Skip to main content
Press Release

San Diego Pharmacy Owners Pay $750,000 to Resolve Drug Diversion Allegations

For Immediate Release
U.S. Attorney's Office, Southern District of California

Assistant U.S. Attorney Dylan M. Aste (619) 546-7621

NEWS RELEASE SUMMARY – November 17, 2015

SAN DIEGO – United States Attorney Laura E. Duffy announced today that a group of San Diego pharmacies and their owners have paid $750,000 to the federal government to resolve allegations that they mishandled significant amounts of highly addictive and frequently abused prescription narcotics, as well as ephedrine or pseudoephedrine products.  

The settlement is with Park Medical Pharmacy, Inc., and owners Joseph Grasela and John Grasela.  The Graselas and Park Medical Pharmacy, Inc. do business as Medical Center Pharmacy.  They operate a dozen storefront pharmacies under various names such as Galloway Medical Center Pharmacy, Community Medical Center Pharmacy, and Medical Center Pharmacy. 

The settlement arises from a U.S. Drug Enforcement Agency (“DEA”) investigation into suspected illegal activity at Medical Center Pharmacy. Based on DEA’s inventory audits, inspections, and other investigative activities, the United States asserts that Medical Center Pharmacy committed multiple violations of the Controlled Substances Act (“CSA”).   

The alleged violations include diversion of a significant amount of controlled substances, failure to control the pharmacies’ inventory of controlled substances, and failure to maintain required records of the pharmacies’ distribution of controlled substances.  The alleged violations also include failure to obtain the proper authorization required for the sale of ephedrine and pseudoephedrine products, which can be used to produce methamphetamine.

The United States asserts that Medical Center Pharmacy was unable to account for roughly 21,000 pills at four locations over a two-year span.  In some instances, two pharmacy technicians allegedly diverted thousands of pills.  In others, Medical Center Pharmacy allegedly delivered drugs to a residence that pill seekers used in conjunction with their sham identities.  The unaccounted-for pills were the powerful and highly addictive drugs oxycodone and hydrocodone, commonly known by their brand names OxyContin, Roxicodone, and Percocet. 

The United States contends that Medical Center Pharmacy violated the Combat Methamphetamine Epidemic Act (“CMEA”) portion of the CSA.  The CMEA was enacted to curtail the illicit production and use of methamphetamine by requiring pharmacies to certify that they have met CMEA requirements such as properly training their employees in the proper sale of ephedrine, pseudoephedrine, and other listed chemical products. The CMEA also requires pharmacies to keep a logbook of certain listed chemical products sold, and the logbook must contain the identity of the purchaser and the product that was purchased.  This requirement, along with a cap on the amount of listed chemical products an individual may purchase, helps prevent “meth smurfing” – the purchasing of legal amounts of ephedrine products but in many separate purchases.  The United States asserts that Medical Center Pharmacy unlawfully sold listed chemical products without DEA authorization, did not properly maintain logbooks, and did not train employees.

“Pharmacies that are given the commercial benefit of selling controlled substances must meet their legal burden of adhering to the strict requirements prescribed under the Controlled Substances Act.  We will aggressively pursue those who violate these requirements,” stated U.S. Attorney Duffy.  “Oxycodone and hydrocodone have similar chemical structures to heroin and are similarly dangerous.  The United States will not tolerate drug diversion or poor inventory control of highly abused and highly addictive prescription painkillers. This settlement conveys that message.”  

In addition to paying $750,000 in settlement to the government, Medical Center Pharmacy has committed to implementing new inventory control procedures to assure full accountability of all controlled substances.

“It is DEA’s responsibility to guarantee that pharmacies are held accountable for their role in ensuring powerful and potentially dangerous drugs are not diverted for illegal use,” said DEA San Diego Special Agent in Charge William R. Sherman. “DEA will continue to monitor and investigate pharmacies to ensure that they are following all federal regulations so that these potent drugs don’t end up on the streets of our communities.”

This matter was handled by Assistant U.S. Attorney Dylan M. Aste of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office.

Updated February 4, 2016

Press Release Number: CAS15-1117-Grasela