Two CEOs of Wholesale Pharmaceutical Companies and Two Owners of Bank Accounts Used for Money Laundering Indicted in Alleged Prescription Diversion Scheme
Joshua Ryan Joles, the CEO of LLC Wholesale Supply, LLC, Mohammad Mehdi Salemi, the CEO of Wholesalers Group, Inc. and Wholesalers Group, LLC, and bank account holders Angel Caminero Alvarez and Leonides Herrera were indicted on charges of money laundering, committing violations of the Federal Food, Drug, and Cosmetic Act, and mail fraud, related to their alleged participation in a scheme to sell diverted pharmaceuticals to unwitting pharmacies and consumers.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida stated, “The allegations set forth in this scheme strike at the peace of mind we should all feel when we buy prescription drugs from a pharmacy. We all expect and should rest assured knowing that the drugs we are buying are safe, effective, and properly stored and handled. Today and whenever necessary, we will continue to strike back at those who seek to profit by robbing the public of that peace of mind through brazen, criminal schemes.”
According to the indictment, Joles and Salemi are alleged to have purchased and distributed millions of dollars in diverted pharmaceuticals, which are prescription drugs illegally trafficked in a secondary or underground market (Case No. 19-20674-CR-Gayles). The indictment explains that the diverted pharmaceuticals are not controlled substances, but rather, high priced medical drugs used to treat such conditions as mental illness, human immunodeficiency virus (HIV), and cancer. They are branded drugs, produced by the original pharmaceutical developers as opposed to lower-priced generic drugs, but are acquired unlawfully -- through fraud, pharmacy burglaries, and cargo thefts.
Joles and Salemi are alleged to have acquired such drugs in large quantities, at a cost well-below normal wholesale prices, and then introduced the diverted drugs back into the legitimate marketplace. The indictment further alleges that, because the pharmaceutical distribution system is regulated, to get diverted drugs back into the market, the diverters must, among other things, establish seemingly legitimate wholesale companies and bank accounts, produce fraudulent paperwork, and professionally package and ship the medicines to their pharmacy customers. Joles and Salemi are alleged to have produced or caused the production of fraudulent paperwork, including falsified pedigrees, which are documents that identify the products and batch numbers of pharmaceuticals, describe their dates of manufacture and origin, indicate who purchased them, show when and where they were shipped, how they were purchased, and other information needed to trace them through the marketing chain. Utilizing these false pedigrees, Joles and Salemi allegedly sold or caused the sale of these diverted pharmaceuticals to unsuspecting pharmacies and their patients.
Additionally, Joles and Salemi, with the assistance of Alvarez and Herrera, are alleged to have laundered money as part of this scheme, including conducting financial transactions to promote the carrying on of the scheme and to conceal the nature, source and ownership of the money.
“This investigation into a South Florida based drug diversion group spanned the entire country, from California to Puerto Rico,” said George L. Piro, Special Agent in Charge of the FBI’s Miami Field Office. “It is truly an example of multiple federal and state agencies working together with private industry to take out of circulation thousands of bottles of potentially dangerous drugs, and also disrupt a money laundering scheme that moved millions of dollars a month through South Florida.”
“U.S. consumers are put at risk when prescription drugs are diverted from the FDA-regulated supply chain and then returned clandestinely for distribution to the public, as there is no longer any assurance that the products are safe and effective for their intended uses,” said Justin D. Green, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations’ (FDA-OCI) Miami Field Office. “We will continue to pursue and bring to justice those who put the public health at risk.”
Herrera was arrested this morning and will have his initial appearance Monday afternoon, Oct. 21, 2019, before U.S. Magistrate Judge Alicia M. Otazo-Reyes. Joles and Salemi will have their initial appearances on later dates. Alvarez remains a fugitive.
The prosecution was part of Operation Southern Hospitality, one of the ongoing efforts by the Organized Crime Drug Enforcement Task Force (OCDETF), a partnership between federal, state and local law enforcement agencies. The OCDETF mission is to identify, investigate, and prosecute high level members of drug trafficking and money laundering enterprises, bringing together the combined expertise and unique abilities of federal, state and local law enforcement.
U.S. Attorney Fajardo Orshan praised the outstanding investigative work of the FBI and FDA-OCI. She also thanked the U.S. Attorney’s Offices for the Northern District of California, the District of Arizona, and the Western District of Washington, the FBI’s Los Angeles, Phoenix and Seattle Field Offices, the U.S. Marshal’s Service in Miami, Florida Department of Law Enforcement, Attorney General's Office of Statewide Prosecution in Fort Lauderdale, and Medicaid Fraud Control Unit for their invaluable assistance.
The prosecution of this case is being handled by Assistant U.S. Attorneys Frank Tamen and Walter M. Norkin. Assistant U.S. Attorney Nicole Grosnoff is handling the asset forfeiture aspects of this matter.
The charges contained in the indictment are merely accusations and the defendants are presumed innocent unless proven guilty in a court of law.