Follow-Up Review of the Drug Enforcement Administrationís Efforts
to Control the Diversion of Controlled Pharmaceuticals
Evaluations and Inspections Report I-2006-004
Office of the Inspector General
The U.S. Department of Justice’s (Department) Drug Enforcement Administration (DEA) is the primary agency for enforcing the provisions of the Controlled Substances Act of 1970 that pertain to the diversion of controlled pharmaceuticals, such as narcotics, stimulants, and depressants, and regulated chemicals, such as ephedrine. The DEA’s diversion control program seeks to prevent, detect, and investigate the redirection of controlled pharmaceuticals from legitimate channels, while ensuring an adequate, uninterrupted supply to meet legitimate needs. Controlled pharmaceuticals can be diverted from legitimate channels through theft or fraud during the manufacturing and distribution process, and can be diverted by anyone involved in the process, including medical staff, pharmacy staff, and individuals involved in selling or using pharmaceuticals. Diversion schemes include physicians selling prescriptions, individuals obtaining and using controlled pharmaceuticals without a documented medical need, and drug traffickers illegally selling pharmaceuticals on the Internet without requiring prescriptions.
Diversion of controlled pharmaceuticals has dramatically increased in recent years, and research on drug usage reflects the growth of the problem. According to a 2005 report from the National Center on Addiction and Substance Abuse (CASA), the number of people who admitted abusing controlled prescription drugs increased by 94 percent over a 10-year period, from 7.8 million in 1992 to 15.1 million in 2003.1 This rate of increase was seven times faster than the increase in the U.S. population for that same period. Further, the 2004 National Survey on Drug Use and Health reported that 2.4 million people used prescription pain relievers non-medically for the first time within 12 months of the survey – the largest number of new users for any type of illicitly used drug.2
The increase in the diversion of controlled pharmaceuticals has coincided with the emergence of the Internet as a significant source for diverted pharmaceuticals. Hundreds of Internet pharmacies have been established through which large amounts of pharmaceuticals can be easily purchased with a credit card and without a prescription. According to one estimate cited in the 2005 CASA report, the number of Internet pharmacies in operation had reached as many as 1,400 at one time. In addition, an April 2005 study by comScore Networks reported that 17.4 million people visited online pharmacies in the fourth quarter of 2004, an increase of 14 percent from the previous quarter.3 Sixty-three percent of these Internet pharmacies did not require a prescription to obtain controlled substances. Furthermore, the head of the DEA’s Miami field division underscored the problem of pharmaceutical sales over the Internet in congressional testimony in 2004, stating, “ And perhaps of the greatest concern, the Internet has become a virtual wild west bazaar for ‘spam’ emails and website advertisements that sell controlled substances with little or no oversight.”4
The Office of the Inspector General (OIG) conducted this follow-up review to assess the DEA’s actions to control pharmaceutical diversion since our previous review in October 2002.5 As in our previous review, this review does not examine the DEA diversion control program’s regulatory activities, or its efforts to prevent the diversion of regulated chemicals. In 2002, we found that despite the widespread problem of controlled pharmaceutical diversion and abuse, the DEA had been slow to commit sufficient resources to address the problem. According to interviews with DEA personnel cited in our 2002 report, DEA special agents spent only 3 percent of their total work hours on diversion investigations. In addition, we found that because DEA diversion investigators lacked law enforcement authority, the lack of special agent assistance negatively affected the quality and timeliness of diversion investigations.6 In addition, we found that the DEA had not resolved the question of the law enforcement authority for diversion investigators, provided minimal intelligence support to diversion investigators and did not provide specialized training for special agents in diversion investigations.
We made four recommendations in our 2002 review, and the DEA concurred with them. We recommended that the DEA:
In our current review, we examined (1) the actions taken by the DEA to control the diversion of pharmaceuticals since our 2002 review, (2) the current amount of law enforcement and intelligence assistance the DEA provided for its diversion investigations, and (3) the DEA’s response to the growing problem of Internet diversion. To investigate these issues, we interviewed the DEA Administrator and Deputy Administrator, and other personnel at DEA headquarters and in 13 DEA field offices, analyzed data from 7 DEA databases, and reviewed a variety of DEA documents. We also surveyed the group supervisors of the DEA’s 68 domestic diversion groups regarding the organization of their groups, the law enforcement and intelligence support they received, the types of investigations they initiated, and their training.
RESULTS IN BRIEF
Since our 2002 review, we found that the DEA has taken important steps to improve its ability to control the diversion of controlled pharmaceuticals, especially pharmaceutical diversion using the Internet. However, several shortcomings in the DEA’s diversion control efforts that we identified and reported on in 2002 still exist.
On the positive side, the DEA has added diversion control as a strategic goal in its strategic plan for fiscal years (FY) 2003 – 2008, reorganized its Operations Division to include law enforcement operations for diversion control, and provided additional intelligence resources to diversion investigators. Further, it increased the number of criminal diversion investigations initiated from 770 in FY 2002 to 950 in FY 2005 and the number of authorized domestic diversion investigators by 75 positions from 512 in FY 2004 to 587 in FY 2005. In addition, in FY 2005 the DEA established the first performance measures for its diversion control program.7
Moreover, since 2002 the DEA has taken a series of actions to control the increasing use of the Internet to divert pharmaceuticals. From FY 2002 to FY 2005, the DEA increased the percentage of time that diversion investigators spent investigating Internet diversion cases from 3 percent to 11 percent. The DEA also developed an operational strategy for Internet investigations that has been used successfully on several large pharmaceutical diversion investigations.
Despite these positive actions, we identified several continuing concerns. We found that although the need for special agent assistance in diversion investigations had increased significantly since our previous review, the time spent by special agents assisting diversion investigations still constitutes a small share of their total investigative effort.8 In addition, we found that the DEA still had not resolved the complicated issue of providing law enforcement authority for its diversion investigators, although it is actively pursuing the matter. Further, we found that few DEA special agents have received diversion control training beyond the 2-hour module provided during basic agent training. In addition, the support provided by intelligence analysts to diversion groups in the field has continued to be limited, and intelligence analysts still received minimal diversion control training.
With respect to the DEA’s Internet efforts, we examined several of the intelligence, technological, and investigative tools that are part of the DEA's operational strategy, including the Online Investigations Project (OIP), telephone and online hotlines, undercover equipment, and training in conducting Internet diversion investigations. We found that the OIP, under development since 2001, has become a valuable investigative tool even though it cannot automatically identify web sites with the highest volume of suspect pharmaceutical sales as originally intended. In addition, since 2002 the DEA has established telephone and online hotlines for reporting suspicious Internet pharmacies. However, these hotlines have yielded few leads that resulted in diversion investigations. Further, while the DEA has started to provide undercover equipment to its diversion groups, as of May 2006 most diversion groups still did not have this equipment. And while over half of the 482 diversion investigators have received training in Internet investigations, most have not received the types of specialized training that diversion investigators said would prove useful for conducting Internet investigations.
We now discuss in more detail the DEA improvements in its pharmaceutical diversion control efforts as well as continuing areas of concern.
Improvements in the DEA’s Diversion Control Program
The DEA has taken important steps to help prevent the diversion of controlled pharmaceuticals since our last review. For example, the DEA made diversion control a strategic goal in its strategic plan for FY 2003 – 2008. In addition, DEA leaders have expressed the importance of the agency’s diversion control efforts. For example, the DEA Administrator emphasized the importance of diversion control in a January 2004 cable to all field divisions, stating that “stopping the abuse and diversion of pharmaceutical controlled substances must be a DEA and Department of Justice priority.” The DEA also reorganized its headquarters Operations Division in the fall of 2004 so that all criminal enforcement activities, including those for diversion control, were centralized in one unit, which according to one DEA official gave more visibility and importance to criminal diversion investigations.9
In 2002, we recommended that the DEA increase the investigative resources devoted to controlling pharmaceutical diversion. In response, the DEA added 75 diversion investigator positions in FY 2004, raising the number of authorized diversion investigator positions in the DEA’s domestic field divisions by 15 percent. Further, in FY 2006 the DEA received 41 additional intelligence positions and 23 special agent positions that it intends to dedicate to diversion control.
The DEA also provided diversion investigators with additional intelligence resources, including a new searchable analytical database and a new unit at DEA headquarters dedicated to supporting investigations that involve Internet-based communications. Further, the DEA has made the Automation of Reports and Consolidated Orders System (ARCOS) database, which tracks Schedule II controlled substances from point of manufacture to retail locations, more timely and accessible to diversion investigators.10
Between FY 2002 and FY 2005 the DEA increased the number of criminal diversion investigations it initiated from 770 to 950, an increase of approximately 23 percent. The DEA’s formal diversion control performance measures, established in FY 2005, showed that the number of drug diversion organizations disrupted increased from 454 to 474 and the number of diversion drug organizations dismantled increased from 474 to 594.11
Diversion of Controlled Pharmaceuticals Using the Internet
Since 2002, diversion of controlled pharmaceuticals using the Internet has increased dramatically, and the DEA has increased the percentage of diversion investigators’ time applied to Internet diversion investigations from 3 percent in FY 2002 to 11 percent in FY 2005. In 2004, the DEA developed an operational strategy for Internet-based diversion investigations that according to the DEA’s Deputy Administrator has been used successfully in several large DEA-led operations.12 Although no DEA personnel specifically mentioned the Internet strategy to us during our field work, DEA headquarters managers informed us that they had presented the strategy to field managers during 2005 through a PowerPoint presentation. DEA management stated that while field personnel might not have been aware of the term “Internet strategy,” many had used the intelligence tools and technology that are a part of it.
We also examined the key intelligence, technological, and investigative tools that are a part of the DEA’s Internet strategy. Our review found that the Online Investigations Project (OIP), while considered by the DEA to be implemented and a viable investigative tool, does not operate as originally intended because it cannot automatically identify web sites with the highest volume of suspect pharmaceutical sales.13 While the OIP is not able to proactively identify the Internet pharmacies receiving the most orders so that investigations can be prioritized, the DEA reported that analysts are using it to efficiently synthesize large amounts of information about web sites that are already under investigation.
According to DEA managers, the OIP scans information that is publicly available on the Internet to find connections between web sites under investigation and pertinent information such as addresses, phone numbers, e-mail addresses, and other web sites. DEA analysts then transfer the OIP’s search results to charts that display these connections and provide the charts to field investigators to assist in their investigations.
Further, in our current review we found that most diversion investigators did not have undercover credit cards that would allow them to establish undercover identities that could not be traced to the DEA, a tool often necessary for conducting Internet investigations. DEA managers stated that they were aware of this problem and had conducted a pilot undercover credit card program for diversion investigations in three field divisions during the fall of 2005. DEA managers said that this pilot program was successful and that by June 2006 each DEA field division will have three to five undercover credit cards to be used exclusively for purchasing pharmaceuticals over the Internet.14
DEA managers also informed us that the DEA has begun establishing a virtual private network that will link its undercover computers in each DEA field division to DEA headquarters. They stated that the virtual private network has already been implemented in the Atlanta, Phoenix, Los Angeles, and Miami field divisions.
Finally, over half of the 482 diversion investigators on board in FY 2005 and assigned to domestic divisions had attended the DEA’s 3-day Internet Telecommunications Exploitation training. However, only 7 percent had attended the DEA training on financial investigations and conspiracy and complex investigations.15 Diversion investigators told us that training in these areas was crucial for Internet diversion investigations because Internet operations often are dispersed geographically and because the anonymity of the Internet allows businesses to easily hide their identity and financial transactions. DEA managers stated that training resources are limited and that providing Internet Telecommunications Exploitation training to diversion investigators is a DEA priority over other training courses.
Continuing Concerns in the DEA’s Diversion Control Program
Despite the positive steps that the DEA has taken to help prevent the diversion of controlled pharmaceuticals since 2002, we identified several continuing concerns about the DEA’s diversion control program. These concerns are related to inadequate special agent support for diversion investigations, slow resolution on the issue of providing law enforcement authority to diversion investigators, additional need for intelligence analyst support, and the need for additional training for special agents and intelligence analysts in pharmaceutical diversion investigations.
Special Agent Support
We found that even though DEA special agent assistance to diversion investigations has increased since 2002, it has remained a small part of special agents’ investigative efforts. To assess the amount of special agent support for diversion investigations since 2002, we considered five sources of evidence: analysis of work hour data related to special agent time spent on diversion investigations; analysis of work hour data related to special agent time spent on pharmaceutical investigations;16 interviews of DEA personnel; DEA Pharmaceutical Threat Assessments;17 and OIG survey responses of diversion group supervisors.
Both work hour data analyses indicated that while the time that special agents spent on diversion control increased after our 2002 review, it still represented a small amount of special agents’ investigative time. Between FY 2002 and FY 2005, the DEA increased the number of work years that special agents spent on diversion investigations from 14.8 to 27.4 work years, an increase of 85 percent. Even with this increase, the actual percentage of special agent time spent on diversion investigations increased from 0.6 percent to 1.0 percent of their total investigative time between FY 2002 and FY 2005. That is, DEA special agents collectively spent 1 percent of their total investigative efforts on diversion investigations in FY 2005.
We also found that between FY 2003 and FY 2005 special agents increased the number of work years spent on pharmaceutical investigations from 26.8 to 57.4 work years, an increase of 114 percent. However, this still accounted for only 1.2 percent of the special agents’ total investigative time in FY 2003 and 2.2 percent in FY 2005. That is, DEA special agents collectively spent approximately 2 percent of their total investigative efforts on pharmaceutical investigations in FY 2005.
Although the investigative time that special agents spent on diversion investigations constitutes a small part of their total investigative efforts, we found instances of the DEA providing significant special agent support to some diversion investigations. For example, in FY 2005 four large diversion operations accounted for 22 percent of all special agent work hours on criminal diversion pharmaceutical investigations.
The DEA has recognized the importance of providing special agent support to diversion investigators for several years. On August 3, 2001, the DEA’s Chief of Operations directed field divisions to assign two special agents to each diversion group in every division office. The DEA’s plans were delayed when, after the September 11, 2001, terrorist attacks, many federal law enforcement agents, including DEA agents, were assigned to assist the Federal Bureau of Investigation on various counterterrorism task forces. However, almost 5 years after the Chief of Operations directive, we found that only 6 of the DEA’s 27 diversion groups located in field offices had at least 1 special agent position authorized to assist with diversion investigations.18
Some DEA diversion personnel told the OIG that the lack of assistance from special agents to perform law enforcement functions, such as serving warrants and conducting surveillance, caused diversion investigations to be delayed. Other diversion investigators said that they did not pursue some investigative leads requiring law enforcement support because they assumed that they would not receive special agent assistance. Three-quarters of the 62 diversion group supervisors who responded to our survey stated that they had to rely on law enforcement support for their diversion investigations from state, local, or other federal law enforcement personnel rather than from DEA special agents.
During our review, we also found instances in which diversion personnel were very satisfied with their working relationships with DEA special agents. This was the case primarily in field divisions that assigned special agents and diversion investigators to the same group or where the field division had been involved in a major diversion control operation.
Diversion Control Training for Special Agents
Our current review also found that during the past 3 years DEA special agents have received minimal diversion control training. In 2004, the DEA created a week-long Special Agent Diversion School. According to the DEA, as of April 2006 a total of 98 special agents had attended the school.19 DEA officials stated that they intend eventually to send all special agents who assist with diversion investigations to this school; however, according to DEA officials, no additional sessions of this training will be conducted in FY 2006. Currently, the only diversion training that all DEA special agents receive is a 2‑hour session included in basic agent training that consists of a video produced in 1996 and a general overview of the DEA’s diversion control program.20
Enforcement Authority for Diversion Investigators
In 2002, we found that the DEA had failed to resolve the question of whether diversion investigators should receive law enforcement authority, and we recommended that the DEA clarify diversion investigator’s roles, responsibilities, and law enforcement authority. We found that since our 2002 review the DEA has taken actions to reclassify the diversion investigator position to one with law enforcement authority, but that conversion has not yet been accomplished.
In January 2003, the DEA submitted an initial proposal to the Department to reclassify its diversion investigators from a non-law enforcement job series to a criminal investigative job series with law enforcement authority. DEA officials informed us that throughout 2004 and 2005 they pursued this effort by meeting regularly with Department officials who had to review and approve the proposal. In September 2005, the DEA submitted a final proposal to reclassify diversion investigators to a new position that would give them law enforcement authority and allow them to conduct criminal investigations. However, as of June 1, 2006, the Department, the Office of Personnel Management, and the Office of Management and Budget have yet to approve the request.
In addition to obtaining approval, reclassifying DEA diversion investigators to law enforcement officers will also require an increase in the Diversion Control Fee Account.21 Even if the DEA’s conversion proposal is approved and funded, DEA officials estimate that it will take an additional 18 months to recruit, hire, and train new personnel and 9 months to reclassify, train, and assign eligible current diversion investigators. Therefore, despite the DEA’s efforts, diversion investigators are not likely to receive law enforcement authority anytime soon. We believe that until the DEA receives approval and fully implements this initiative, it needs to ensure that its diversion investigators receive sufficient special agent support.
Intelligence Analyst Assistance
Since our 2002 review, the DEA has increased the amount of intelligence resources (such as searchable analytical databases) available to diversion investigators. However, we found that the assistance that intelligence analysts provide field investigators for diversion investigations has remained limited.
In 2002, we recommended that the DEA provide effective intelligence support to the diversion control program. We learned in both our previous and current reviews that assistance from intelligence analysts is particularly important in diversion control cases because of the increasingly complex nature of diversion investigations, especially diversion using the Internet. The DEA concurred with our recommendation, and over the past several years the amount of time intelligence analysts spent assisting diversion investigations increased by 143 percent, from 2.5 work years in FY 2002 to 6.0 work years in FY 2005. The amount of time that intelligence analysts spent assisting criminal pharmaceutical investigations increased from 3.4 work years in FY 2003 to 11.4 work years in FY 2005. Yet, despite this increase, overall intelligence analysts spent 1.7 percent of their total criminal investigative time on diversion investigations in FY 2003 and 5.3 percent in FY 2005.
Similar to special agent time spent on diversion cases, we found that the DEA provided significant intelligence support for several major diversion investigations. For example, in FY 2005 four large diversion operations accounted for 44 percent of all intelligence analyst work hours on criminal pharmaceutical investigations.
None of the 62 diversion groups that responded to our survey said they had a field intelligence analyst assigned to them, even though we found instances in which intelligence analysts were assigned to special agent enforcement groups investigating illicit drugs. As a result, diversion investigators told us they had to develop their own intelligence by gathering information from databases and other sources. Further, 55 percent of the survey respondents reported that the lack of intelligence support sometimes or often delayed investigations.
We spoke to DEA managers about diversion investigators’ perceived lack of intelligence support. They explained that previously, intelligence analysts were often assigned to, and provided support to, specific enforcement groups, which gave the enforcement groups direct access to intelligence support, whereas diversion groups, on the other hand, had indirect access. However, recently DEA field divisions have begun to provide intelligence support based on the priority of the investigation, regardless of whether the investigation involves illegal drugs or controlled pharmaceuticals.
Finally, we found that intelligence analysts received minimal training focusing on the diversion of pharmaceuticals. Currently, the only training that intelligence analysts receive in diversion control is a 2-hour module included in their basic training, which represents only 0.5 percent of the training hours for intelligence analysts.
CONCLUSION AND RECOMMENDATIONS
Since our last review, the DEA has taken important steps to improve its ability to control the diversion of controlled pharmaceuticals, including efforts to control diversion using the Internet. However, several shortcomings in the DEA’s diversion control program that we identified and reported in 2002 still exist today. On the positive side, the DEA has added diversion control as a strategic goal in its FY 2003 – 2008 strategic plan, reorganized its Operations Division to include law enforcement operations for diversion control, provided additional intelligence resources to investigators, and increased its authorized domestic diversion investigator positions by 15 percent from FY 2002 to FY 2005. The DEA also increased the number of criminal diversion investigations initiated by 23 percent since issuance of our 2002 report and established the first performance measures for the diversion control program in FY 2005. Finally, the DEA has increased the percentage of time diversion investigators spend investigating diversion using the Internet and developed an operational strategy for Internet investigations.
Overall, we found that the DEA had increased the amount of special agents’ time devoted to diversion control since our last review. Nonetheless, this still represents a very small percentage of special agent time, and the need for special agent assistance in diversion cases has increased. In addition, while 34 percent (1,699) of all DEA special agents have attended Internet training applicable to Internet diversion investigations, only 98 of 5,013 special agents have attended the DEA’s week-long course specifically addressing diversion. We also found that the DEA has not ensured that diversion investigators have the necessary tools and training to conduct successful investigations involving diversion using the Internet. Finally, with the growing threat of diversion using the Internet and the overall growth of pharmaceutical diversion in general, the need for intelligence analyst support for diversion control has increased. However, similar to what we found in our previous review, intelligence analyst assistance remains limited in the field and training for intelligence analysts is minimal.
We are making six recommendations to help the DEA improve its ability to address the growing problem of diversion of controlled pharmaceuticals.
We recommend that the DEA:
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