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.
