| Addressees,
The following information relates to the second installment for 2005.
These OCI cases have received convictions or related judicial action.
The information is considered unrestricted.
Chicago Field Office
Sentencing/Convictions
This case was initiated in June 2003 based on information received
from the Department of Health and Human Services, Office of the Inspector
General (DHHS-OIG). According to DHHS-OIG, Robert F. KWASNIEWSKI,
was a part time pharmacist employed at the Lake Area Hospital in Webster,
SD. He purchased prescription drugs for his pharmacy, Cornwell Drugs,
using the Lake Area Hospital’s 503(c) exemption.
On July, 08, 2003, an investigation conducted by the Sioux Valley
Regional Health Services (SVRHS) in Sioux Falls, SD determined numerous
prescription drugs (Prevacid, Ipratroprium) were ordered by KWASNIEWSKI
for use at the Lake Area Hospital and paid for with Lake Area Hospital's
503(c) funding. These drugs were then diverted to Cornwell Drugs by
KWASNIEWSKI. All of these prescription drugs/medications that were
purchased used the hospital's 503(c) exemption. This exemption was
to be used only by hospitals or health care entities for drug purchases.
It allowed KWASNIEWSKI to purchase drugs at a fraction of the Average
Wholesale Price (AWP). KWASNIEWSKI pocketed the difference making
a huge profit for himself and Cornwell Drugs.
This information was corroborated by KWASNIEWSKI during a June 2003
interview with SVRHS. In that interview, KWASNIEWSKI admitted ordering
drugs from SVRHS suppliers and setting them aside when they were delivered
to the Lake Area Hospital pharmacy. KWASNIEWSKI ordered the drugs
from the hospital because the cost was much lower than non-503(c)
suppliers. KWASNIEWSKI paid cash for the drugs he ordered. Inventory
records from the Cornwell Drugs suppliers indicate that KWASNIEWSKI
did not purchase any high priced drugs from his suppliers. At no time
did KWASNIEWSKI pass on savings to his drug customers.
On July 23, 2003, DHHS-OIG administrative subpoenas requesting information
were served upon AmeriSource, 6810 Shady Oak Road, MN and D &
K Healthcare Resources, 217 Railroad Ave. SE, Aberdeen, SD. The information
requested documents, print media, electronic files, and correspondence
relating to the sales of pharmaceuticals from companies to Cornwell
Drug and/or KWASNIEWSKI. This request also included contracts, billing
information, invoices, and other documents from 1998 to the present.
On March 25, 2005, KWASNIEWSKI was convicted of violating Title 21,
U.S.C. §§ 331(t) & 353(c)(3)(A) & 333(a)(1) - No
person may sell, purchase, or trade, or offer to sell, purchase, or
trade any drug which was purchased by a public or private hospital
or other health care entity. KWASNIEWSKI was ordered to pay a total
of $83,323 in restitution, $57,074 to TAP Pharmaceuticals, and $25,724
to the DHHS-OIG.
Chicago Field Office
Sentencing/Convictions
In March 2005, the United States Attorney’s Office (USAO), Chicago,
IL provided information to the Office of Criminal Investigations regarding
an investigation by the United States Department of Agriculture (USDA),
Food Safety and Inspection Service (FSIS). The investigation involved
Certified Grocers Midwest (CGM), a grocery cooperative in Hodgkins,
IL. Several inspections were conducted at CGM by the USDA-FSIS and
FDA. During these inspections, a large infestation of mice was discovered.
In addition to the mice, birds and cats were also discovered roaming
the warehouse. This investigation was given priority since the statute
of limitations would expire on March 29, 2005.
On March 7, 2005, USDA-FSIS provided copies of numerous documents
the agency obtained and created during the investigation of CGM. In
addition, several FDA District employees were interviewed regarding
the details of the FDA inspection, as well as a request for original
documents relative to the inspection. A video was also provided which
shows several live and dead mice, numerous baby mice, and adulterated
food.
On March 10, 2005, the former President of CGM, James Bradley, was
interviewed and advised that he was not aware of the rodent infestation.
On March 23, 2005, a tolling agreement was reached which would extend
the expiration date for the statute of limitations.
On March 29, 2005, CGM and Theodore CLINNIN, the former Vice President
of Operations of CGM, were charged with one (1) count of violating
Title 21, U.S.C. § 458 (a) (3) and §461 (a); Title 21, U.S.C.
§610(d) and §676(a); and Title 18 U.S.C. §2- Storing
Poultry and Meat Products under Unsanitary Conditions. In addition,
CGM and CLINNIN were also charged with one count of Title 21, U.S.C.
§331(b), §333 (a) (1); §342(a) (4), and Title 18, U.S.C.
§2-Adulteration.
On April 5, 2005, both CGM and CLINNIN were convicted.
On June 14, 2005, CGM was sentenced to pay a $1,000,000 fine and five
(5) years probation for the extensive rodent infestation and threat
to public safety. CLINNIN was fined $1,000 and sentenced to six (6)
months unsupervised probation.
Chicago Field Office
Sentencing/Convictions
In March 2004, the United States Attorney’s Office, Eastern
District of Wisconsin, advised the Office of Criminal Investigations
regarding an investigation which was being conducted by the Federal
Bureau of Investigation. In that investigation, Dr. Gerald O. DORROS
was to be indicted for the use of an unapproved medical device in
several surgeries he performed. From approximately 1993 through 2000,
Dr. DORROS performed eight medical procedures and conducted research
on patients using unapproved medical devices without notifying or
obtaining the approval of the FDA. Dr. DORROS imported these unapproved
medical devices from Argentina and France by falsely representing
to the FDA and the United States Customs Service (now Department of
Homeland Security) that the devices were to be used pursuant to a
clinical study approved by the FDA.
On March 22, 2005, Dr. DORROS was convicted of violating Title 21,
U.S.C. § 331(a) & 333 (a) (1) - Introduction into Interstate
Commerce of a Misbranded Device.
On June 6, 2005, Dr. DORROS was sentenced to two (2) years probation,
and a $5,000 fine. Dr. DORROS was fined $1,065,000 for making false
claims and ordered to pay $30,000 in civil penalties.
Chicago Field Office
Sentencing/Convictions
In February 2004, the Indiana Department of Natural Resources,
Law Enforcement Division, contacted the Office of Criminal Investigations
and requested investigative assistance. Earlier, the Indiana Department
of Natural Resources and the United States Fish & Wildlife Service
had executed three search warrants at locations owned by Russell G.
BELLAR, including Bellar's Place, Inc., a hunting preserve operated
by BELLAR and Hinds Thomas JONES in Peru, Indiana. These warrants
sought evidence of state (Indiana Code 44-22 et al) and federal (Lacey
Act) game law violations. It was determined white-tail deer harvested
at Bellar's Place, Inc., are tranquilized and then killed by hunters
a short time later. This caused concern about adulterated deer meat
entering the human food chain.
Subsequent investigation determined the suspects had tranquilized
the white-tail deer by injecting them with a mixture of the prescription
new animal drugs Telazol (Tiletamine Hydrochloride and Zolezapam Hydrochloride)
and Sedazine (Xylazine Hydrochloride). They did so to facilitate loading
the deer into trailers for transport to the hunting area. Then the
suspects injected the deer with the prescription new animal drug Tolazine
(Tolazoline Hydrochloride) to reverse the tranquilizing effects of
the Telazol and Sedazine. This would restore the deer's ambulatory
functions to provide a more realistic hunt. Samples of meat taken
from white-tail deer harvested at Bellar's Place, Inc., were forwarded
to the FDA, Forensic Chemistry Center for examination. These examinations
found the presence of Tiletamine Hydrochloride, Zolezapam, Hydrochloride,
Xylazine Hydrochloride, and Tolazoline Hydrochloride. None of these
animal drugs are approved by the FDA for use in food producing animals.
All are required to be dispensed by, or on the lawful written or oral
order of, a licensed veterinarian in the course of his or her professional
practice where a legitimate Veterinary Client Patient Relationship
(VCPR) exists.
On July 14, 2004, a federal grand jury indicted defendants BELLAR
and JONES, charging each with thirty-eight (38) violations of federal
laws including conspiracy to violate the Federal Food, Drug and Cosmetic
Act.
On December 31, 2004, JONES was convicted of violating one (1) count
of Title 18, U.S.C. § 371 - Conspiracy to Violate the Lacey Act.
On January 11, 2005, after eight (8) days of trial, BELLAR was convicted
of violating Title 18, U.S.C. § 371- Conspiracy to Violate the
Federal Food, Drug and Cosmetic Act and the Lacey Act; and Title 16,
U.S.C. § 3372 (a) (2) (A) - Lacey Act.
On April 26, 2005, JONES was sentenced to serve a one (1) year term
of probation and to pay a $3000 fine.
On May 6, 2005, BELLAR was sentenced to serve three hundred and sixty-six
(366) days incarceration to be followed by two (2) years of supervised
release. He was ordered to pay the government $450,000 as a substitute
for forfeiture of assets, to provide $120,000 restitution to the United
States Fish and Wildlife Service for reimbursement of investigative
costs, and to pay a $5,000 fine.
Kansas City Field Office
Sentencing/Convictions
This case was initiated based on information received regarding a
meeting that took place in late February 2002 between Fred SOLMOR,
Reggie MCCOY and Paul WARD. SOLMOR had directed WARD to hi-jack and
rob a Cardinal Distribution truck. The drugs would be sold to SOLMOR
who in turn would sell the drugs to various diverted drug outlets.
The Houston Police Department (HPD) Robbery squad, was contacted and
confirmed that a Cardinal Distribution truck had been hi-jacked, the
driver bound and all of the $344,000 (wholesale price) of the trucks
contents stolen.
Subsequent to this information, a confidential informant (CI) met
with SOLMOR at his place of business, LARO WHOLESALE. At this time,
WARD and Manvel HOPES also arrived to meet with SOLMOR. As they arrived
carrying a box, SOLMOR asked if the box contained drugs stolen from
the Cardinal truck the night before. WARD responded “yes”.
WARD and HOPES described the robbery and truck contents in detail.
WARD, HOPES and SOLMOR were arrested. HOPES revealed the location
of the truck used to off load the stolen drugs. A receipt from the
rental truck was located in the name of Harold MORRISON. MORRISON
was interviewed and admitted his involvement in the robbery. MORRISON
was arrested.
At this same meeting, prior to WARD arriving, MCCOY met with SOLMOR.
MCCOY, a Houston pharmacist, was formerly employed by MD Anderson
Cancer Hospital. During the meeting MCCOY bragged about the amount
of cancer drugs he had stolen and directed to be stolen from MD Anderson
Cancer Hospital. MCCOY was subsequently arrested and interviewed.
MCCOY’s interview and other investigation led to the arrests
of MD Anderson pharmacy techs Debra GRIGS, Jeffery HUDDLESTON, Jeremy
GUTIERREZ and Chris FELAN, all related to the thefts of cancer drugs
from MD Anderson Hospital and Methodist Hospital. Internal audits
revealed MD Anderson lost over $2,000,000 and Methodist Hospital lost
over $300,000 in cancer drugs to the thefts.
On September 16, 2002, GRIGGS was sentenced to one hundred and twenty
days (120) days and ten (10) years deferred probation, after being
convicted of Theft under the Texas Penal Code.
On November 14, 2002, GUTIERREZ was sentenced to three (3) years and
six (6) months after being convicted of Theft under the Texas Penal
Code.
On November 21, 2002, HUDDLESTON was sentenced to (6) six months incarceration
and ten (10) years probation, after being convicted of Theft under
the Texas Penal Code.
On January 10, 2003, FELAN was sentenced seven (7) years incarceration,
after being convicted of Theft under the Texas Penal Code.
On March 6, 2003, MCCOY was sentenced to twenty-two (22) years incarceration,
after being convicted of Theft under the Texas Penal Code.
On January 21, 2004, MORRISON was sentenced to forty (40) years incarceration,
after being convicted of Theft under the Texas Penal Code.
On March 20, 2004, HOPES was sentenced to ten (10) years incarceration,
after being convicted of Theft under the Texas Penal Code.
On April 21, 2004, WARD was sentenced to forty (40) years incarceration
after being convicted on a probation violation relative to his involvement
in the robbery.
On April 15, 2005, SOLMOR was sentenced to fifty-one (51) months incarceration
after being convicted of violating Title 18, U.S.C. § 371- Conspiracy
to Transport Stolen Pharmaceutical Drugs in Interstate Commerce.
This case was worked jointly between the Office of Criminal Investigations
and the Houston Police Department (HPD) Robbery Squad.
Los Angeles Field Office
Sentencing/Convictions
On April 4, 2003, the Office of Criminal Investigations was contacted
by the FDA, San Diego District Office (SAN-DO) regarding alleged hGH
being smuggled into the United States from China by KILOSPORTS. SAN-DO
related that a suspected shipment of hGH was intercepted and detained
by the Department of Homeland Security, Customs and Border Protection.
The consignee on the package was Michelle McDermott, in care of KILOSPORTS,
15214 S. 20th Pl., Phoenix, AZ. Representative samples were taken
from the suspected shipment of hGH which tested positive for the presence
of hGH.
Record inquiries were conducted on KILOSPORTS. The results of the
records search revealed that KILOSPORTS is registered as a business
in the State of Arizona and is owned and operated by Martin J. MCDERMOTT.
Records also revealed that Martin J. MCDERMOTT is married to Michelle
and they reside at 15214 S. 20th Pl., Phoenix, AZ. Furthermore, records
revealed Martin J. MCDERMOTT has a criminal record having been previously
arrested for burglary and possession of narcotics and controlled substances
for sale.
Additional records searches with the State of Arizona Board of Medical
Examiners (BOMEX) and the State of Arizona Board of Pharmacy were
conducted. The results of the records inquiries revealed that the
MCDERMOTTS did not possess any physician, pharmacist, or prescription
drug wholesaler licenses in Arizona.
On May 2, 2003, OCI was notified that the package of hGH was accidentally
released and shipped to Michelle McDermott. Postal records indicated
that, on April 2, 2003, it was delivered to her residence.
On July 23, 2003, an additional suspected shipment of hGH was intercepted.
The package bore no declaration of contents but was determined to
contain 100 vials of lyophilized white powder. A representative sample
was sent to the FDA, Forensic Chemistry Center (FCC) for analysis.
FCC results indicated the presence of the hGH.
On August 13, 2003, a controlled delivery was conducted at the MCDERMOTT
residence. Martin MCDERMOTT signed for the package, and a search warrant
was executed at the MCDERMOTT residence. Items seized at the MCDERMOTT
residence were 78 vials of hGH and a small amount of Mexican steroids.
On March 28, 2005, Martin MCDERMOTT was convicted of violating Arizona
Revised Statute, Title 13, § 3406 - Possession, Use, Administration,
Acquisition, Sale, Manufacture or Transportation of Prescription only
Drugs. He was sentenced to twelve (12) months of supervised probation.
Los Angeles Field Office
Sentencing/Convictions
This investigation was initiated based on the examination of two Federal
Express parcels. The parcels were found to contain approximately 16,400
tablets that were consistent (based on size, shape, and markings)
with Pfizer-manufactured Viagra. Pfizer representatives subsequently
identified the tablets as counterfeit.
The parcel weighed 4.0 kg and was invoiced as "health care samples"
addressed to Chris DO, Health Plus, 1320 N. Pacific Ave., Glendale,
CA. The shipper was identified as "Michael" at EASY PRINTING
CO., LTD., Chao Yang District, Beijing, China. Chris DO was later
identified as Khoa Hoa Twan DO.
The second parcel weighed 10.0 kg and was invoiced as "samples
of health care." This parcel was addressed to DO, Health Plus,
P.O. Box 4656, Glendale, CA. The shipper was identified as "Michael"
at MLP PHARMA CO., LTD., Hai Dian District, Beijing, China.
On January 14, 2003, a Federal search warrant was executed at DO's
residence at 1320 N. Pacific Ave., Glendale, CA. DO was arrested,
booked, and released on his own recognizance.
During September and October 2003, the Office of Criminal Investigations
and the Department of Homeland Security, Immigration and Customs Enforcement
analyzed computer records seized during the aforementioned search
warrant. These records documented that DO purchased and smuggled the
counterfeit Viagra into the U.S.
On June 23, 2004, DO was convicted of violating Title 18, U.S.C. §
371-Conspiracy; Title 18, U.S.C. § 2320 (a) - Trafficking in
Counterfeit Goods; and Title 21 U.S.C. §§ 331 (i) (3) and
333 (a) (2) - Sale of Counterfeit Drugs.
On March 24, 2005, DO was sentenced to eighteen (18) months incarceration,
thirty-six (36) months of probation, and fined $6,000.
Los Angeles Field Office
Sentencing/Convictions
This case originated based on information supplied by the Internal
Revenue Service, Criminal Investigations Division (IRS-CID). IRS-CID
reported the business, WATER OZ, was selling misbranded and adulterated
mineral waters, in addition to ozone generators. The Office of Criminal
Investigations was previously aware of this firm because of a report
from the FDA, District Office, Seattle, WA indicating that one of
their inspectors was prohibited from inspecting the WATER OZ facility
in 1999.
During the investigation, a variety of mineral water products were
purchased from WATER OZ. Information on the WATER OZ website and literature
received with the products indicated these water products were intended
to treat specific diseases, including AIDS and cancer. In addition,
an ozone generator and ozone body suit were purchased from WATER OZ,
which were intended to treat diseases such as skin cancer and gangrene.
Subsequent analysis by the FDA, Forensic Chemistry Center indicated
these products were misbranded, because claims made on the WATER OZ
labels were inaccurate.
In July 2002, a forty-three (43) count sealed indictment was returned,
charging David HINKSON, Owner of WATER OZ, with a variety of tax-related
charges, including failing to file tax returns and structuring transactions
to avoid reporting requirements. In addition, HINKSON was charged
with multiple counts of introducing adulterated and misbranded drugs
and devices into interstate commerce.
On November 21, 2002, search warrants were executed at the WATER OZ
manufacturing facility located outside of Grangeville, ID. HINKSON
was also arrested at this time, based on the aforementioned indictment
and released on bail.
In April of 2003, HINKSON was again arrested after the Federal Bureau
of Investigation uncovered evidence that HINKSON had attempted to
hire associates to murder the IRS-CID case agent, Assistant United
States Attorney (AUSA), and the United States District Court judge
assigned to this case. In addition, HINKSON allegedly solicited the
murder of the children of the AUSA and IRS-CID agent. Based on these
new allegations, HINKSON’s bail was revoked, and he was remanded
to custody.
In April 2004, HINKSON was convicted of violating Title 21, U.S.C.
§ 331(a) & 333 (a) (1) - Introduction into Interstate Commerce
of a Misbranded Drug and Medical Device. On May 4, 2004, after a seven
day jury trial, HINKSON was convicted on all tax-related counts.
On June 22, 2004, HINKSON was indicted on nine (9) counts of violating
Title 18, U.S.C. § 373- Solicitation to Commit a Crime of Violence,
and two (2) counts of violating Title 18, U.S.C. § 115(a)(1)(b)-
Retaliating Against a Federal Official by Threatening a Family Member.
On January 28, 2005, after a two week jury trial, HINKSON was convicted
of three (3) counts of solicitation of murder of federal officials.
A joint sentencing hearing was scheduled for both cases.
On June 3, 2005, HINKSON was sentenced to a total of ten (10) years
incarceration on the IRS and FDA counts, ten (10) years each on the
three (3) counts of solicitation, and an additional three(3) years,
because the solicitation crimes were committed while HINKSON was on
pre-trial release. This forty-three (43) year sentence was ordered
to be served consecutively.
The judge concluded that HINKSON showed a “complete lack of
remorse,” continued to blame others for his crimes, and was
“not amenable to any form of rehabilitation.” In addition,
the judge also indicated that he would recommend to the Bureau of
Prisons that HINKSON be considered a high-risk inmate, because of
his continued hatred of federal officials and his financial ability
to carry out his threats and flee the country if he escaped.
Los Angeles Field Office
Sentencing/Convictions
This case was initiated based on an extortion letter received at a
Ralphs grocery store, Compton, CA. Initial investigation identified
the recipient of the extortion letter as the Ralphs/Kroger General
Administrative Offices, Compton, CA. The extortion letter arrived
at the facility’s mail room in a cardboard box that contained
four (4) consumer products identified as horseradish, Gerber carrot
baby food, powdered baby food, and Gerber baby juice drink, alleged
to have been tampered with boric acid, splinters of thin walled glass,
and hydraulic fluid. The letter advised that the tampered goods were
not in the marketplace at the time, but could be introduced in an
“all out assault” on all types of food and all manufacturers.
The extortion letter indicated a subsequent mailing would identify
demands and was signed, “FUN BOY THREE." The parcel bore
a Venice, CA, United States Postal Service, Priority Mail, serial
number/receipt and postmark.
On the same day, Kroger Corporate Offices, Cincinnati, OH, received
a copy of the same extortion letter signed, "FUN BOY THREE."
The postage affixed to the letter did not bear any type of postmark
and/or cancellation process.
On March 1, 2004, a follow-up extortion letter was received at the
Ralphs/Kroger General Administrative Offices, Compton, CA, that demanded
$180,000 and a $100,000 “penalty” if Ralphs/Kroger failed
to proceed with payment as dictated. The extortionist demanded Ralphs/Kroger
issue 9,000 ATM cards, disguised in any format, for simultaneous distribution
on March 26, 2004 to three (3) specified Ralphs store locations in
the San Diego, Los Angeles, and San Francisco, CA, areas. Prior to
the distribution, Ralphs/Kroger was to place an advertisement in the
Los Angeles Recycler newspaper for a musical instrument, and within
the advertisement, the Personal Identification Number (PIN) for the
ATM card would be located, disguised as the “model” number.
This PIN would then enable the extortionist to access the money anywhere
in the world.
Subsequent forensic analysis of the food items by the FDA, Forensic
Chemistry Center confirmed the presence of the contaminants as threatened
by “FUN BOY THREE.”
The surveillance video was retrieved from the lobby of the United
States Post Office in Venice, CA, that depicted the “mailer”
of the tampered items.
On March 26, 2004, surveillance operations were initiated of all customers
entering and exiting the three previously identified Ralphs stores
for a possible match to the individual depicted in the surveillance
video. During the course of the surveillance at the Los Angeles Ralphs
store, a white male, closely resembling the individual depicted in
the surveillance video, was observed making a purchase and receiving
a Ralphs ATM card, which he studied carefully.
This individual was subsequently identified as David Ian DICKINSON,
a British national. Further investigation concluded that DICKINSON
was, most likely, the extortionist known as “FUN BOY THREE.”
On May 5, 2004, a federal search warrant was executed at the residence
of DICKINSON in Venice, CA. Subsequent to the search warrant, DICKINSON
confessed to the tampering of food products and the extortion of Ralphs/Kroger
Companies and was placed under arrest.
On November 30, 2004, DICKINSON was convicted of violating Title 18,
U. S. C. § 1951 - Interference with Commerce by Threats or Violence
(Hobbs Act); and Title 18, U.S.C. § 1365 - Consumer Product Tampering.
On April 1, 2005, DICKINSON a.k.a. “FUN BOY THREE” was
sentenced to sixty (60) months incarceration on each count to run
concurrently. Additionally, DICKINSON was placed on supervised release
for a period of twenty-four (24) months.
Los Angeles Field Office
Sentencing/Convictions
This case was initiated upon a referral relative to the Internet Foreign
Site Counterfeit Drug Survey which identified VINCI-ONLINE.COM as
a web site that offered various prescription drugs and controlled
substances for sale. Investigation identified the Owner/President
as Christian Frederic FINZE and the Secretary as Joan DAVIS, with
associated companies VINCI-AMERICAN LTD., Las Vegas, NV, and CFF PHARMA
CONSULT GmbH, Bergkirchen, Germany.
Two (2) undercover purchases were conducted of Valium and the injectable
steroid Deca-Durabolin without valid prescriptions. The aforementioned
prescription drug products were also misbranded, as the pharmaceutical
package inserts, directions for use, and labeling were in the German
language.
On May 2, 2002, a federal search warrant was executed at the FINZE
residence in Las Vegas, NV. Amongst evidence seized, were thousands
of documents, electronic mail messages for prescription drugs/controlled
substance orders, purchase invoices for same, financial instruments,
computers and small quantities of misbranded prescription drugs, to
include, Rohypnol, commonly referred to as the “date rape drug.”
Also discovered at the residence was a one-way air ticket for FINZE
to return to Germany that week.
On December 18, 2002, a twenty (20) count Superceding Indictment was
returned by the Federal grand jury charging FINZE with violating Title
18, U.S.C. § 371 -Conspiracy to Defraud the United States; Title
18, U.S.C. § 1001 -False Writings; Title 21, U.S.C. § 846
-Conspiracy to Distribute Controlled Substances; Title 21, U.S.C.
§ 963 -Conspiracy to Import Controlled Substances; Title 21,
U.S.C. § 841 -Distribution of Controlled Substances; Title 18,
U.S.C. § 1957 -Engaging in Monetary Transaction In Property Derived
from a Specified Unlawful Activity ; Title 18, U.S.C. § 2 -Aiding
and Abetting; Title 18, U.S.C. § 982(a)(1) & (b)(1) Forfeiture;
Title 21 U.S.C. § 853 (a) & (p) Forfeiture.
On October 28, 2004, FINZE was convicted by a jury on all counts.
On May 6, 2005, FINZE was sentenced to the following terms of imprisonment:
Conspiracy – sixty (60) months; False Writing to an Agency of
the United States and Aiding and Abetting – sixty (60) months
each count; Conspiracy to Distribute Controlled Substances –
one hundred and twenty (120) months; Conspiracy to Import Controlled
Substances – one hundred and twenty (120) months; Distribution
of Controlled Substances and Aiding and Abetting – thirty-six
(36) months; Distribution of Controlled Substances and Aiding and
Abetting – sixty (60) months; Engaging in a Monetary Transaction
in Property Derived from Specified Unlawful Activity and Aiding and
Abetting – one hundred and twenty (120) months each count. All
sentences to run concurrent.
Additionally, FINZE was placed on Supervised Release for a
period of three (3) years at the conclusion of the term of incarceration,
pending deportation proceedings. FINZE was also ordered to pay a criminal
fine in the amount of $15,000.
Los Angeles Field Office
Sentencing/Convictions
This case originated based on information provided by the Department
of Health and Human Services, Office of Inspector General (DHHS-OIG).
DHHS-OIG reported that Dr. Mark ISAACS was advertising the use of
Sotradecol, an unapproved drug, in the treatment of varicose veins.
ISAACS’ advertisement appeared on his website, NORTHERN VEIN
SPECIALISTS OF CALIFORNIA.
The website states that sodium tetradecyl sulfate (STD) is not approved
by the FDA and Dr. ISAACS continues to import STD directly from England,
because he feels “it is the best solution for treating varicose
veins.”
A review of records revealed that Dr. ISAACS billed Medicare for sixty-two
(62) surgeries, for which Medicare refused to pay, since the drug
was unapproved.
The FDA, Center for Drug Evaluation and Research, advised there is
no approved drug containing Sodium Tetradecyl Sulfate. A manufacturer,
Elkins-Sinn, had the only current New Drug Application in the United
States for Sodium Tetradecyl Sulfate under the brand name Sotradecol.
Elkins-Sinn stopped manufacturing Sotradecol in September 1991.
On May 22, 2003, a telephone call was placed to Dr. ISAACS’
office. The call was answered by a female named “Mickey,”
a medical assistant. During the telephone call, Mickey stated Sotradecol
is approved in England, but not in the USA, because no company wanted
to go through the cost of having the drug approved. Mickey was asked
if it mattered to the FDA that the drug wasn't approved. Mickey stated
she didn't think so, because Dr. ISAACS has been using it since 1990,
and there are a lot of other doctors who use it as well. Mickey offered
to send a brochure explaining the procedure as well as information
on the use of Sotradecol.
On June 2, 2003, the brochure was received however there was no mention
of Sotradecol in the pamphlet.
On September 10, 2003, a former medical assistant was interviewed.
She worked for Dr. ISAACS as a medical assistant for approximately
one year in 1999. One of her main responsibilities was to fill the
syringes that were used in sclerotherapy procedures.
Although, initially, she did not recall the name of the solution
Dr. ISAACS used in treating varicose veins, she recognized it as being
Sotradecol when given the name. Prior to the procedure, patients are
shown a fifteen (15) minute video that explains the procedure and
the solution that is used.
Former patients were also interviewed in order to determine what they
were told about the sclerotherapy procedure and, specifically, what
solution was used. The patients all believed the solution was a saline
solution, and none of them recalled any discussion about FDA approval.
On September 24, 2003, an additional call was placed to DR. ISAACS'
office in an attempt to obtain the videotape. The call was answered
by “Terry.” Terry stated the videotape is only shown to
the patient at the initial consultation, which also includes an ultrasound
of the veins, a treatment plan, and discussion of cost and insurance.
On November 17, 2003, Dr. ISAACS was interviewed by DHHS-OIG. During
the interview, Dr. ISAACS stated patients are given a three (3) page
evaluation, brochures, and documents explaining the sclerotherapy
procedure and a written estimate of the cost.
Regarding the use of Sotradecol, Dr. ISAACS stated patients
are given a general explanation of what it is and are told that, since
it is no longer manufactured in the United States, the solution he
uses is imported from England. Dr. ISAACS stated Sotradecol is a Wyeth
product that is no longer manufactured in the United States, which
has created a problem for physicians, because they feel it is the
best product to use. He imports a product called Fibrovein directly
from England. Dr. ISAACS stated he was informed by his malpractice
insurers that the use of this non-approved generic form of a drug
is acceptable, and it can be used legally if the patient is informed
of its use and provides consent to its use.
Dr. ISAACS voluntarily provided a copy of a videotape that is shown
to patients during the initial consultation visit. The videotape states
the solution used by Dr. ISAACS in the treatment of varicose veins
is Sotradecol and does not mention the use of Fibrovein.
On March 8, 2005, Dr. ISAACS was convicted of violating one (1) count
of Title 21, U.S.C. §§ 331(d) and 333(a)(1) – Introduction
into Interstate Commerce of an Unapproved Drug. He was sentenced the
same day to one (1) year probation and was ordered to pay $5,000 in
court fines and $150,000 in civil forfeiture.
Los Angeles Field Office
Sentencing/Convictions
This case was initiated based on information received regarding a
possible tampering of Hydroxycut, a dietary supplement promoted to
aid in weight loss.
The investigation determined that in late August 2001, Larry SEVERSON
and his wife began having marital problems. SEVERSON’s wife
refused to consent to a divorce and threatened to “take everything”
including SEVERSON’s truck, real property and business, which
were all in her name. Later that year, the couple attempted to reconcile.
In January 2002, SEVERSON’s wife purchased two bottles of Hydroxycut
from the GNC Store in the Boise Mall, Boise, ID. About mid January
2002, she began vomiting blood and complained of stomach problems.
She attributed the illness to the Hydroxycut and stopped taking the
capsules.
On January 31, 2002, SEVERSON’s wife was diagnosed with stomach
ulcers and treated by a Mountain Home, ID physician. On February 4,
2002, SEVERSON’s son, Michael, telephoned the FDA and complained
that the Hydroxycut had caused his stepmother’s illness. An
FDA Consumer Safety Officer (CSO) responded to Mountain Home, ID but
Larry SEVERSON declined to release the product to the CSO.
On February 15, 2002, pursuant to a telephone call from SEVERSON,
Michael went to the residence, determined that SEVERSON’s wife
was not breathing and notified the authorities. She was later pronounced
dead.
The Elmore County Sheriff’s Office (ECSO) executed several local
search warrants at the SEVERSON residence and business. The ECSO seized
the two bottles of Hydroxycut, one opened and the second apparently
sealed; a trash can with powder residue and what appeared to be parts
of empty capsules and other items.
The bottles were examined by the FDA Forensic Chemistry Center (FCC)
and it was determined that approximately one half of the capsules
in the open bottle contained Draino® crystal drain cleaner. The
remaining one half of the capsules contained genuine product.
The FCC examined the apparently sealed second bottle and determined
that the outer and inner safety seals had been removed and reattached
with cyanoacrylate adhesive (a.k.a. super glue) and approximately
one half of the capsules inside the apparently sealed second bottle
contained Draino® crystal drain cleaner.
The FCC succeeded in differentiating between various brands of cyanoacrylate
adhesive (a.k.a. super glue) and in fact between various production
lots of the same brand of both adhesives and Draino® using Fourier
Transform Infrared Spectroscopy (FTIS) and other analytical methods.
During the course of the investigation, evidence was obtained that
indicated SEVERSON placed the Draino® in the Hydroxycut capsules
ingested by his wife. SEVERSON was subsequently charged with first-degree
murder and poisoning. The poisoning charge in the State of Idaho is
equivalent of the Federal Anti-Tampering violation (Title 18, U.S.C.
§ 1365).
In November 2004, SEVERSON was convicted by a jury of both the murder
and poisoning charges.
On June 22, 2005, SEVERSON was sentenced to incarceration for life
without the possibility of parole for the murder conviction and five
(5) years incarceration for the poisoning conviction. Both sentences
were ordered to run concurrently.
Metro Washington Field Office
Sentencing/Convictions
This case was initiated in October 2002, when the FDA Baltimore
District Office advised that Perry M. BEALE of Stafford, Virginia
had been recently administratively sanctioned by the Nuclear Regulatory
Commission (NRC) for fabricating the results for radioactive xenon
gas clearance testing rates at various hospitals.
BEALE, working as a radiation physicist, was also suspected of falsifying
calibration data regarding mammography machines, in violation of the
Mammography Quality Standards Act (MQSA) and was suspected of fabricating
his academic and professional credentials to be qualified and licensed
as a radiation physicist.
It was learned that BEALE had previously worked as an intern for a
genuine radiation physicist. Upon the death of the physicist in the
mid-1980’s, BEALE purchased all of his testing equipment, and
falsely assumed the role as the radiation physicist for the deceased
physicist’s customer base.
In addition, BEALE altered his undergraduate transcript to reflect
advanced science courses never taken as well as higher course grades.
It was determined that BEALE had counterfeited his radiation physicist
certificate from the American Board of Radiology, and completely fabricated
his claim of earning a Master of Science degree from the University
of Virginia. BEALE represented himself a radiation physicist at over
fifty (50) medical facilities in the Maryland, Virginia, Pennsylvania,
West Virginia, District of Columbia, and North Carolina areas for
approximately fifteen (15) years.
Using his false credentials, he was contracted by facilities that
ranged from single-practice physician offices to major institutions
such as The George Washington University Medical Center and the Central
Intelligence Agency Office of Medical Services.
BEALE’s responsibilities as a radiation physicist entailed full
quality assurance and safety testing of a myriad of radiological medical
devices and accessories, ranging from basic x-ray machines to mammography
and fluoroscopy machines. He was also responsible for vital tasks
such as determining lead wall thickness in radiology suites and the
accountability of highly controlled sealed sources of radiation, used
to calibrate medical devices.
BEALE not only fabricated his credentials, but also falsified his
inspection data, often times “guessing” the results if
he was unsure and on at least “twenty five to fifty times”
admitted generating an inspection report without even visiting the
facility and physically looking at the machines. BEALE had certified
radiological medical devices as fully operable and safe when, in fact,
they had been taken out of service years earlier. Additionally, he
verified, at numerous facilities, that their sealed sources of radiation
were present and accounted for, when in fact they had been properly
disposed of years earlier. At one facility, for a ten-year period,
BEALE falsely certified that a highly radioactive sealed source was
present and accounted for when it had already been disposed of years
prior.
On May 12, 2005, BEALE was convicted of violating thirty-eight (38)
counts of Title 18, U.S.C. § 1341- Mail Fraud. BEALE was sentenced
to serve fifty-four (54) months incarceration, ordered to pay restitution
in the amount of $375,000 to the facilities he defrauded, and ordered
to pay a special assessment of $3,800. Upon his release from prison,
BEALE was ordered to be placed on supervised probation for a period
of thirty-six (36) months.
This joint investigation was conducted by the FDA Office of Criminal
Investigations, the FDA Baltimore District Office, and the Nuclear
Regulatory Commission Office of Investigations.
Metro Washington Field Office
Sentencing/Convictions
In November 2004, the Virginia State Police advised that Santiago
GONZALES-FLORES, a citizen of Peru, and a non-licensed person acting
as a physician, conducted medical exams and prescribed and dispensed
unapproved medications to a number of patients in the Manassas, Virginia
area.
During a "consent search" of the office used by GONZALES-FLORES,
various medical records and a number of containers of antibiotic pills
including, but not limited to amoxicillin and penicillin were recovered.
The labeling on the primary and secondary packaging was printed in
Spanish only. The drugs were manufactured outside of the United States.
On April 15, 2005, GONZALES-FLORES was convicted of violating one
(1) felony count of Title 21, U.S.C. §353(b)(1)(B) –Dispensing
of a Prescription Drug Without a Valid Prescription. GONZALES-FLORES
was sentenced to one (1) year of supervised probation and will later
be deported.
This was a joint investigation with the Virginia State Police.
Metro Washington Field Office
Sentencing/Convictions
The case against BIOCHIMICA OPOS (OPOS) was initiated in 1997 based
on a referral from the Office of Compliance, Center for Drug Evaluation
and Research (CDER). Eli Lilly had alleged to CDER that OPOS, an Italian
manufacturer of bulk active pharmaceutical ingredients, had falsified
FDA submissions related to the locations and methods they used to
manufacture cefaclor and other drug products. CDER directed that an
inspection be conducted on-site at OPOS’ facility in Agrate
Brianza, Italy, where evidence of falsified production records was
discovered.
The ensuing investigation uncovered three specific crimes committed
during OPOS’s manufacture of cefaclor. First, the company subcontracted
out the manufacture of one intermediate ingredient to Archimica, which
was proper, but Archimica then re-subcontracted that step to an unapproved
firm in Iasi, Romania. Second, OPOS subcontracted out the manufacture
of two additional intermediates to Archimica which it was not allowed
to do under its own drug master file. Finally, OPOS substituted a
required chemical in the processing of cefaclor with a different,
unapproved chemical. The investigation revealed Luigi RATTI controlled
both OPOS and Archimica and would make 5% of the profits realized
by OPOS.
On October 19, 2001, Aventis Pharmaceuticals, Inc., parent company
of Roussel-Uclaf and BIOCHIMICA OPOS, was convicted of violating Title
18, U.S.C. § 371 – Conspiracy and Title 21, U.S.C. §
331 (a) - Distribution of Adulterated Drugs. The company was sentenced
to pay a criminal fine of $23,193,660 and to voluntarily forfeit $10,000,000
to the United States.
The investigation into the people who were behind the conspiracy continued.
The investigation revealed that RATTI orchestrated the creation and
maintenance of false records that were used to mislead the FDA during
its inspections of OPOS. The documents stated the drug was manufactured
in accordance with the company’s FDA submissions but concealed
the fact that elements of the manufacture had been subcontracted out
to another RATTI-controlled corporation and a Romanian firm that were
not authorized to conduct those steps. Those documents also concealed
the fact that an unapproved chemical was used in the process of making
cefaclor.
On July 16, 2003, RATTI, former President and Chief Executive Officer
of BIOCHIMICA OPOS, was named in a sealed indictment. The indictment
listed twelve charges, including shipment of adulterated drugs in
interstate commerce, making false statements, wire fraud and conspiracy.
A warrant was issued for his arrest, but RATTI remained an Italian
citizen residing in Switzerland.
On March 30, 2004, RATTI, attempted to enter the United States at
the Miami International Airport. He was unaware of the arrest warrant
and was arrested and placed in the custody of the United States Marshal’s
Service. On April 1, 2004, RATTI was detained without bond and extradited
to the District of Maryland.
Eventually, on May 2, 2005, RATTI was convicted of violating Title
21, U.S.C. § 331 (d) and 333 (a) (2) – Introduction or
Delivery into Interstate Commerce an Unapproved Drug. RATTI was sentenced
to one (1) month and two (2) days incarceration; twelve (12) months
of home detention; pay a criminal fine of $16,481,000; and forfeit
$300,000 to the United States government. Metro
Washington Field Office
Sentencing/Convictions
This investigation was initiated in May 2002, based on a consumer
complaint to the FDA, Cincinnati District Office regarding Dr. Jack
Edwin SLINGLUFF of Canton, OH, a licensed osteopath in Ohio. The complaint
alleged that Dr. SLINGLUFF was administering intravenous Laetrile
treatments for cash to a cancer patient, now deceased.
In August 2002, an undercover meeting was held with Dr. SLINGLUFF
at Lake Cable Medical Center in Canton, OH, his medical practice.
During this meeting Dr. SLINGLUFF confirmed that he administered Laetrile
treatments to his patients but required them to obtain their own Laetrile.
An office assistant provided a piece of paper entitled “Laetrile
Order Info” which contained the name Betty Miller, the telephone
number 561-714-6891 and a company name of Healthy Options.
In September 2002, an undercover order for Laetrile was placed to
the telephone number provided. A few days later the Laetrile package
was received with a return address listing a post office box located
in West Palm Beach, FL.
In October 2002, United States Postal Service records were reviewed
and it was determined that the post office box listed on the package
was registered to Marilyn NORTON at her home address in West Palm
Beach, FL. Another call was made to the number supplied by Dr. SLINGLUFF.
During this call the female who answered the phone advised “Betty
is my code name, my real name is Marilyn. That’s how I know
who SLINGLUFF’s patients are…see how sneaky we are.”
On January 30, 2003, three federal search warrants were served at
Dr. SLINGLUFF’s medical practice, NORTON’s business address
and residence. During the search at NORTON’s residence, she
advised that she had been in business for approximately two years,
she was aware that Laetrile was used for the treatment of cancer and
that she has been involved with Laetrile for approximately 30 years
as her former husband, Steven Michaelis (deceased) also sold Laetrile.
After the warrant, it was determined that NORTON was the mother of
Kenneth Michaelis who had been previously prosecuted. Kenneth Michaelis
was convicted of two felony counts of distributing unapproved new
drugs, Laetrile and Hydrazine Sulfate.
In March 2004, Dr. SLINGLUFF was convicted of violating Title 21,
U.S.C. §§ 331(d), 355 (a) and 333(a) (1) - Interstate Distribution
of an Unapproved New Drug.
In May 2004, Dr. SLINGLUFF was sentenced to serve one (1) year supervised
probation.
In April 2005, NORTON was convicted of violating Title 18, U.S.C.
§ 371 – Conspiracy; Title 21, U.S.C. §§ 331(p)
and 333(a)(1) - Failure to Register a Drug Manufacturing Facility;
and Title 21, U.S.C. §§ 331(a), 333(a)(1) and 352 –
Introduction into Interstate Commerce of a Misbranded Drug NORTON
was sentenced to serve two (2) years supervised probation.
Metro Washington Field Office
Sentencing/Convictions
This investigation was initiated based on a referral from the FDA,
Cincinnati District Office. A Cincinnati based fitness products firm
named Pinsons Fitness Products was engaged in fraudulent activity
involving the production and distribution of weight loss products
containing the active ingredient Tiratricol. Tiratricol is a potent
thyroid hormone that may cause serious health consequences including
heart attacks and seizures. Pinsons Fitness Products is owned and
operated by Phillip R. HENSON out of his private residence located
at 2424 Kellerman Ave, Cincinnati, OH.
On November 11, 1999, FDA issued a warning to consumers against the
consumption of products containing the active ingredient Tiratricol.
FDA noted that several products containing Tiratricol are being marketed
as dietary supplements for weight-loss purposes. FDA noted that Tiratricol
is a potent thyroid hormone and may cause serious health consequences
including heart attacks and strokes. The warning identified two specific
companies that were ordered to discontinue marketing products that
contained Tiratricol, to include Syntrax Innovations and Pharmatech.
Both companies complied with the request and discontinued manufacturing
products containing Tiratricol.
On December 13, 2001, a search warrant was executed on Pinsons Fitness
Products located at 2424 Kellerman Avenue, Cincinnati, OH. During
the execution of the warrant, products, documents, and computers were
seized from the business and residence.
As a result of information obtained during the search warrant, it
was determined that between June 6, 2000 and December 11, 2001, HENSON
sold approximately 57,240 pills containing Tiratricol to customers
located throughout the world and collected approximately $30,144 from
those sales.
On January 29, 2002, FDA, Center for Drug Evaluation and Research
(CDER) sent an informational letter to customers that had purchased
products containing Tiratricol from HENSON over the last four months.
This letter was sent to warn consumers against the consumption of
products containing Tiratricol and the hazards associated with such
consumption.
On August 16, 2004, HENSON was convicted of violating Title 21, U.S.C.
§ 331 (a) - Introduction of a Misbranded Drug into Interstate
Commerce.
On March 30, 2005, HENSON was sentenced to nine (9) months home confinement
with electronic monitoring, and three (3) months supervised release.
Metro Washington Field Office
Sentencing/Convictions
This case originated as a result of an investigation in which two
federal search warrants were executed. One search warrant was executed
at the residence of Mark RUBIN, 275 Kingsclere Drive, Southampton,
PA and the second search warrant at RUBIN’s business, Summerdale
Pharmacy, 900 Sanger Street, Philadelphia, PA. That investigation
revealed that many of the physician drug samples seized had been provided
by Bruce GOLDBERG.
On December 14, 2000, four subpoenas were delivered to Bruce and Kathleen
GOLDBERG, 673 Kenwood Road, Huntington Valley, Pennsylvania. The subpoenas
were issued for exemplars of Bruce and Kathleen GOLDBERG’s handwriting,
and business records for Marcus Foster Pharmacy and K & A Pharmacy,
both owned by the GOLDBERG’S.
On December 19, 2000, Bruce GOLDBERG advised that he and his wife
purchased Marcus Foster Pharmacy in approximately 1985 and purchased
K & A Pharmacy in August 1999. Goldberg advised that his primary
supplier of physician drug samples was Stanley BAZILLIAN. GOLDBERG
admitted that he paid BAZILLIAN one third of the Average Wholesale
Price (AWP), approximately $200,000 over a two year period.
GOLDBERG identified two other suppliers of physician drug samples,
Kenneth WALSH and William SZYMANSKI. WALSH and SZYMANSKI were Searle
Sales Representatives. GOLDBERG paid $ 7,500 to WALSH and $1,000 to
SZYMANSKI for drug samples.
On October 8, 2004, SZYMANSKI was convicted of violating Title 21,
U.S.C., § 331(k) and 352(a)- Introduction of Misbranded Drugs
While Held for Sale.
On December 6, 2004, SZYMANSKI was sentenced to thirty-six (36) months
probation, a $2,500 fine, and ordered to pay $6,000 in restitution.
On January 26, 2005, WALSH was convicted of violating Title 21, U.S.C.
§ 331(t), 333(b) (1) (B), and 353(c) - Illegal Distribution of
Prescription Drug Samples.
On April 27, 2005, WALSH was sentenced to four (4) years probation,
six (6) months home detention with an electronic monitoring device,
$19,500 in restitution, and a $5,000 fine.
On May 11, 2005, Bruce GOLDBERG was sentenced to three (3) years probation,
and fined $25,000. GOLDBERG was previously convicted of violating
Title 21, U.S.C. §331(t), §333(b) (1) (B) and §353(c)-Sale
of Drug Samples; and Title 18, U.S.C. §371 & §1347 -Conspiracy
to Commit Health Care Fraud.
Metro Washington Field Office
Sentencing/Convictions
This case originated when a cooperating defendant (CD) identified
Howard DALL, a pharmacist and owner/operator of several Philadelphia
area pharmacies, as being involved in the receipt and distribution
of physician drug samples. The CD advised that DALL was the primary
recipient of the physician drug samples prior to Mark RUBIN, a defendant
in another case. DALL paid 50% of the Average Wholesale Price for
the drug samples.
On separate occasions, the CD purchased physician drug samples from
DALL. The total purchase amount totals $8,900.
On June 2, 2005, DALL was sentenced to three (3) months in a half-way
house, three (3) years supervised release to include six (6) months
of home confinement with an electronic monitoring device, a $50,000
fine, and $100,000 in restitution. DALL was previously convicted of
violating Title 21, U.S.C. § 331(t), § 333(b) (1) (B) and
§ 353(c) - Sale of Drug Samples; and Title 18, U.S.C. §
371 & § 1347-Conspiracy to Commit Health Care Fraud.
Metro Washington Field Office
Sentencing/Convictions
This case originated as a result of a cooperating defendant (CD) advising
that Mark RUBIN had approached him regarding the purchase of prescription
drugs at 60% of the Average Wholesale Price (AWP). RUBIN was the Owner/Operator
of SUMMERDALE PHARMACY located at 900 East Sanger Street, Philadelphia,
Pennsylvania.
On March 22, 2000, the CD met with RUBIN to discuss the prescription
drugs RUBIN was offering for sale. At this meeting, RUBIN provided
a list of 38 prescription drugs.
On March 28, 2000, an undercover cover purchase of prescription drugs
was conducted from RUBIN. The total cost was $11,269.26 and included
the drugs: Zyprexa, Celexa, Prozac, Augmentin, Remeron, Cefzil, Biaxin,
and Paxil.
On March 30, 2000, a second undercover cover purchase of prescription
drugs was conducted from RUBIN. The total cost of this purchase was
$5,633.41.
Three subsequent undercover purchases of prescription drugs were conducted.
On September 26, 2000, federal search warrants were executed at RUBIN’S
residence and at the pharmacy.
On January 11, 2005, RUBIN was convicted of violating Title 18, U.S.C.,
§ 371 & 1347- Conspiracy to Commit Health Care Fraud: and
Title 21, U.S.C. § 331(t), 333(b) (1) (B), and 353(c) - Illegal
Distribution of Prescription Drug Samples.
On May 13, 2005, RUBIN was sentenced to twelve (12) months and one
(1) day incarceration; 3 years supervised release, and ordered to
pay a $75,000 fine.
In addition, there were other multiple defendants associated with
this investigation.
Andrew POULSHOCK, D.O. sold prescription drug samples to RUBIN and
was paid $50,000. On October 12, 2004, POULSHOCK was convicted of
violating Title 21, U.S.C., § 331(k) and 352(a) - Introduction
of Misbranded Drugs While Held for Sale. On January 10, 2005, POULSHOCK
was sentenced to thirty-six (36) months probation, five (5) months
of home confinement with electronic monitoring, and a $30,000 fine.
PHILIP LIPSON, D.O. received and illegally sold prescription drug
samples to RUBIN. On January 13, 2005, LIPSON was convicted of violating
Title 21, U.S.C. § 331(t), 333(b) (1) (B), and 353(c) - Illegal
Distribution of Prescription Drug Samples. On June 22, 2005, LIPSON
was sentenced to sic (6) months home detention, and a $40,000 fine.
Richard KOFF, MD sold prescription drug samples to RUBIN. On January
27, 2005, KOFF was convicted of violating Title 21, U.S.C. §
331(t), 333(b) (1) (B), and 353(c) - Illegal Distribution of Prescription
Drug Samples. On May 5, 2005, KOFF was sentenced to four (4) years
probation, six (6) months home detention with electronic monitoring,
and a $20,000 fine.
Metro Washington Field Office
Sentencing/Convictions
The investigation of OVIMMUNE, INC was predicated upon information
from the FDA’s Cincinnati District Office (CIN-DO) that the
firm and its two corporate officers were conducting unapproved trials
with a dried egg powder which they claimed had curative powers.
In 1992, Marilyn COLEMAN, who held a legitimate PhD in poultry science
but claimed to have two PhDs and a medical degree, and Mitchell V.
KAMINSKI, MD., a plastic surgeon practicing outside Chicago, Illinois,
formed the corporation OVIMMUNE to manufacture antibodies to treat
diseases in humans and other animals. They claimed to make the antibodies
by inoculating chickens and drying the chickens’ eggs, which
allegedly contained the antibodies.
In 1999, COLEMAN and KAMINSKI convinced Raymond Suen, proprietor of
a health food store in Seattle Washington, to fund the venture with
$85,000. In 2000, COLEMAN purchased 10,000 chickens, arranged for
an experimental vaccine to be created and inoculated the chickens
in three stages. Over 1,000 chickens died, but the remaining hens
began producing eggs. Within months, OVIMMUNE had thousands of pounds
of dried egg powder, far more than Suen could sell as a cure for yeast
infections. OVIMMUNE soon canceled their contract with Suen and began
seeking other outlets for the powder.
In March 2001, COLEMAN approached a rural school system in central
Ohio and asked if the school would permit her to experiment on the
students. She claimed that the egg powder now cured Attention Deficit
Disorder (ADD), autism and other disorders. The school contacted the
FDA, and a Consumer Safety Officer (CSO) from CIN-DO spoke with COLEMAN
about her plans. The FDA, Center for Biologics Evaluation and Research
then conducted a conference call with COLEMAN and KAMINSKI, instructing
them to conduct no further clinical trials until they had the appropriate
Investigations New Drug application on file with the FDA. The following
morning, COLEMAN held a meeting at a local church, soliciting local
citizens to submit experiential data in exchange for dozens of free
eggs. FDA was notified of this solicitation and CIN-DO referred the
matter to the Office of Criminal Investigations.
Based upon claims made on OVIMMUNE’s website, an undercover
agent contacted COLEMAN and suggested he had debilitating arthritis.
COLEMAN sold the agent a regimen of egg powder for $265 to treat his
disease and another bag of egg powder to treat his wife’s foot
fungus for $25. While in the COLEMAN residence, eggs were observed
being broken by local “volunteers” under incredibly unsanitary
conditions. A search warrant was executed at the residence which chronicled
the filthy conditions under which the eggs were stored and broken,
including the existence of a dead cat found in a freezer three feet
away from the un-refrigerated eggs.
Scientists at FDA’s Jamaica, NY laboratory facilities analyzed
the egg powders and found none of the antibodies OVIMMUNE claimed
the eggs contained, but did find several different pathogens and molds.
OVIMMUNE made nearly $240,000 selling their “egg antibodies”
to human patients and farmers trying to control diseases in farm animals,
all without the United States Department of Agriculture or FDA approvals.
On April 29, 2005, COLEMAN and KAMINSKI were sentenced to five (5)
years probation, including six (6) months incarceration in a federal
halfway house and another six (6) months under electronically monitored
home confinement; fined $6,000; and ordered restitution in the amount
of $33,000 to their patients. COLEMAN and KAMINSKY were previously
convicted by a jury of multiple Food, Drug and Cosmetic Act charges.
On June 30, 2005, OVIMMUNE was sentenced to five (5) years probation
and ordered to pay $33,604 in restitution to the patients who purchased
the powder.
Metro Washington Field Office
Sentencing/Convictions
The investigation of Dr. Robert KEENAN, MD, was predicated upon information
received by FDA’s Center for Drug Evaluation and Research (CDER).
In 2001, KEENAN had obtained bulk phentermine hydrochloride from a
supplier in Wyoming. He manufactured the phentermine into capsules
and distributed those capsules to numerous physicians in interstate
commerce.
The investigation revealed that Dr. KEENAN operated weight-loss centers
in Towson and Columbia, MD, where he prescribed and dispensed phentermine
to his own patients. At the same time, KEENAN distributed the medication
to other physicians in other states under the guise of a clinical
study, without an approved Investigational New Drug application. KEENAN
obtained the bulk phentermine from a colleague in Edina, MN, and manufactured
30mg and 37.5mg capsules at a local culture media manufacturing firm
utilizing an encapsulation machine. KEENAN refused all of FDA’s
attempts to inspect his encapsulation operation, claiming it constituted
“physician compounding” and was thus exempt from FDA jurisdiction.
CDER rendered an opinion that KEENAN was conducting a manufacturing
operation and distributing an unapproved new drug in interstate commerce.
In 2003, search warrants were executed at KEENAN’s weight-loss
center in Towson, MD, the culture media manufacturing firm in Baltimore,
MD and a weight-loss center in Edina, MN, where evidence of the illegal
manufacture of phentermine capsules was found and seized.
In January 2004, the Baltimore City Police Department received information
regarding an illegal MDMA (Ecstasy) manufacturing organization operating
in the southeastern district of Baltimore, MD. The organization used
at least two locations in the operation, one of which was a condominium
owned by KEENAN. Search warrants were conducted at these locations
and the evidence seized included large quantities of phentermine powder,
precursor chemicals and paraphernalia used in the manufacture of MDMA,
and over 1,000 dosage units of Valium. Four individuals, including
KEENAN, were arrested. Shortly thereafter, a second search warrant
executed at KEENAN’s weight-loss clinic in Towson, MD revealed
additional evidence of the illegal manufacture of phentermine and
MDMA.
On April 25, 2005, KEENAN was convicted by jury of violating Title
21, U.S.C. § 846 - Conspiracy to Manufacture MDMA (Ecstasy) and
Attempting to Manufacture MDMA
On June 30, 2005, KEENAN was sentenced to eighty-four (84) months
incarceration, and three (3) years supervised probation. .
This was a joint investigation with the Drug Enforcement Administration
and the Baltimore City Police Department.
Miami Field Office
Sentencing/Convictions
This case involved the smuggling of illegal caviar and the sale of
adulterated and misbranded product throughout the United States.
MARKY’S CAVIAR, also doing business as Optimus Inc., purchased
sturgeon caviar smuggled into the United States by couriers inside
suitcases without customs declaration or United States Fish and Wildlife
Service (USFWS) inspection. The investigation determined that the
sturgeon caviar and other fish roe sold were adulterated and mislabeled.
The caviar was adulterated by mixing Beluga caviar with less valuable
caviar. The caviar was mislabeled by claiming it to be Russian caviar
when it was Chinese.
On April 15, 2005, OPTIMUS, Inc., doing business as MARKY’S
CAVIAR, was sentenced to pay a $1 million criminal fine into the Lacey
Act Reward Fund, to adhere to a stringent wildlife compliance plan,
and five years probation. The sentence was imposed on OPTIMUS, Inc.,
for knowingly purchasing sturgeon caviar with false wildlife invoices,
knowingly purchasing smuggled caviar, and failing to exercise due
care in purchasing smuggled caviar.
This was a joint investigation with the United States U.S. Fish and
Wildlife Service and the Department of Homeland Security, Bureau of
Immigration and Customs Enforcement.
Miami Field Office
Sentencing/Convictions
From June 2001 through March 2002, Carlos ORREGO-MARTINEZ traveled
once a month from the Dominican Republic to Puerto Rico to treat clients
at the Salon de Belleza, which was operated by Evelyn VALENTIN. The
treatments consisted of injections of liquid silicone (an adulterated
device), injections of a product identified as “Karthy Swed”
(another adulterated device) and various unapproved drugs. ORREGO-MARTINEZ
posed as a physician, and his treatment was advertised on Puerto Rico
TV stations and various magazines by his co-conspirator, Sergio LOPEZ.
ORREGO injected these products into famous artists, judges, attorneys,
and physicians, and others.
On August 22, 2002, VALENTIN was convicted of violating Title18, U.S.C.
§ 4 - Misprision of Felony
On September 11, 2002, LOPEZ was convicted of violating Title 18,
U.S.C. § 1343 -Wire Fraud.
On September 23, 2002, after a trial, a hung jury was declared and
ORREGO-MARTINEZ was acquitted by the presiding judge. The judge explained
that there was not enough evidence submitted in trial to sustain that
ORREGO-MARTINEZ had knowledge about the wire transfers charged in
the indictment. Subsequent to this decision, ORREGO-MARTINEZ was charged
pursuant to a new indictment.
On January 17, 2003, VALENTIN was sentenced to one (1) month probation.
On March 5, 2004, LOPEZ was sentenced to time served and to three
(3) years supervised release.
On June 27, 2005, ORREGO-MARTINEZ was sentenced to fifty-eight (58)
months incarceration and three (3) years probation. He was previously
convicted in a second trial of violating Title 18, U.S.C. § 371
– Conspiracy; Title 21, U.S.C. § 331(a) - Introduction
into Interstate Commerce of Adulterated Devices; and Title 21, U.S.C.
§ 331(d) - Introduction into Interstate Commerce of an Unapproved
New Drug.
New York Field Office
Sentencing/Convictions
This investigation involved the smuggling of Ketamine into the United
States from Lima, Peru. On April 4, 2004, Jaime PERDOMO arrived into
the United States from Lima, Peru aboard Continental flight # 1953.
During an examination conducted at the Newark International Airport,
Newark, New Jersey, approximately seven shampoo bottles in PERDOMO's
possession were inspected. Field tests were executed and the suspect
bottles were detained. On April 27, 2004, the product was tested and
confirmed to be ketamine.
On February 4, 2005, PERDOMO was convicted of violating state penal
code violations and was sentenced to three (3) years probation.
This was a joint investigation with the Department of Homeland Security,
Immigration and Customs Enforcement and the New York/New Jersey Port
Authority Police Department.
New York Field Office
Sentencing/Convictions
This investigation began when the Drug Enforcement Administration
asked for assistance regarding Michael TOBACK, President of Westerly
Health Foods, NY. The investigation involved the sale of 1, 4-butanediol,
an analogue to GHB, as a diet supplement. This product was being manufactured
in North Carolina by Todd Kelly ROBERTS and sold by him at Westerly
Health Foods.
On May 12, 2005, ROBERTS and TOBACK were sentenced to time served
and three (3) years of supervised release with ten (10) months to
be served in home confinement. They were previously convicted of violating
Title 21, U.S.C. § 846- Conspiracy to Distribute Controlled Dangerous
Substances.
New York Field Office
Sentencing/Convictions
This investigation was initiated following allegations that BOSTON
SCIENTIFIC CORPORATION had changed the manufacturing process for a
medical device (coronary stent), without notifying the FDA or obtaining
FDA approval.
The investigation revealed that the company commercially distributed
pre-mounted coronary stents which had a manufacturing defect. The
manufacturing defect resulted in random failures of the balloons to
deploy the stents. In addition, the company failed to identify and
segregate the defective devices to ensure that they were not distributed
commercially and failed to establish proper internal procedures to
identify the causes of the defects. From August to October 1998, the
company distributed 34,589 medical devices that were adulterated and
misbranded. There were twenty-six (26) reported patient injuries as
a result of the use of these coronary stents.
On or about May 24, 2005, BOSTON SCIENTIFIC CORPORATION paid $74 million
pursuant to a civil settlement for the distribution of adulterated
and misbranded medical devices.
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