FOR IMMEDIATE RELEASE	ANGELA DODGE
Jan. 29, 2008	PUBLIC AFFAIRS OFFICER
WWW.USDOJ.GOV/USAO/TXS	(713) 567-9388

FORMER HOUSTON PHYSICIAN PLEADS GUILTY TO MONEY LAUNDERING

(HOUSTON, Texas) - Alonzo Peters III, 55, pleaded guilty to money laundering in connection with a conspiracy to illegally distribute prescription drugs, United States Attorney Don DeGabrielle announced today.

A federal grand jury returned an indictment in July 2006 charging the former physician with the distribution of controlled substances outside the course of professional practice and not for a legitimate medical purpose and money laundering. On Monday, Jan. 28, 2008, Peters pleaded guilty to laundering money derived from the illegal distribution of the prescription drugs. Peters now faces a maximum possible sentence of 20 years imprisonment and a $500,000 fine. Sentencing has been scheduled for April 28, 2008. Peters was a licensed physician practicing medicine in Houston until November 2004, when his license was revoked by the Texas State Board of Medicine.

Peters was charged along with three local pharmacists, Ansa Hogan, Dennis Martin George and Terry Green, with illegally distributing prescription drugs outside the course of professional practice and not for a legitimate medical purpose, knowing the drugs were re-sold on the streets.   Hogan, George and Green entered pleas of guilty in October 2007 to various charges. During the period of the conspiracy, Hogan owned the Medicine Shoppe Pharmacy; George was the owner of Foodarama Pharmacy; and Green was the owner of Millennium Pharmacy, all of which were located in the Houston area, but are no longer in operation. Hogan, George and Green each admitted to dispensing large quantities of Hydrocodone products, such as Lorcet, Lortab, Norco, Tussionex and Hydromet, each a Schedule III Controlled Substance. They also admitted to dispensing other non-scheduled drugs including Soma, Xanax and Valium.

According to the plea agreement, Peters had offices at 938 East Tidwell, Houston, Texas, and later relocated to North Medical Center, 5990 Airline, Suite 240, Houston, Texas. He saw  regular patients as well as other pain management patients under the guise of a legitimate doctor-patient relationship, under which he would prescribe narcotic substances. For these narcotics prescriptions, Peters charged persons $500 for the first visit and $300 for subsequent visits.

Peters usually called in prescriptions for hydrocodone products, known by the trade names of Vicodin, Vicodin ES, Lortab, Lorcet, Norco, Tussionex and Promethazine with codeine. Some prescriptions would also include other scheduled and non-scheduled but dangerous drugs, such as Xanax, Soma, Valium and Tylenol III, which are highly abused on the streets.

During 2000, Hogan agreed with Peters to fill and dispense these drugs in accordance with his prescriptions, knowing these drugs were being illegally prescribed and dispensed outside the course of professional medical practice and not for a legitimate medical purpose. Thereafter, Peters also met with and made similar arrangements with George and Green. As many as 25-35 people on occasion were transported in vans and other large vehicles, and were observed entering and exiting Peters’ office and visiting the Foodarama and Millennium Pharmacies.  Hogan, George and Green filled and dispensed a very large number of prescriptions for individuals who came to their pharmacies to purchase prescriptions called in by Peters. Peters and each pharmacist required patients to pay for these drugs primarily in cash. Peters and his staff would typically direct persons to specific pharmacies with a sheet giving handwritten information for the name of the pharmacy and directions on how to get there, which included The Medicine Shoppe, Foodarama and Millennium Pharmacies.

On Aug. 30, 2001, a law enforcement official working in an undercover capacity visited Peters in his office. He paid Peters $500 cash on this first visit and was given a prescription for four drugs, including hydrocodone products and Promethazine with codeine. He was directed to the Medicine Shoppe Pharmacy, where the prescription was filled for $1,343.27 cash.

Other undercover operations continued in 2001 and 2002, when law enforcement officers visited Peters and paid cash for visits and received fraudulent prescriptions. These prescriptions were filled primarily at the pharmacies listed in the indictment.

Peters used the monies he received from the illegal distribution of the aforementioned controlled substances to purchase a 33-karat diamond, a 2002 Cadillac Escalade, two residences, a condominium, at least three custom motorcycles, all of which have been forfeited to the United States. In addition, Peters spent at least $1.3 million on gambling ventures from 2000 through 2003. During the execution of a search warrant Nov. 4, 2002, $6,990 was also seized from his office. 

This investigation has been conducted by the Tactical Diversion Squad of the Drug Enforcement Administration – Houston Division, the National Drug Intelligence Center, the Internal Revenue Service, Houston Police Department Narcotics Division, the Food and Drug Administration, the Alexandria, La., Police Department, Texas Department of Public Safety Narcotics Service and the Fort Bend County Sheriff’s Department. The case was prosecuted by Assistant United States Attorneys Cedric Joubert and Quincy Ollison.         

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