US v. Rubin et al.

Food & Drug Administration (FDA) (CLOSED)

Most Recent Update 10/02 (See end of document)

Update 6/8/01:

United States v. Martin Paul Rubin and Lee Lukson, 2:00-CR-818 (C.D. Cal.); United States v. Ronald Shaffer, No. 2:00-CR-859 (C.D. Cal.); United States v. Arthur Michelson, No. 2:00-CR-857 (C.D. Cal.); United States v. David Villegas, No. 2:00-CR-858 (C.D. Cal.)

Defendants Martin Rubin, Ronald Shaffer, Arthur Michelson, Lee Lukson, and David Villegas each pled guilty to either mail fraud and/or wire fraud charges, 18 U.S.C. §§ 1341 and 1343, on March 26, 2001, October 23, 2001, October 23, 2001, March 5, 2001, and October 24, 2001, respectively. The companies the defendants used to commit the fraud included Armco Medical Supply, Inc., of Newbury Park and Agoura Hills, California; Arizona Health and Medical Specialties, Inc., of Phoenix, Arizona; Blue Skies Medical Supply, Inc., of Albuquerque, New Mexico; Queens Pharmacy of Alhambra, California; and Arjay Associates of Fort Collins, Colorado. Through these distribution companies, according to the pleas entered in the case, the defendants obtained reduced-price pharmaceuticals from manufacturers by telling the manufacturers that the drugs would be sold to institutions that qualified for the lower prices. It is a general practice in the pharmaceutical industry to office lower prices to institutions such as nursing homes, oncology centers and AIDS clinics. The defendants then resold these lower-cost products for a profit to distributors who would then sell the drugs in the retail market. A Press Release was issued on September 8, 2000, announcing the indictment of Rubin and Lukson.

The sentencing hearings for all of the defendants will be held on July 23, 2001, 10:00 a.m., at the United States Courthouse, 312 North Spring Street, Los Angeles, California.

Update 9/24/01:

All defendants have now been sentenced. The lead defendant, Martin Rubin, was sentenced to 5 years imprisonment and ordered to pay over $8 million in restitution. The other defendants have also been sentenced to lesser penalties.

Update 12/01:

No change in status.

Update 3/02:

No change in status.

Update 6/02:

No change in status.

10/02 Update:

No change in status.