Manhattan U.S. Attorney Announces Charges Against 10 Individuals In Multi-Million Dollar Internet Pharmacy Fraud Scheme
Two Pharmacists Were Allegedly Paid at Least $13 Million by Bogus Online Pharmacy Operators for Filling Invalid Prescriptions Issued by Various Doctors
Preet Bharara, the United States Attorney for the Southern District of New York, and Robert G. Koval, the Acting Special Agent-in-Charge of the New Jersey Division of the Drug Enforcement Administration (“DEA”), today announced charges against two pharmacists, PETER J. RICCIO and LENA LASHER; three physicians, JOHN NICHOLAS BURLING, ROBERT P. IMBERNINO, and EDMUND S. KAPLAN; and five website operators, TIMOTHY KEAR, CHRISTOPHER RILEY, ADAM RISOLIA, GERGANA CHERVENKOVA, and PAUL GRYSZKIEWICZ, for their alleged participation in a multi-million dollar Internet pharmacy fraud scheme. The alleged scheme involved the sale and distribution of controlled and non-controlled substances to customers across the United States without valid prescriptions.
Nine of the defendants were arrested this morning and will be presented in federal court later today. RICCIO, LASHER, KEAR, and GRYSZKIEWICZ will appear in Manhattan federal court, and KAPLAN and IMBERNINO will both appear in the Central District of California. BURLING, RILEY, and RISOLIA will make their initial court appearances in the districts of South Carolina, Maryland, and Florida (Southern), respectively. CHERVENKOVA, a Bulgarian citizen based in Bulgaria, remains at large. In addition to the arrests, multiple search warrants were executed and bank accounts seized in connection with today’s charges.
Manhattan U.S. Attorney Preet Bharara stated: “As alleged, this multi-million dollar Internet pharmacy pill scheme involved pharmacists and doctors who placed cash over care by partnering with corrupt website operators to peddle massive quantities of addictive pain pills without valid prescriptions. We will not tolerate the violation of laws and regulations governing the pharmaceutical industry, and today’s arrests underscore our ongoing commitment to pursuing those who illegally put profit over public health and safety.”
DEA Acting Special Agent-in-Charge Robert G. Koval stated: “This allegedly illicit trafficking organization foolishly used the internet to further their illegal activities. This operation was not just another medical product source like a local neighborhood pharmacy, but rather an allegedly widespread, concealed international criminal enterprise that used the cover of the internet to commit fraud and drug trafficking.”
The following allegations are based on the Indictment unsealed today in Manhattan federal court:
RICCIO is a licensed pharmacist who operated one pharmacy in New Jersey and two in Pennsylvania. LASHER was the Pharmacist-in-Charge at the Pennsylvania pharmacies. BURLING, IMBERNINO, and KAPLAN are licensed physicians located in South Carolina, California, and New York, New York, respectively. KEAR, RILEY, RISOLIA, GRYSZKIEWICZ, CHERVENKOVA, and others (the “Website Operators”), operated websites that allowed customers to order pain medication without the valid prescriptions required by law (the “Prescription Websites”). The prescriptions were written by BURLING, IMBERNINO, KAPLAN, and others, and then filled by RICCIO and LASHER, and others.
The Internet Fraud Scheme
From 2010 until November 2012, customers seeking certain prescription pain medications including, Fioricet, Soma, Ultram, and others (“Prescription Drugs”), which are highly addictive, would visit one of the Prescription Websites where they could choose the Prescription Drugs they wished to order. The Prescription Websites often contained misrepresentations regarding the issuance of the prescriptions. For example, a posting on one Prescription Website said that Prescription Drugs would not be dispensed before the customer consulted with the Prescription Website’s “U.S. Licensed Physician.” These consultations did not occur.
In order to get their prescriptions filled, Prescription Website customers were only required to complete an online medical questionnaire in which they were asked a series of questions regarding their medical history. The questionnaires often contained “yes” or “no” questions that were already marked with the correct answers to ensure that the customers were not disqualified from getting their prescriptions filled. Following the customer’s order and completion of the medical questionnaire, the Website Operators would transmit the questionnaire to BURLING, IMBERNINO, KAPLAN, and other doctors, who would issue a prescription without first conducting an in-person medical examination, reviewing medical records, or otherwise verifying any of the information provided by the customer, who often did not live in the same state as the doctor. Once issued by the doctor, the prescription was sent to a pharmacy, including the three operated by RICCIO, to be filled. RICCIO and/or LASHER would then fill or cause others to fill the prescriptions and then mail or deliver the Prescription Drugs to customers, including customers in the Southern District of New York.
KEAR, RILEY, RISOLIA, CHERVENKOVA, GRYSZKIEWICZ, and others paid the doctors who issued the prescriptions and the pharmacists who filled them via domestic and international wire transfers. During the course of the scheme, bank accounts controlled by BURLING, IMBERNINO, and KAPLAN received hundreds of thousands of dollars from Website Operators, including from bank accounts located in Cyprus, Hong Kong, and Israel. Bank accounts controlled by RICCIO and/or LASHER received in excess of $13,000,000 from Website Operators.
* * *
A chart outlining the charges against each defendant and the applicable penalties for each count is attached to the release. This case has been assigned to U.S. District Judge Naomi Reice Buchwald.
Mr. Bharara praised the investigative work of the DEA’s New Jersey Division. He also thanked the Internal Revenue Service-Criminal Investigation agents who are part of Homeland Security Investigation’s El Dorado Task Force, the Food and Drug Administration’s Office of Criminal Investigations, the United States Postal Inspection Service, the Department of Justice’s Office of International Affairs, and INTERPOL for their assistance in the investigation, which he noted is ongoing.
The prosecution is being handled by the Office’s Narcotics Unit. Assistant U.S. Attorneys Timothy D. Sini, Daniel C. Richenthal, and Ian McGinley are in charge of the prosecution. Assistant U.S. Attorney Andrew Goldstein is in charge of asset forfeiture related to the prosecution.
The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty