Controlled Substance Disposal Company Pays to Resolve Allegations of Civil Liability

PHILADELPHIA – United States Attorney William M. McSwain announced that Specialty Disposal Services, Inc., a controlled substance disposal company with its principal place of business in New Jersey, will pay $137,500 and enter into an administrative memorandum of agreement with the Drug Enforcement Administration to resolve allegations that the company negligently failed to complete required records regarding the disposal of certain controlled substances.

Specialty Disposal Services (SDS) is registered with the DEA as a reverse distributor. The settlement announced today resolves allegations that SDS negligently failed to make and keep records required by the Controlled Substances Act for reverse distributors arising from SDS’s transportation of controlled substances to a third-party facility in Morrisville, PA. In particular, the settlement resolves allegations that SDS negligently failed to properly complete the DEA form requiring verification that SDS’s employees witnessed the destruction of the controlled substances, which ultimately led to some of those controlled substances being subject to diversion by employees of the third-party facility. There are no allegations, however, that SDS was aware of or involved in the diversion. The settlement resolves liability for SDS’s record-keeping from January 9, 2017 through September 30, 2018.

In addition to the $137,500 civil penalty, SDS entered into an administrative agreement with the DEA, in which it agreed to various compliance and monitoring measures such as ensuring its compliance with these regulatory obligations. SDS and the third-party facility cooperated with the government’s investigation.

“The accountability and record-keeping requirements imposed by the DEA for companies that handle controlled substances are critical in preventing diversion,” said U.S. Attorney McSwain. “This civil settlement acknowledges the important responsibilities that all controlled substance disposal companies have to comply with those requirements and to do their part to prevent controlled substances from falling into the wrong hands.”

“Reverse distributors like Specialty Disposal Services play an important role in the closed distribution system of pharmaceutical controlled substances,” said Jonathan A. Wilson, Special Agent in Charge of the Drug Enforcement Administration’s (DEA) Philadelphia Field Division. “As such, their observation and documentation of the proper disposal of these same substances are essential to their responsibilities under the Controlled Substances Act.”

The civil investigation was conducted by the Philadelphia Field Division of the Drug Enforcement Administration. For the United States Attorney’s Office, Assistant United States Attorney Anthony D. Scicchitano handled the investigation and settlement.

The claims resolved by the settlement are allegations only; there has been no determination of liability and no admission of any facts.