Three Individuals and International-pharmacy.com S.a. Charged with Operating Dozens of Illegal International Internet Pharmaceutical Websites
Defendants Used Internet Pharmacies to Dispense Controlled Substances to Customers Nationwide without a Medical Prescription or Evaluation Over 5 Million Illegal Pharmaceutical Pills Seized
ROSLYNN R. MAUSKOPF, United States Attorney for the Eastern District of New York, JOHN P. GILBRIDE, Special Agent-in-Charge, Drug Enforcement Administration, New York Field Division, and GEORGE F. MAGEE, Special Agent-in-Charge, Food and Drug Administration-Office of Criminal Investigation, New York Field Office, today announced the unsealing of an indictment against CORINNA MEHRER, DAVID ARMSTRONG, 1 The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. ELIZABETH ARMSTRONG, and INTERNATIONAL-PHARMACY.COM S.A. ("IP") of Costa Rica on multiple charges stemming from their operation of illegal international Internet websites to sell prescription drugs, such as Valium, Vicodin, Ritalin, and Xanax directly to the public nationwide without a medical evaluation or a prescription from a licensed physician.1 A search warrant executed yesterday at the distribution location controlled by the ARMSTRONGS led to the seizure of over 5 million illegal pharmaceutical pills.
All three defendants were arrested in New York and arraigned yesterday before United States Magistrate Judge Cheryl L. Pollak, at the U. S. Courthouse in Brooklyn, New York. The Court entered permanent orders of detention for all three defendants.
The investigation leading to the charges and arrests announced today was conducted by the DEA Long Island Office and the New York Drug Enforcement Task Force (comprised of investigators from DEA, the New York City Police Department, and the New York State Police) and the New York Field Office of the Food and Drug Administration-Office of Criminal Investigation, as part of Operation "Cyber Chase," a multi-jurisdictional, multiagency Organized Crime Drug Enforcement Task Force Priority Target Investigation. The operation focused on several major pharmaceutical drug traffickers who illegally distribute through the Internet potentially addictive and dangerous controlled substances worldwide directly to customers without a medical evaluation or prescription. These drugs pose the additional risk of being contaminated, counterfeit or adulterated, and are readily available to anyone with Internet access, including children.
According to government filings in the case announced today in the Eastern District of New York, IP controls and operates approximately 60 websites that illegally distribute prescription drugs to thousands of Americans weekly, grossing more than $5 million in profits over a 10-month period. IP's gross sales on just one day last month totaled nearly $40,000. The indictment charges that the proceeds of the pharmaceutical sales were laundered through seemingly legitimate businesses and by wire-transfers to domestic and off-shore bank accounts under the individual defendants' control.
MEHRER is charged with being a leader of the illegal drug distribution enterprise, directing the operation from Costa Rica. The ARMSTRONGS, who are husband and wife, were allegedly responsible for packaging and shipping pharmaceuticals from a warehouse in Queens, New York, to IP's customers as well as to customers of other Internet pharmaceutical websites located throughout the United States. The pharmaceuticals were illegally imported into the United States from India and other countries through the Bansal organization, which included Brij Bansal in India, and his son, Akhil Bansal, in Pennsylvania. The Bansals, and others, have been separately charged in the Eastern District of Pennsylvania.
The IP websites sold regulated pharmaceuticals, including dangerous and addictive drugs such as Valium, Xanax, Ambien and others, without requiring that the customer show a prescription from a doctor.2 From time to time, some of the websites seemingly attempted to mislead consumers into believing that a doctor would review their orders by including a picture of a doctor on the website and asking purchasers to complete an on-line questionnaire concerning their medical conditions. In fact, at no time did the defendants actually forward any completed questionnaires to medical doctors licensed to issue prescriptions in the United States. Other IP websites, however, made no such pretense of requiring a prescription, specifically advising customers that they were not required to send in a prescription. Further, although the websites advertised name-brand drugs, they often shipped generic drugs manufactured outside the United States that were not approved by the FDA, and charged much more for these generic drugs than the retail price of the corresponding name-brand drug.
In order to purchase pharmaceuticals, customers simply sent orders and credit card payments to IP. MEHRER and others ultimately forwarded the orders through the Bansal organization to the ARMSTRONGS in Queens, New York. Brij Bansal had access to vast quantities of foreign-manufactured generic drugs, which he regularly supplied to the ARMSTRONGS. The ARMSTRONGS completed the orders by packaging the drugs and sending them directly to IP's customers.
On April 12 and 13, 2005, law enforcement agents seized a total of 2,019 packages of pharmaceuticals -- approximately 155,120 pills -- that the ARMSTRONGS had attempted to ship from their warehouse in College Point, Queens, to customers across the United States. The drugs included generic versions of prescription brand-name drugs, such as Valium, Xanax, Ambien, Ativan, and Klonopin, as well as codeine phosphate, codeine sulfate, and librium. The agents also seized approximately 35 kilograms of other pharmaceuticals. Yesterday, agents executed a search warrant at the same location and seized approximately 5,600,000 pills of prescription drugs.
The ARMSTRONGS' recent shipping expenses reflect the magnitude of the defendants' drug distribution operation -- approximately $28,974 during the last week in December 2004, approximately $47,343 during the first week of January 2005, and nearly $215,125 for a five-week period beginning December 27, 2004. Overall, this illegal drug trafficking scheme yielded millions of dollars in profits that were routinely moved out of the United States to off-shore accounts and investments. Globally, law enforcement officials in the United States and abroad froze assets approaching approximately $6 million tied to these organizations.
According to publicly-filed documents in this case, IP, MEHRER and others also dealt with drug distributors abroad in addition to the Bansal organization. These distributors processed orders for IP and sent the orders directly to IP customers in the United States. In an effort to conceal the illegality of these shipments from the United States Customs and Border Protection ("CBP") inspectors at John F. Kennedy International Airport and prevent their seizure, MEHRER directed IP employees to forge prescription scripts to be included in the drug shipments arriving at JFK. Last week, CBP inspectors seized several drug shipments intended for IP customers containing the forged prescription script.
"We are committed to stopping criminals from using the Internet to peddle dangerous and addictive drugs without a medical doctor's prescription and to putting their website operators and distributors out of business," stated United States Attorney MAUSKOPF. "Together with our international network of law enforcement partners, we will continue to mobilize our resources against those who would seek to circumvent the rules established to protect consumers from dangerous drugs that require the supervision of a doctor for safe and effective use." Ms. MAUSKOPF thanked the New York City Police Department, the Internal Revenue Service, the Postal Inspection Service, the New York State Police, the New York Office of U. S. Immigration and Customs Enforcement, the JFK Mail Branch of U. S. Customs and Border Protection, and the Costa Rican government for their invaluable assistance and emphasized that the investigation is continuing.
DEA Special Agent-in-Charge GILBRIDE stated, "When the public purchases pharmaceuticals through online pharmacies operating illegally, they are in effect inviting drug traffickers into their homes. The DEA and its law enforcement partners are committed to investigating and bringing to justice drug trafficking organizations, whether it be on the streets of New York or in cyberspace."
If convicted, MEHRER faces a mandatory minimum of 20 years' imprisonment, and a maximum of life imprisonment, and a $2,000,000 fine. The ARMSTRONGS each face a maximum sentence of 20 years' imprisonment, and a $1,000,000 fine. INTERNATIONALPHARMACY. COM S.A. faces a maximum fine of $5,000,000. In addition, the indictment seeks a forfeiture money judgment against all defendants totaling $4.7 million, for which the defendants are jointly and severally liable. The indictment also seeks forfeiture of directly traceable assets of the defendants, including all assets of Datapro Consulting, Inc., a company controlled by the defendant DAVID ARMSTRONG, and a residence located at 50-28 Utopia Parkway, Fresh Meadows, New York, which was used to facilitate the drug trafficking activities.
The case has been assigned to United States District Judge Nicholas G. Garaufis.
The government's case is being prosecuted by Assistant United States Attorneys Kathleen Nandan, Paige Petersen, and Daniel E. Wenner.
Name: INTERNATIONAL-PHARMACY.COM S.A.
Residence: Costa Rica
Name: CORINNA MEHRER
Residence: Costa Rica
Name: DAVID ARMSTRONG
Residence: Queens, New York
Name: ELIZABETH ARMSTRONG
Residence: Queens, New York
2 Pharmaceutical drugs are regulated by federal statutes. To obtain these drugs legally, a patient must have a written prescription from a doctor, or the patient's doctor must provide an oral prescription directly to a pharmacy registered with the DEA, which is immediately reduced to writing and filed by the pharmacist.
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