OFFICE OF THE UNITED STATES ATTORNEY
WESTERN DISTRICT OF MISSOURI
BRADLEY J. SCHLOZMAN
Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106
JANUARY 9, 2007
FOR IMMEDIATE RELEASE
FOUR DEFENDANTS ADDED TO COUNTERFEIT LIPITOR CONSPIRACY INDICTMENT
KANSAS CITY, Mo. – Bradley J. Schlozman, United States Attorney for the Western District of Missouri, announced today that four additional co-defendants have been indicted by a federal grand jury for their role in a multi-million dollar conspiracy to sell counterfeit, illegally imported and misbranded Lipitor and other drugs.
Gary Wayne Smith, 38, of Mobile, Ala., Salvatore A. Esposito, 48, of Staten Island, N.Y., Trang Doan Nguyen, 45, of Garden Grove, Calif., Philip R. Giannino, 61, of Frankfurt, Ill., William Alan McGee, 43, of Cordova, Tenn., and James Irland Hoyt Floyd, 43, of Harvest, Ala., were charged in a two-count second superseding indictment returned by a federal grand jury in Kansas City on Jan. 4, 2007. This indictment replaces a previous indictment against Smith and Esposito and adds Nguyen, Giannino, McGee and Floyd as new defendants.
Count One of the federal indictment alleges that all six of the co-defendants participated in a conspiracy to defraud the United States by obstructing the functions of the Food and Drug Administration to prevent the sale and distribution of drugs not approved for sale and distribution in the United States, to regulate the interstate sale and distribution of drugs within the United States, and to safeguard the health and safety of consumers who purchase drugs in the United States.
According to the indictment, each of the six co-defendants operated and/or were actively involved in several companies that bought and sold pharmaceutical drugs in the secondary wholesale market. Giannino is a licensed pharmacist.
The indictment alleges that one or more of the defendants bought counterfeit Lipitor tablets then sold them in the secondary wholesale market, and that one or more of the defendants repackaged the counterfeit Lipitor and re-sold it in the secondary wholesale market. The indictment also alleges that one or more of the defendants bought Pfizer-manufactured Lipitor tablets and Celebrex capsules not intended or approved for sale in the United States that had been illegally imported and smuggled into the United States and then sold the Lipitor and Celebrex in the secondary wholesale market, and that one or more of the defendants repackaged that Lipitor and Celebrex and re-sold it in the secondary wholesale market.
The indictment also alleges that one or more of the defendants bought prescription drugs from Medicaid patients, that one or more of the defendants bought and sold stolen prescription drugs, and that one or more of the defendants bought Lupron from physicians. In all of those cases, according to the indictment, the defendants disguised the source and origin of the drugs before selling them in the secondary wholesale market. One or more members of the conspiracy allegedly created pedigrees that concealed the source, origin, and authenticity of the prescription drugs.
Count Two of the federal indictment alleges that Smith and Esposito participated in a conspiracy to commit wire fraud. The indictment alleges a series of wire transfers in January 2002, ranging from $200,000 to $2.4 million, in furtherance of their scheme to fraudulently conceal and misrepresent the source, origin, and authenticity of the drugs they bought and sold in the secondary wholesale market.
Schlozman cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Senior Litigation Counsel Gene Porter. It was investigated by the Office of Criminal Investigations, U.S. Food and Drug Administration.
This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at