Edmonds Pharmacist Sentenced to Prison
MAR 3 --(Seattle) – DEA Special Agent in Charge (SAC) Arnold R. Moorin and the United States Attorney for the Western District of Washington, Jeffrey Sullivan, announced that on February 27, 2009, Milton W. Cheung, was sentenced in U.S District Court to 15 months in prison, one year supervised release, and a $10,000 fine for acquiring controlled substances by deception, and misbranding drugs.
During 2007, and continuing through September 2008, Cheung solicited a number of Washington State medical providers, including doctors, hospices, and clinics, as well as Top Food Drug Store customers, to provide expired and unexpired drugs to him at the Edmonds Top Food Drug Store, on the alleged basis that he would provide these drugs to less developed countries as part of a philanthropic mission. While Cheung collected these drugs, he purposefully diverted much of the drugs collected by placing the drugs into the regular supply bottles at the Top Food Drug Store. This gave him a much larger inventory of drugs to distribute to pharmacy customers and made the pharmacy which he managed appear more profitable. Cheung then proceeded to distribute these returned drugs to customers at the Edmonds Top Food Drug Store when filling new customer prescriptions, even though a large portion of these drugs were expired, and despite the fact that all of the drugs had been adulterated in that they had already been distributed to and possessed by others, and were returned merchandise which Cheung was doling out as new inventory. Among the drugs deceptively collected by Cheung and later distributed by him, were such Schedule II through IV controlled substances as fentanyl, methadone, morphine, oxycodone, hydrocodone, and lorazapam, in addition to other drugs.
At the time of his guilty plea, Cheung admitted to stealing money from Top Food Drugs in a variety of ways, including pocketing cash from co-payments provided by customers, by processing phony merchandise returns from customers and pocketing the cash supposedly refunded to customers, and by purchasing and cashing gift cards to which he was not entitled.
In a related matter, a continuing investigation of the business practices at the Edmonds Top Food location revealed inadequacies in the record keeping system at the pharmacy, and the failure by the pharmacy to have sufficient controls in place to prevent the unlawful diversion of controlled substances. These inadequacies allowed Cheung to continue his criminal activities over a period of several months without being detected. All pharmacies are required by law to maintain adequate record keeping systems and to have sufficient controls in place to prevent unlawful drug diversion.
In February 2009, Haggen, Incorporated entered into a civil agreement with the United States Department of Justice, acknowledging its failure to maintain adequate records and safeguards against diversion. As a sanction for its conduct, Haggen agreed to pay the United States a fine of $425,000. In addition, Haggen agreed to immediately implement a compliance program designed to maintain adequate records to prevent the unlawful diversion of controlled substances. The DEA agreed to participate in employee instruction as part of that program.
This case was investigated by the Drug Enforcement Administration, Internal Revenue Service –Criminal Investigation, Food and Drug Administration and the Edmonds Police Department.