation
Code for Practicing Medicine without a License and causing psychological
or physical harm.
On January 14, 2004, SANCHEZ was convicted of all five (5) felony counts.
SANCHEZ was subsequently sentenced to five (5) years incarceration at
the Texas Department of Corrections.
This case was a joint investigation with the Texas Rangers
and Dallas Police Department. The case was prosecuted by the Dallas
County District Attorney's Office.
Los Angeles Field Office
Sentencing/Convictions
This case was initiated in October 1998 based on an allegation that
Karl Hans Sturchow, a licensed physician, was dispensing unapproved
drugs. Sturchow dispensed the drugs, "Chondriana/ATP" and the Liefmann
Formula, from his clinic in Lakeside, CA to patients suffering from
AIDS and arthritis.
Ursula LIEFMANN, who resides in San Diego, CA, was identified as the
source of the Liefmann Formula. The FDA Forensic Chemistry Center conducted
an analysis of the Liefmann Formula and determined that two of the four
formulas contained controlled substances. Based on this analysis and
documentation, the FDA Center for Drug Evaluation and Research determined
that the Liefmann Formula posed a Class I Health Hazard in that there
was a reasonable possibility that the use of the Liefmann Formula would
cause serious adverse health consequences or death.
In coordination with the United States Postal Service Inspectors, the
Office of Criminal Investigations determined that LIEFMANN used a false
return address when mailing the Liefmann Formula to customers located
throughout the U.S. A federal search warrant was executed at the premises
occupied by LIEFMANN. LIEFMANN subsequently confessed that she had manufactured
the unapproved drug in her kitchen for over twenty years and had failed
to pay income tax on the revenues from the sale of the Liefmann Formula.
LIEFMANN admitted to using accounts in the Cayman Islands to conceal
the proceeds from the sales, and using various techniques to conceal
her activities from the FDA.
Subsequent to execution of the search warrant, LIEFMANN attempted
to surreptitiously sell the residence in San Diego, CA. The United
States Attorney's Office in San Diego, CA successfully seized the
property one day before the closure of escrow. On October 7, 1999,
LIEFMANN was convicted of violating Title 18, U.S.C. ß 371 - Conspiracy;
and Title 26, U.S.C. ß 7201- Attempt to Evade or Defeat Tax. LIEFMANN,
an illegal alien, was deported. The Medical Board of California revoked
Sturchow's license.
Los Angeles Field Office
Sentencing/Convictions
On February 14, 2001, this investigation was referred to the Office
of Criminal Investigations, Los Angeles Field Office by the FDA, Southwest
Import Division, located in Otay Mesa, CA. The Southwest Import Division
physically sampled three shipments of avocado product imported from
Mexico by G PRODUCTS (Owner/Alain GUIZAR), an importer based in San
Diego, CA. The laboratory analysis indicated that the shipments were
contaminated with Listeria Monocytogenes. As a result of the positive
Listeria readings, all entries or shipments of avocado that G PRODUCTS
imported from the Mexican manufacturer were detained.
However, GUIZAR advised that he exported twenty-two (22) of the detained
entries to Mexico, without formal notification to the United States
Customs Service and the FDA. Furthermore, in his efforts to import the
avocado product and circumvent the FDA, GUIZAR changed the names of
the manufacturers (EPAMSA and COMISA), made false statements to the
FDA concerning the location of the shipments, and attempted to import
a shipment of avocado product at a different port of entry, Calexico,
CA, and under a different importer's name (SANITARY FOOD PRODUCTS).
On July 9, 2003, G PRODUCTS, INC. was convicted of violating Title 18,
U.S.C ß 542- Entry of Goods by False Statement; and Title 18, U.S.C.
ß 2- Aiding and Abetting. Alain GUIZAR was convicted of violating Title
21, U.S.C. ß 331(k), 333(a)(1)- Alteration of a Label while Article
is Held for Sale after Shipment in Interstate Commerce; Title 21, U.S.C.
ß 331(c), 333(a)(1)- Receipt in Interstate Commerce of an Adulterated
Food; and Title 18, U.S.C. ß 2- Aiding and Abetting. Benoit GUIZAR was
convicted of violating Title 21, U.S.C. ß 331(k), 333(a)(1), Alteration
of a Label while Article is Held for Sale after Shipment in Interstate
Commerce; and Title 18, U.S.C. ß 2- Aiding and Abetting. Tandeleya GUIZAR
was convicted of violating Title 21, U.S.C. ß 331(c), 333(a)(1) - Receipt
in Interstate Commerce of an Adulterated Food; and Title 18, U.S.C.
ß 2- Aiding and Abetting.
On July 9, 2003, Tandeleya GUIZAR and Benoit GUIZAR were each immediately
sentenced to two (2) years probation.
On December 8, 2003, G PRODUCTS INC., the corporation, was sentenced
to one (1) year probation and a $5,000 fine.
On March 1, 2004, Alain GUIZAR was sentenced to five (5) years probation
and a $3,600 fine.
Los Angeles Field Office
Sentencing/Convictions
On September 24, 2003, Immigration and Customs Enforcement (ICE), Office
of the Resident Agent in Charge, Blaine, WA, informed the Office of
Criminal Investigations, Seattle Resident Office, that they would be
conducting a marine enforcement activity on the Puget Sound later that
day and evening. ICE had obtained information that indicated smugglers
were involved in using the Puget Sound water ways to smuggle narcotics
and other contraband into the United States from Canada to by-pass the
declaration of these goods.
On September 25, 2003, Mike MORCOM was arrested in U.S. waters near
Canada as he attempted to smuggle numerous large hockey-style bags into
the U.S using a small rubber zodiac water vessel, under the cover of
darkness. The bags contained approximately two hundred and seventy-five
(275) pounds of marijuana and one hundred and seventy (170) pounds of
suspected misbranded and unapproved ephedrine.
On November 21, 2003, MORCOM was convicted of violating Title 21, U.S.C.
ß 841(a)(1) - Distribution of a Controlled Substance.
On February 13, 2004, MORCOM was sentenced to thirty-seven (37) months
incarceration with three additional years of probation.
This was a joint investigation with ICE, United States Border Patrol,
and the United States Coast Guard.
Metro Washington Field Office
Sentencing/Convictions
This case was initiated based upon information received from the FDA
Baltimore District Office that former pharmaceutical company owner John
D. COPANOS, was continuing to manage operations at Consolidated Pharmaceutical
Group (CPG). In 1996 FDA permanently debarred COPANOS from managing
the company as a result of a prior felony conviction for violation of
the Food Drug and Cosmetic Act. The company functioned as a Baltimore
based manufacturer of various human and veterinary antibiotic drug products.
In 1997, James H. COLEMAN, president of Consolidated Pharmaceutical
Group, provided affidavits and other documents, to both the FDA and
the court, which gave assurances that COPANOS was no longer associated
with the firm.
On May 19, 1999, federal search warrants were executed at the CPG manufacturing
facility as well as the residence of COPANOS. The investigation disclosed
that COPANOS continued to substantially participate in and direct drug
manufacturing operations at the firm.
On March 27, 2001, COLEMAN was convicted of violating Title 18, U.S.C.
ß 1001 - False Statements. On January 27, 2004, COLEMAN was sentenced
to two (2) years probation, four (4) months home detention and a $2,000
fine.
In October 2001, COPANOS and his son, John S. COPANOS, were indicted
by a federal grand jury for violations of Title 18, U.S.C. ß 371- Conspiracy;
and Title 18, U.S.C. ß 1001-False Statements.
On September 9, 2003, John D. COPANOS was convicted of violating Title
18, U.S.C. ß 371- Conspiracy. Charges against John S. COPANOS were dropped.
On December 1, 2003, John D. COPANOS was sentenced two (2) years probation,
six (6) months home detention, and a $250,000 fine.
Metro Washington Field Office
Sentencing/Convictions
The case involves the substitution of Children's Tylenol (80 mg.) chewable
tablets with Extra Strength Tylenol tablets in 500 mg. strength. The
boxes and bottles were labeled as the Children's product; however the
adult version strength was contained inside the bottles. Three of these
bottles were placed on the shelf of a Giant Food Store in Pennsylvania.
A consumer noticed the difference just prior to giving her child four
of the tablets. Gehan AWAD was subsequently identified as the individual
who had tampered with the Children's Tylenol. AWAD was interviewed by
the FDA Office of Criminal Investigations agents and subsequently admitted
to substituting the Tylenol for monetary purposes.
AWAD agreed to waive indictment and was convicted of violating Title
18 U.S.C. ß 1001- False Statements.
On January 16, 2004, AWAD was sentenced to one (1) year probation.
Metro Washington Field Office
Sentencing/Convictions
This case originated upon a referral from the Office of Criminal Investigations,
Chicago Field Office. In October 2001, information was developed which
revealed that John "Jack" WARD was again selling Vitamin B complex injectables
and veterinary steroids without a veterinary prescription to harness
racing individuals at a racetrack in the vicinity of Columbus, OH. WARD
had previously been convicted in a two (2) count Information for similar
drug offenses in 1995 which resulted in his receiving probation.
During February 2002, information was developed which revealed that
WARD and Carl CLYNE were present at a Delaware, OH horse auction and
were offering to sell unapproved and misbranded veterinary drugs. During
a subsequent meeting and undercover sting operation, CLYNE sold a total
of seven vials of unapproved and misbranded injectable drugs which had
been smuggled into the U.S. from Canada. In the aftermath of the sting
operation, CLYNE agreed to cooperate in the investigation. CLYNE gave
consent to search his storefront operation located in Plain City, OH
which resulted in the seizure of approximately 40 cases of unapproved
and misbranded veterinary drugs which had been smuggled into the U.S.
from Canada. CLYNE advised that WARD was the co-owner of the store front
operation. WARD subsequently confessed to his complicity in the operation.
On October 28, 2003, both WARD and CLYNE were convicted of violating
Title 21, U.S.C. ß 331(a) -Introduction of Misbranded Drugs into Interstate
Commerce.
On January 9, 2004, WARD was sentenced to three (3) years probation
and three (3) months home confinement. CLYNE was also sentenced one
(1) year probation.
This case was investigated by the Office of Criminal Investigations
with assistance from Standardbred Investigative Services.
Metro Washington Field Office
Sentencing/Convictions
This case was initiated on August 07, 2002, as a referral from United
States Department of Veterans Affairs, Office of Inspector General (VA-OIG).
The VA Medical Center Pharmacy in Cleveland, OH reported the loss of
approximately 6,800 Viagra pills from the VA pharmacy.
In a joint operation with the VA-OIG, video surveillance was conducted
in the VA Pharmacy in an attempt to determine who was stealing the Viagra.
No information regarding the theft of the Viagra was developed. However,
Timothy COLE, a pharmacy technician, was observed stealing Zoloft from
the VA pharmacy. COLE was subsequently arrested by VA Police and admitted
that he had been stealing a number of pharmaceuticals. In addition,
recorded conversations with John Raymond STEWARD, a pharmacy technician,
were obtained in which STEWARD admitted to stealing and selling Viagra
from the VA pharmacy.
On July 22, 2003, COLE was convicted of violating Title 18, U.S.C. ß
641- Theft of Government Property. On October 10, 2003, COLE was sentenced
to one (1) year probation and fined $2,000.
On September 25, 2003, STEWARD was convicted of violating Title 18,
U.S.C. ß 669- Theft from a Health Care Benefit Program. On December
17, 2003, STEWARD was sentenced to two (2) years probation.
This case was investigated by the Office of Criminal Investigations
and the United States Department of Veterans Affairs, Office of Inspector
General.
Metro Washington Field Office
Sentencing/Convictions
This case involves a registered nurse identified as James KUTZER, who
was employed at the Ireland Army Community Hospital Emergency Room,
Fort Knox, KY. KUTZER was identified as having substituted prescriptions
of Percocet tablets, a Schedule II controlled substance, with Methocarbomal
tablets, a generic muscle relaxant, for at least two patients. It was
also determined that KUTZER was the subject of three separate investigations
in 1998 conducted by the United States Army Criminal Investigations
Division (CID) for theft and possession of pharmaceuticals from the
Ireland Army Hospital.
On January 27, 2004, KUTZER was convicted of violating one (1) count
of Title 18, U.S.C. ß 641- Theft. KUTZER was sentenced to three (3)
years probation; six (6) months monitored house arrest; and permanent
loss of his nursing license.
This was a joint investigation between the Office of Criminal Investigations
and the United States Army, Criminal Investigations Division.
Miami Field Office
Sentencing/Convictions
This investigation involved the wholesale distribution of pharmaceuticals
without a license by Carol SIMS and Tyrone HILL, as well as the possession
of stolen United States Government property (pharmaceutical products
stolen from a United States Department of Veterans Affairs hospital
pharmacy).
On September 18, 2003, SIMS was convicted of violating Title 18, U.S.C.
ß 641- Embezzlement and Theft of Public Money, Property or Records;
and Title 21, U.S.C. ß 353(e)(2)(A) - Unlicensed Wholesale and Distribution
of Pharmaceuticals.
On December 18, 2003, SIMS was sentenced to (2) two years probation,
(4) months home detention and restitution of $70,341.
On August 28, 2003, HILL was convicted of violating Title 18, U.S.C.
ß 641- Embezzlement and Theft of Public Money, Property or Records;
and Title 21, U.S.C. ß 353(e)(2)(A) - Unlicensed Wholesale and Distribution
of Pharmaceuticals.
December 18, 2003, HILL was sentenced to five (5) years probation, six
(6) months home detention and restitution of $40,074.
Miami Field Office
Sentencing/Convictions
OCI began this criminal investigation after receiving information that
Mary SAWAYA was conducting clinical drug studies without a medical license.
The subsequent investigation developed conclusive evidence that SAWAYA
had falsified at least two medical licenses and provided them to study
sponsors. The sponsors then provided the false licenses to the FDA as
part of their Investigational New Drug (IND) submissions.
On January 22, 2004, SAWAYA was convicted of violating Title 18, U.S.C.
ß 1001- False Statements. SAWAYA was sentenced to twenty-four (24) months
probation. SAWAYA also forfeited an office building (assessed at $141,402)
and was disqualified from participating in any clinical drug study.
The Florida Department of Health, Criminal Investigations Unit also
participated in this investigation.
Miami Field Office
Sentencing/Convictions
This investigation involved a Miami, FL based urologist, Dr. Carlos
NAZIR; a Cheshire, CT based compounding pharmacist, David GAUDIO; and
several Internet and mail order companies that were unlawfully selling
male impotence products known as Power Gel (combination of Phentolamine,
Prostaglandin E1, and Papaverine, administered intraurethrally) and
Vigor (oral Phentolamine).
The investigation which included undercover purchases and search warrants
determined that the defendants unlawfully sold Power Gel and Vigor to
thousands of customers throughout the U.S. and Puerto Rico. Records
further disclosed that they advertised the products as having no side
effects and containing all natural ingredients.
Following are the judicial actions against the principals in this investigation
as well as the Internet and mail order companies who were involved in
the illegal activity.
On November 15, 2001, Alejandro HOLCH, and his business, SPORTS TELEMARKETING,
were convicted of violating Title 21, U.S.C. ß331(a)(1) and 333(a)(1)-
Dispensing a Prescription Drug without a Prescription. On February 8,
2002, HOLCH was sentenced to twelve (12) months probation and ordered
to pay a $5,000 fine. HOLCH's corporation, SPORTS TELEMARKETING was
also sentenced to twelve (12) months probation and ordered to pay a
$5,000 fine.
On December 12, 2001, Reynaldo FARINAS, Vice President of Propharma,
Inc., was convicted of violating Title 21, U.S.C. ß 331(a), and 331(a)(1)-
Introduction into Interstate Commerce a Misbranded Drug; and Title 18,
U.S.C. ß 2- Aiding and Abetting. On February 25, 2002, FARINAS was sentenced
to six (6) months probation and agreed to $25,000 in asset forfeiture.
On September 18, 2002, GAUDIO was convicted of violating Title 21, U.S.C.
ß 331(k) and 333(a)(2) -Dispensing a Prescription Drug without a Valid
Prescription. On September 15, 2003, GAUDIO was sentenced to ten (10)
months incarceration, a $10,000 fine, and forfeited $150,000 to the
Department of Justice, Asset Forfeiture Fund.
On November 15, 2002, NAZIR was convicted of violating Title 18, U.S.C.
ß 1341 and Title 18, U.S.C. ß 371 - Conspiracy to Commit Wire Fraud;
Title 18, U.S.C. ß 1341 - Mail Fraud; Title 21, U.S.C. ß 331(a) and
333(a)(2) - Introduction into Interstate Commerce of Misbranded Drug
(Power Gel and Vigor); and Title 18, U.S.C. ß 1956(h) -Conspiracy to
Commit Money Laundering. On the same date, NAZIR was also convicted
of charges associated with another investigation. In that case NAZIR
was convicted of violating Title 18, U.S.C. ß 1347- Health Care Fraud
(Medicaid Fraud), wherein he defrauded the government of over one million
dollars for prescription drugs (Neupogen) he purported to have provided
to patients, but actually diverted. On November 14, 2003, NAZIR was
sentenced to twenty-four (24) months incarceration and three (3) years
probation. NAZIR was ordered to pay $1,022,232.60 in restitution to
the State of Florida regarding the Medicaid fraud case.
On December 13, 2002, Francisco MUNOZ and Alberto LLONA were convicted
by a jury of Title 18, U.S.C. 371 - Conspiracy; Title 18, U.S.C. 1341
- Mail Fraud; Title 21, U.S.C. 331(a) and 333(a) - Introduction into
Interstate Commerce of a Misbranded Drug; and Title 21, U.S.C. 331(k)
and 333(a)(2) - Misbranding of Prescription Drugs after Shipment in
Interstate Commerce. On November 14, 2003, MUNOZ and LLONA were each
sentenced to fifty-one (51) months incarceration followed by three (3)
years probation. MUNOZ was also ordered to pay a fine of $12,500.
Miami Field Office
Sentencing/Convictions
This case was initiated in October 2000, based on information received
from the Federal Bureau of Investigation regarding the purchase of a
large quantity of prescription drugs from a Miami pharmacy. The pharmacy,
NOVA PHARMACY, was operated and owned by Alex FERNANDEZ.
Orders were placed through Walter LOPEZ who in turn ordered the drugs
from FERNANDEZ. Orders were placed for 5,000 Viagra tablets, 3,000 Vicodin
tablets and 2,000 Xanax tablets. The price was negotiated at $58,300.
During the negotiations, FERNANDEZ did not mention or request any type
of permit, license or paperwork concerning the transaction. An undercover
purchase was conducted for some of the drugs after which FERNANDEZ was
arrested.
On April 3, 2003, LOPEZ and FERNANDEZ, were indicted for violations
of Title 18, U.S. C. ß 371- Conspiracy; Title 21, U.S.C. ß 841(a)(1)
and 846 - Possession with Intent to Distribute and Conspiracy to Distribute
a Controlled Substances; and Title 21, U.S.C ß 331(t), 353(e)(2)(A)
and 333(b)(1)(D) - Wholesale Distribution of a Prescription Drug without
a Wholesale License.
On June 26, 2003, LOPEZ was convicted of the charges in the indictment.
On July 8, 2003, FERNANDEZ was convicted by a jury on all counts in
the indictment.
On September 11, 2003, LOPEZ was sentenced to six (6) months incarceration
and 3 years probation. LOPEZ, who had been in custody since his arrest,
remained incarcerated.
On September 18, 2003, FERNANDEZ was sentenced to eighteen (18) months
incarceration and three (3) years probation.
Miami Field Office
Sentencing/Convictions
This investigation involves a medical doctor, Victor SOUAID, who under
dosed or failed to administer Lupron injections to prostate cancer patients.
It was also determined that SOUAID fraudulently billed Medicare and
other insurance providers for Lupron injections not administered and
unlawfully sold large quantities of Lupron to Florida wholesalers.
On September 22, 2003, SOUAID was convicted of thirty-two (32) felony
counts of Title 18, U.S.C.ß 1347 Health Care Fraud; and twenty-seven
(27) counts of Title 21, U.S.C. ß 353 (b)(1)(A) and 353 (e)(2)(A)-Unlicensed
Wholesale of Prescription Drugs. SOUAID permanently surrendered all
medical licenses.
On December 19, 2003, SOUAID was sentenced to fifty-one (51) months
incarceration, ordered to pay $123,000 in restitution and $5,900 in
special assessments. He was also sentenced to three (3) years supervised
release to be served subsequent to his incarceration.
The Federal Bureau of Investigation also participated in this investigation.
New York Field Office
Sentencing/Convictions
This case involved the sale of counterfeit labeled prescription drugs.
VRI Distribution (VRI), was a licensed drug wholesaler involved in the
distribution of repackaged counterfeit labeled prescription drugs. VRI
was identified as a result of a related investigation involving another
unlicensed wholesale drug company, Prodepharm. Prodepharm was operating
out of Puerto Rico in 1995-1996 under the direction of Eimad Asmar with
the assistance of Eddy Herrera. Both Asmar and Herrera were convicted
of federal charges in that case. Herrera is currently serving time while
Asmar died in Mexico while in fugitive status.
Parallel to the investigation of Prodepharm and VRI, investigations
in Kansas City, KS, Austin, TX and eventually Atlanta, GA resulted in
the identification of several locations where counterfeit labeled Epivir
and Zerit were appearing. These investigations had revealed that the
suspect product was purchased from Stanford Trading, a Texas wholesaler,
or directly from VRI in New York. The Austin investigation revealed
that Stanford Trading had purchased the questioned product from VRI.
Forensic examinations conducted by the U.S. Secret Service, the FDA
Forensic Chemistry Center, and the respective pharmaceutical manufactures
determined that the questioned product bore counterfeit labeling. These
findings lead to the seizure of large quantities of Epivir and Zerit
together with additional products which were suspected to also contain
counterfeit labeling.
As Prodepharm was failing and under investigation, it was established
that Asmar, using the assumed name Frank Smith, recruited an associate,
Victor MARIN of New York and Nicholas GUARINO, a licensed Pharmacist,
to serve as the President and Supervising Pharmacist for VRI. In 1996,
New York State issued a drug wholesale license to VRI.
GUARINO was subsequently located, interviewed and eventually agreed
to cooperate in the investigation. It was learned that Asmar agreed
to pay GUARINO thousands of dollars monthly for allowing VRI to use
his name as the supervising pharmacist. GUARINO received cash payments
delivered to him by MARIN and others in amounts far short from what
he was promised. GUARINO revealed that he rarely was present at VRI
and would only be contacted by Asmar when his signature was needed on
VRI documents. GUARINIO said that he broke off his relationship with
VRI approximately eight (8) months after signing on since Asmar wasn't
paying him for his services as agreed upon at their initial meeting.
VRI armed with a wholesale license and preferred pricing utilized the
services of a Texas businessman, Robert Kay, to establish its business
relationships with Stanford Trading, the Texas based wholesaler. VRI
also initiated business directly with wholesalers in Alabama and Florida.
Over a period of approximately one (1) to two (2) years VRI conducted
sales with these wholesalers totaling in excess of $15,000,000. The
buyers would forward payment by wire or check to a bank account owned
by VRI or to a check cashing establishment, "Citi Check Cashing" located
in Jersey City, NJ. In most instances, within one or two days of the
sale, either Victor MARIN or David ABUROMI, representing VRI would appear
at Citi Check Cashing. At this time they would either convert bank checks
from VRI's various bank accounts to cash or withdraw funds which were
wired directly to Citi Check Cashing by the victim wholesalers. The
cash withdrawn by MARIN or ABUROMI would often be in amounts exceeding
$500,000.
The source of VRI's product was either as a result of product diversion
or off shore purchases. The product was then repackaged, labeled and
then placed into interstate commerce by VRI.
ABUROMI and MARIN were both convicted of violating Title 18, U.S.C.
ß 1343 -Wire Fraud; Title 18, U.S.C. ß 1956-Money Laundering; and Title
18, U.S.C. ß 371 -Conspiracy. GUARINO was convicted of violating Title
18, U.S.C. ß 1347 -Health Care Fraud; Title 18, U.S.C. ß 1343 -Wire
Fraud; and Title 18, U.S.C. ß 842 -Transportation of Explosives.
On May 2, 2003, MARIN was sentenced to five (5) years incarceration
and ordered to make restitution in the amount of $13,000,000.
On February 7, 2003, ABUROMI was sentenced to five (5) years incarceration
and ordered to make restitution in the amount of $13,000,000.
On September 3, 2003, GUARINO was sentenced to twenty-six (26) months
incarceration and ordered to make restitution in the amount of $300,000.
New York Field Office
Sentencing/Convictions
On October 3, 2001, information was received from the United States
Attorney's Office, Eastern District of Philadelphia, and the Federal
Bureau of Investigation that Scott KNOX and Theodore SOSANGELIS, the
owners of East Coast Ingredients, 211 South Street, Philadelphia, PA,
were misbranding, distributing, and trafficking in counterfeit dietary
supplement products.
KNOX and SOSANGELIS conspired with two individuals from Canada, Derek
OKUKURO and Kent MOSUR, to distribute counterfeit dietary supplement
products through their company, East Coast Ingredients. They manufactured
a different version of the dietary supplement products manufactured
by Muscletech. They then placed counterfeit Muscletech labels on these
counterfeit products, and distributed and sold these counterfeit dietary
supplement products to customers who believed that they were purchasing
legitimate Muscletech products.
KNOX and SOSANGELIS were both convicted after bench trials. KNOX was
sentenced to serve eighteen (18) months incarceration and SOSANGELIS
was sentenced to three (3) years probation.
On January 23, 2004, OBUKURO and MOSUR were convicted of violating Title
18, U.S.C. ß 2 and 18 U.S.C. ß 2320 - Aiding and Abetting and Trafficking
in Counterfeit Goods. Each were sentenced to two (2) years probation,
and ordered to pay restitution in the amount of $210,000.
New York Field Office
Sentencing/Convictions
The Office of Criminal Investigations was contacted by the Drug Enforcement
Administration (DEA), Tactical Diversion Squad and requested to provide
assistance in the investigation of Norman L. SMITH. According to DEA,
SMITH was engaged in a large scale diversion scheme in which he purchased
various pharmaceutical drugs from several individuals and sold the pharmaceuticals
to at least twenty-six (26) established customers. Additionally, SMITH
procured at least one fraudulent insurance card that was used for the
payment of medical visits and the purchase of prescription drugs. A
DEA confidential informant (CI) advised that SMITH sold approximately
$2,000 worth of pills a day. SMITH also co-mingled his drug proceeds
with proceeds he derived from the operation of a locksmith franchise
he owned named "Lockdoc."
Between April 2001 and December 2001, ten (10) undercover purchases
were conducted resulting in a total of 1,118 oxycodone tablets and 238
hydrocodone tablets being purchased from SMITH.
On December 11, 2001, SMITH and three other individuals (David TERCIERA,
Steven NETO and Loretta COSTA) were arrested and charged with violating
Title 21 U.S.C. ß 841(a )(1)- Distribution of a Controlled Substance.
On January 10, 2002, SMITH, COSTA, TERCIERA and NETO were indicted and
charged with violating Title 18, U.S.C. ß 371- Conspiracy; Title 21,
U.S.C. ß 331(t)- Unlicensed Wholesale Distribution of a Prescription
Drug; Title 21, U.S.C. ß 846, Conspiracy to Distribute a Controlled
Substance; and Title 21, U.S.C. ß 841(a)(1), Distribution of a Controlled
Substance.
On April 3, 2003, TERCIERA and NETO were convicted of violating Title
21, U.S.C. ß 331(t) - Unlicensed Wholesale Distribution of a Prescription
Drug; and Title 21, U.S.C. ß 846-Conspiracy to Distribute a Controlled
Substance. TERCIERA was sentenced to time served and three (3) years
of supervised release. NETO was sentenced to eighteen (18) months incarceration
followed by three (3) years of supervised release.
On July 30, 2003, SMITH was convicted of all charges in the indictment.
SMITH was sentenced to ten (10) years incarceration to be followed by
six (6) years of supervised release.
On September 16, 2003, COSTA was convicted of violating Title 21, U.S.C.
ß 846-Conspiracy to Distribute a Controlled Substance; and Title 21
U.S.C. ß 841(a)(1) - Distribution of a Controlled Substance. COSTA was
sentenced to thirty-three (33) months incarceration to be followed by
three (3) years of supervised release.
New York Field Office
Sentencing/Convictions
This investigation was initiated in April 2002, when information was
received regarding the shipment of 3,036 anabolic steroids from Bangkok,
Thailand to Middlesex, NJ. The steroids were intercepted and detained
by the United States Customs Service, Los Angeles Field Office.
The recipient of the steroids was Anthony MALLOY. MALLOY was previously
on record for the smuggling of prescription drugs from Mexico into the
United States.
The United States Postal Inspection Service conducted checks on the
address located in Middlesex, NJ and determined the address to be a
Mailboxes Etc.
During subsequent criminal history checks for MALLOY it was revealed
that he had been arrested several times for assault, harassment and
narcotics. MALLOY was also arrested in 1998 by the South Plainfield
Police Department for the possession and distribution of anabolic steroids.
On April 30, 2002, MALLOY was arrested outside the Mailbox Etc. facility
in Middlesex, NJ after picking up the package of anabolic steroids.
Assisting in the arrest was the Middlesex County Prosecutors Office,
the Office of Criminal Investigations, the United States Customs Service,
the Middlesex Boro Police Department and the United States Postal Inspection
Service.
On October 25, 2002, MALLOY was convicted of state felony charges.
On March 3, 2004, MALLOY was sentenced to five (5) years incarceration
in a state penal facility and two (2) years probation.
New York Field Office
Sentencing/Convictions
This case originated upon information from the Nassau County Police
Department that Lewis TACKTILL used an "FDA Investigator" badge to affect
a vehicle stop in Nassau County, NY. The occupants of the car were two
off duty New York City Police Department officers. Assistance was requested
to confirm or refute TACKTILL'S employment with the FDA and to authenticate
and identify the badge confiscated at the scene.
On January 09, 2004, TACKTILL was interviewed regarding his possession
of the FDA badge. TACKTILL admitted that he was not an FDA employee,
but received the badge from his aunt, a former FDA employee. TACKTILL
was arrested and charged with a violation of the New York State Penal
Law, Section 190.25 (3) - Criminal Impersonation in the Second Degree,
a Class A Misdemeanor.
On January 09, 2004, Tacktill's aunt was interviewed and advised that
she retired from the FDA approximately 2 years ago. The aunt verified
that she gave her nephew, TACKTILL, the FDA badge approximately 30 years
ago as a souvenir. She also advised that when she was assigned to the
Brooklyn, NY office, years ago badges that were no longer in active
use were distributed to select employees as souvenirs.
On February 13, 2004, TACKTILL was convicted of disorderly conduct.
New York Field Office
Sentencing/Convictions
This case was initiated based on a request for assistance from the Federal
Bureau of Investigation regarding an investigation of Ruperto R. SAMIENTO,
owner/operator of Fragancias Millenium (a perfume store) located in
West New York, NJ. SAMIENTO was selling stolen Viagra out of his store.
During August 2002, DeCaro Trucking located in Newark, NJ was hired
to transport fifty-four (54) pallets of Viagra, 100 mg from Hartford,
CT loading dock to Pfizer Inc. (Pfizer) in Parsippany, NJ.
On August 14, 2002, a pallet of the above referenced Viagra was stolen
before it reached its destination. This pallet contained 4,224 bottles
of 100 pills each, and had an approximate wholesale value of more $3.2
million dollars (approximately $760 per bottle).
On September 16, 2002, a consent search of Fragancias Millenium resulted
in the seizure of numerous products to include the following: twenty
(20) bottles of Viagra 100 mg; eight (8) full blister cards of Viagra,
a physician sample (50 mg); and two (2) empty blister cards of Viagra,
a physician sample (50 mg).
On September 16, 2002, SAMIENTO was interviewed and admitted that he
obtained numerous items which were from stolen shipments. The stolen
items were brought to him by truck drivers on a regular basis. SAMIENTO
knew the above referenced Viagra was stolen. SAMINETO had purchased
the Viagra from an unidentified Hispanic male. SAMIENTO refused to identify
this individual. SAMIENTO purchased twenty-four (24) bottles of Viagra
from this individual for $4.00 per tablet or $400 per bottle. SAMIENTO
was reselling the Viagra for $5.50 per tablet or $550 per bottle.
The approximate wholesale price of twenty-four (24) bottles (2,400 tablets)
of Viagra 100 mg is $18,240.
On October 1, 2003, SAMIENTO was convicted of violating Title 18, U.S.C.
ßß 659 and 2, Receipt of Stolen Property and Aiding and Abetting.
On February 26, 2004, SAMIENTO was sentenced to twenty-four (24) months
probation. SAMINETO was also ordered to pay $18,240 in restitution to
Pfizer, Inc.
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