FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
SEPTEMBER 21, 2007
FOR IMMEDIATE RELEASE
PHARMACY OWNERS CHARGED FOR ILLEGALLY SELLING 10 MILLION HYDROCODONE PILLS OVER THE INTERNET, LAUNDERING $20 MILLION IN PROCEEDS AND FAILING TO PAY TAXES
Superseding Indictment Seeks Forfeiture of $20 Million, Property of Pharmacy Businesses, Residences and Vehicles;
U.S. Attorney Warns that Abuse of Prescription Drugs Can Cause Addiction, Injury or Death
Baltimore, Maryland – A federal judge in Maryland today unsealed a grand jury indictment charging Steven Abiodun Sodipo, age 51, of Forest Hill, Maryland and Callixtus Onigbo Nwaehiri, age 49, of Jarrettsville, Maryland with illegally selling 9,936,075 pills or dosage units of hydrocodone over the Internet, engaging in a continuing criminal enterprise, engaging in monetary transactions using the proceeds of the illegal drug sales, filing false tax returns and conspiracy to defraud the IRS, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Ahmed Alhaji Abdulrazaaq, age 49, of Forest Hill, Maryland was also charged in the conspiracy to defraud the IRS.
United States Attorney Rod J. Rosenstein said, “Prescription drug abuse is a growing crisis in Maryland and throughout the nation, and it is one of our most important drug enforcement challenges. Many people wrongly assume that prescription drugs are safe. The truth is that using any drugs without proper medical supervision can result in addiction, injury or death.”
“This on-going investigation sends an instant message to ‘cybercriminals’ that the Internet is not their safe house,” stated Carl J. Kotowski, Assistant Special Agent in Charge of the Drug Enforcement Administration, Baltimore District Office. “Whether the battle is on the street or on the Web, the outcome remains the same: DEA along with the combined efforts of law enforcement agencies in an investigation of this magnitude produced a formidable force against narcotics trafficking and money laundering. Individuals and businesses utilizing the Internet to sell pharmaceuticals are bound by the same laws and regulations that apply to the corner drug store,” according to Kotowski.
The indictment was returned on September 19, 2007, and unsealed today. An earlier indictment charged Sodipo and Nwaehiri with conspiracy to distribute hydrocodone and launder money.
According to the 15 count superseding indictment, Sodipo and Nwaehiri owned and operated NewCare Home Health Services, Inc., which did business under the name of NewCare Pharmacy. NewCare was authorized to serve long term care facilities and nursing homes, but not the general public. Hydrocodone is an addictive prescription painkiller and typically, a limited number of pills is used to combat acute, severe pain over a short period of time.
Count one of the superseding indictment alleges that beginning no later than sometime in 2004 to October 10, 2006, Sopido and Nwaehiri joined a nationwide conspiracy to illegally sell hydrocodone through the Internet to any customer with a valid credit card. The defendants allegedly knew that: doctors who issued the “prescriptions” were not licensed to practice medicine in all the states where their out-of-state customers were located; of the 36 doctors issuing “prescriptions” through NewCare, 11 doctors issued in excess of 98% of all the hydrocodone prescribed; and hydrocodone accounted for about 88% of all “prescriptions” filled by NewCare which total 9,936,075 pills.
Moreover, Sodipo and Nwaehiri are alleged to have continued to sell vast quantities of hydrocodone knowing that some of their customers were addicts. In 2005, Newcare purchased about 4.2 million dosage units, when the national average was 84,332 units per pharmacy. From January 1 to October 10, 2006, NewCare purchased about 6.1 million dosage units, when the national average was 71,632 units per pharmacy.
The indictment alleges that two of NewCare’s customers died as a result of a multiple drug overdose, which included hydrocodone obtained through this illegal operation. One of deceased customers was from Bel Air, Maryland.
Sodipo is charged with two counts, and Nwaehiri with one count, of engaging in monetary transactions with criminally derived proceeds from the illegal sale of hydrocodone, arising from their deposit of checks into a NewCare bank account.
The superseding indictment alleges that Ahmed Abdulrazaaq was the director of accounting of NewCare. From 2004 through July 18, 2006, Sodipo, Nwaehiri and Abdulrazaaq conspired to defraud the IRS by avoiding payment of taxes on their salaries and income. Count 13 alleges that the three defendants paid themselves, other corporate officers, department heads and supervisors at NewCare as independent contractors, and not as salaried employees, thereby causing NewCare not to withhold individual income, social security and medicare taxes. In addition, the defendants allegedly filed false corporate and employer’s quarterly tax returns for 2004 and 2005, which did not report the salaries of the defendants and other top employees at NewCare, and fraudulently deducted their salaries as “subcontract fees” of NewCare. The indictment further alleges that Sodipo and Nwaehiri filed false individual tax returns in 2005, stating that they had not received any wages, when Sodipo had received at least $54,840, and Nwaehiri at least $55,440, in taxable income.
The superseding indictment seeks forfeiture of $20 million, the amount of gross proceeds derived from the illegal sale of over nine million dosage units of hydrocodone from January 2005 to October 2006. The indictment also seeks forfeiture of NewCare property located at 3423-25 Sinclair Lane, Baltimore as well as the contents of the businesses; and the homes, bank accounts and motor vehicles of defendants Sodipo and Nwaehiri.
Sodipo and Nwaehiri face a maximum sentence of five years in prison for the drug conspiracy and for each of the six counts of the illegal sale of hydrocodone; five years in prison for filing false tax returns; 10 years in prison for engaging in money transactions with proceeds of illegal drug sales; 20 years for conspiracy to launder money; and a minimum sentence of 20 years in prison and a maximum sentence of life in prison for engaging in a continuing criminal enterprise. All three defendants face a maximum sentence of five years for conspiracy to defraud the IRS.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the Drug Enforcement Administration, Internal Revenue Service Criminal Investigation Division, Department of Health and Human Services Office of Inspector General, and Food and Drug Administration Office of Criminal Investigations, for their work on the investigation. Mr. Rosenstein also thanked the Baltimore City Police Department, Baltimore County Police Department, Harford County Sheriff’s Office, Maryland Department of Drug Control and State of Maryland Pharmacy Board for their assistance, and commended Assistant U.S. Attorneys Andrea Smith and Paul Budlow, who are prosecuting the case.