DEA Diversion Investigation Leads to $500000 Settlement in Internet Pharmacy Case
April 30 (Detroit, MI) – United States Attorney Barbara McQuade and U.S. Drug Enforcement Administration Special Agent-in-Charge Robert L. Corso today announced a settlement between the government and The Prescription Shop, The Prescription Shop II, and Thomas Kundrat, that resolves allegations that they violated the Controlled Substances Act (CSA).
It is alleged that violations occurred by dispensing controlled substances on prescriptions issued outside the ordinary course of medical practice through several internet sites. The settlement calls for the payment of $400,000 to the government over the next three months, and the government has agreed to suspend payment of the final $100,000 for meeting future compliance requirements by Wenk’s Pharmacy, an Ann Arbor pharmacy owned by Eileen Kundrat.
The Kundrat Corporation, d/b/a The Prescription Shop operated a pharmacy at 423 East Washington, Ann Arbor, Michigan 48104, and The Prescription Shop II at 2140 Ellsworth Road, Ann Arbor, Michigan 48108. Both pharmacies have ceased operations.
The United States alleged that these pharmacies dispensed hydrocodone through the mail to customers across the United States as part of an internet operated pharmacy scheme based in the Orlando and Tampa, Florida areas.
The leaders of the internet operations were Barry Robert Brooks and Dr. Juan Ibanez, both indicted in 2007 in the Middle District of Florida. Ibanez has pled guilty to conspiracy to distribute and dispense hydrocodone.
The Brooks/Ibanez Organization sold controlled substances to customers through several internet pharmacy businesses and websites. Customers on the website where not required to have a prescription before ordering the controlled substances. Instead, customers completed an online questionnaire and paid for the drugs with a credit card.
The Brooks/Ibanez Organization had agreements with several physicians located throughout the United States to authorize the issuance of the drug orders over the internet. These physicians did not examine the customer and since no bona fide doctor/patient relationship existed they prescribed the controlled substances outside the usual course of professional practice. The CSA applies not only to physicians but its obligations extend to pharmacists filling the prescriptions as well.
These orders for hydrocodone were forwarded directly to the Prescription Shop and the Prescription Shop II via the internet and shipped to the internet customers in 45 states. Between October 2, 2006 and May 26, 2007, The Prescription Shop and The Prescription Shop II together filled over 17,000 prescriptions of hydrocodone based on these internet sales.
The matter was settled without the filing of lawsuit, during pre-filing negotiations. Contemporaneously with this settlement, Wenks Pharmacy resolved an administrative complaint with the DEA. The case was investigated by DEA-Detroit’s Diversion Section.