A South Florida man, William D. Rodriguez, has been sentenced to serve 120 months in prison in connection with a multi-million dollar prescription drug diversion and money-laundering scheme, the Justice Department announced today. U.S. Judge Donald L. Graham of the Southern District of Florida also ordered that Rodriguez serve two years of supervised release after completion of his prison sentence.
In June, Rodriguez pleaded guilty to conspiring with Altec Medical Inc. to defraud the U.S. Food and Drug Administration (FDA) in a scheme involving the resale of prescription drugs that had been diverted from lawful channels of distribution and resold to Altec by two companies controlled by Rodriguez. Rodriguez also pleaded guilty to a separate conspiracy charge involving the laundering of proceeds of the diversion scheme.
“Drug diversion” refers to various ways in which prescription drugs are removed from lawful channels of distribution and then reintroduced into the marketplace for sale to consumers.
In a document submitted to the court at the time of his guilty plea, Rodriguez admitted that all of the drugs sold to Altec had been obtained from unlicensed, illegal drug distributors. Rodriguez advised the court that the drugs were often obtained from street-level transactions in Miami, including those where individuals sold their medications for money. In other instances, Rodriguez told the court that the drugs had been obtained from cargo thefts.
Rodriguez further admitted the conspirators created drug “pedigrees” that falsely said that the drugs had been obtained from legitimate sources, such as drug manufacturers or their authorized distributors. Pedigrees are records of wholesale drug transactions and must reflect all prior sales or distributions of the drugs. Rodriguez also admitted to conspiring to launder proceeds of the diversion scheme by cashing numerous checks over $10,000. On Aug. 20, 2012, the court ordered Rodriguez to forfeit $55 million, representing the proceeds of the scheme.
“Drug diversion is a serious crime that puts consumers at risk,” noted Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division. “Drugs diverted from the lawful channels of distribution may not have been properly handled and stored, which means they could have been contaminated, had their mechanisms of action altered, or they could be expired. Drug Diversion undermines the safety and effectiveness of our prescription drug system, and we will continue to prosecute those who engage in it.”
The Justice Department advises consumers who have concerns about a drug to check the lot numbers on the manufacturer’s web site to see if there are any warnings about it. Use of diverted drugs can cause unpredictable adverse side effects and may fail to treat the condition for which a consumer is taking the drugs.
On Aug. 10, 2012, Altec pleaded guilty to the diversion scheme, was fined $2 million, and was ordered to forfeit $1 million.
The cases involving Rodriguez, Altec and Torres were investigated by the FDA’s Office of Criminal Investigations. The cases were prosecuted by Assistant U.S. Attorney Jon M. Juenger of the U.S. Attorney’s Office for the Southern District of Florida, and David A. Frank of the Justice Department’s Consumer Protection Branch. Additional assistance was provided by Joshua Eizen of the FDA’s Office of Chief Counsel for Enforcement.