Record-Breaking Internet Pharmacy Prosecution Nets Millions for Iowa
6-Year Federal Investigation Results in 26 Convictions, Forfeiture of Over $7 Million, and Sharing of Over $4 Million in Dubuque, Cedar Rapids, and Des Moines Areas
JUN 16 -- On March 24, 2003, a corner drugstore in Dubuque, Iowa, dispensed 90 diet pills to a California woman based upon an Internet prescription from a doctor in Mississippi. Six years and over 30 million pills later, a nationwide federal investigation of two illegal Internet pharmacies has resulted in the conviction of that doctor and 25 other defendants and the forfeiture of over $7 million.
“This federal prosecution resulted in the most defendants ever convicted in an Internet pharmacy case in the United States. The help of local law enforcement agencies on the case also has led to the largest forfeiture sharing ever in the Northern District of Iowa, with area drug task forces receiving over $4 million to spend on local law enforcement,” said United States Attorney Matt M. Dummermuth.
In September 2003, a federal and local law enforcement team executed a search warrant at the Union Family Pharmacy (now under different ownership) in Dubuque, Iowa. Agents recovered evidence Union Family Pharmacy had unlawfully dispensed over 1.1 million prescription pain, diet, and psychiatric pills over a six-month period for two Internet companies, Pharmacom International Corporation (“Pharmacom”) and Medical Web Services (“MWS”).
Both companies recruited physicians to review drug orders placed by customers over the Internet. There was no physical examination, no preexisting doctor/patient relationship, and rarely any communication of any kind between the physicians and the Internet customers. In the vast majority of circumstances, the Internet customer’s identity was never verified, nor were any medical records submitted. Because it is illegal to provide prescription drugs outside the usual course of professional practice, Pharmacom and Medical Web Services became the primary targets of a Northern District of Iowa investigation.
Orlando BIRBRAGHER , Marshall KANNER, and Alexis AVELLO were the owners and operators of Pharmacom, a Florida corporation that operated from April 2003 to May 2004. More than 246,000 “prescriptions” for a total of about 14.5 million pills were authorized by 16 doctors from various states and filled by pharmacists paid by Pharmacom.
MWS, another Florida corporation, began operating an Internet pharmacy website in June 2002, and between June 2002 and May 2004, at least 175 websites funneled customers to MWS. MWS paid some physicians directly and paid others through recruiters who found doctors and referred them to MWS to review drug orders. Thirty-three physicians from throughout the United States and Puerto Rico were paid by MWS to review and approve on-line drug orders, and MWS had customers in all 50 states, Washington D.C., and Puerto Rico. Over its 23-month operation, MWS sold more than 241,000 separate “prescriptions” for at least 17 million pills.
“The abuse of controlled prescription drugs in this country is a significant problem,” said Art Vogel, Resident Agent in Charge with the Drug Enforcement Administration in Eastern Iowa. “Nearly 7 million Americans abuse prescription drugs, and almost 20% of teenagers report using a prescription drug not prescribed for them. Illegal Internet pharmacies only add to the problem by making it easier for drug abusers to get around limits on access to these drugs.”
In the Northern District of Iowa, 26 defendants + 1 corporation, 3 corporate officers, 2 physician recruiters, 19 doctors, and 1 pharmacist + were convicted in federal court. Twelve additional doctors entered into pretrial diversion agreements or were prosecuted in other districts using information gathered during the investigation. Evidence in the case included 1.5 terabytes of electronic data and well over 440,000 documents + the equivalent of over 150 semi-trailers full of documents. An extensive financial investigation resulted in the successful forfeiture and collection of more than $7 million in assets and interest.
“The substantial amount of money seized from this nationwide scheme will be used to greatly enhance local law enforcement,” said Dubuque County Sheriff Ken Runde. “Especially in tight budget times, forfeiture sharing is a major benefit of working cooperatively on federal cases where there is a local problem with national implications.”
The successful prosecution required coordination among 49 United States Attorneys’ Offices and 36 separate federal, state, and local agencies. This case was part of a broader national Internet pharmacy enforcement effort conducted by the Department of Justice and was coordinated with the Justice Department’s Special Operations Division and attorneys from the Criminal Division’s Narcotic and Dangerous Drug Section.
“This operation is an outstanding example of how the OCDETF Program can coordinate the efforts of a variety of federal, state, and local agencies to dismantle criminal organizations that take advantage of the Internet to illegally sell prescription drugs,” said Stuart Nash, Director of the U.S. Department of Justice’s Executive Office for Organized Crime Drug Enforcement Task Forces (OCDETF) and Associate Deputy Attorney General. “I applaud the hard work and dedication of the law enforcement personnel and prosecutors responsible for this truly significant case.”
Pharmacom’s three owners were convicted on federal charges. Orlando BIRBRAGHER, 51, from Miami, Florida, and Marshall KANNER, 54, from Miami Beach, Florida, each pled guilty to conspiring to illegally distribute prescription controlled substances and to laundering the money from the illegal drug business. Pharmacom forfeited almost $1.3 million.
KANNER was sentenced in January 2009 to 32 months’ imprisonment and forfeited $1.9 million.
BIRBRAGHER was sentenced in December 2008 to 35 months’ imprisonment and forfeited $1.1 million.
Alexis AVELLO , 42, from Coral Gables, Florida, pled guilty to tax evasion + a charge related to his failure to report several million dollars in income from Pharmacom’s illegal operation on his 2004 tax return. AVELLO was sentenced in November 2008 to 36 months’ imprisonment and forfeited $19,313.47.
One of the men hired by Pharmacom to recruit physicians pled guilty to making false statements to federal agents during the investigation of Pharmacom. Miguel HARRIS-BIRBRAGHER, 46, from Miramar, Florida, was sentenced in May 2009 to 3 months’ imprisonment and 3 months’ home confinement.
Eight physicians employed by Pharmacom pled guilty and were sentenced to conspiring to illegally distribute prescription controlled substances and to laundering the proceeds of that drug conspiracy. Each physician was also ordered to forfeit the money received from Pharmacom.
Dr. Peter LOPEZ , 55, from San Antonio, Texas, was sentenced in December 2008 to 22 months’ imprisonment and ordered to forfeit $242,171.
Dr. Roselyn RICE , 54, from Freeman, Virginia, was sentenced in May 2008 to 26 months’ imprisonment and ordered to forfeit $137,180.
Dr. Thomas HANNY , 72, from South Glastonbury, Connecticut, was sentenced in December 2006 to 33 months’ imprisonment and forfeited $3,000.
Dr.Mario DIAZ, 58, from Delray Beach, Florida, was sentenced in November 2006 to 30 months’ imprisonment and ordered to forfeit $272,061.
Dr. Carlos BARRERA , 58, from Miami, Florida, was sentenced in April 2006 to 6 months’ home confinement and 3 years’ probation and forfeited $10,897.
Dr. Magaly BETHENCOURT , 59, from Miami, Florida, was sentenced in April 2006 to 6 months’ home confinement and 2 years’ probation and forfeited $7,710.
Dr. Apryl MCNEIL , 47, from New York, New York, was sentenced in April 2006 to 20 months’ imprisonment and forfeited $26,960.
Dr. Absylom NYAMEKYE , 41, from New York, New York, was sentenced in April 2006 to 20 months’ imprisonment and forfeited $36,286.
MEDICAL WEB SERVICES pled guilty in May 2009 to conspiring to illegally distribute prescription controlled substances. The now-defunct corporation forfeited $459,114.81 in proceeds from its illegal operation, and a sentencing hearing has not yet been set. The owners of MWS also forfeited a total of $526,343.98.
One of the men who recruited physicians on MWS’s behalf pled guilty to the illegal distribution of controlled substances. Iric SPEARS, 44, from Polk City, Florida, pled guilty in March 2009 and was ordered to forfeit $37,698.47. A sentencing hearing has not yet been set.
Eleven physicians employed by MWS pled guilty and were sentenced for conspiring to illegally distribute prescription controlled substances. Each physician was also ordered to forfeit the money received from MWS.
Dr. Stephen ANCIER , 51, from Montclair, New Jersey, pled guilty in April 2009 and was ordered to forfeit $465,955. A sentencing hearing has not yet been set.
Dr. David BARON , 63, from San Pedro, California, also pled guilty in April 2009 and was ordered to forfeit $65,992. A sentencing hearing has not yet been set.
Dr. Alexis Roman TORRES , 53, from Adjuntas, Puerto Rico, pled guilty in January 2009 and was ordered to forfeit $134,139. A sentencing hearing has not yet been set.
Dr. Ranvir AHLAWAT , 44, from Toms River, New Jersey, pled guilty in April and was ordered to forfeit $352,814. A sentencing hearing has not yet been set.
Dr. Blanca PLAZA , 38, from Adjuntas, Puerto Rico, was sentenced in March 2009 to 5 months’ imprisonment, 5 months’ probation, and 400 hours of community service.
Dr. Steven KLINMAN , 60, from Elkins Park, Pennsylvania, was sentenced in April 2008 to 4 years’ probation and forfeited $372,110.
Dr. Rene GUERRA , 45, from Miami Lakes, Florida, was sentenced in April 2007 to 18 months’ imprisonment and forfeited $6,000.
Dr. Jose CRESPIN , 54, from Surfside, Florida, was sentenced in February 2007 to 7 months’ imprisonment and forfeited $75,398.
Dr. Michael MILLETTE , 48, from Crystal Lake, Illinois, was sentenced in January 2007 to 41 months’ imprisonment and ordered to forfeit $1.6 million.
Dr. Juan Oscar GONZALEZ , 52, from Guaynabo, Puerto Rico, was sentenced in October 2006 to 2 years’ probation and forfeited $5,000.
Dr. Edward SCHWAB , 74, from Keithville, Louisiana, was sentenced in September 2006 to 22 months’ imprisonment and forfeited $200,000.
Former Union Family Pharmacist Douglas BOUCHEY, 55, now from Mt. Pleasant, Michigan, pled guilty to conspiring to misbrand prescription controlled substances. He was sentenced in January 2009 to 6 months’ probation and forfeited $29,209.
This case was prosecuted by Assistant United States Attorneys Stephanie M. Rose, Patrick J. Reinert, and Matthew J. Cole, and the asset forfeiture work was handled by AUSA Marty McLaughlin and Paralegal Specialist Brenda Nietert. The case was investigated as part of the Organized Crime Drug Enforcement Task Force program of the United States Department of Justice through the cooperative efforts of the: