Two Physicians Plead Guilty in International
Internet Pharmacy Conspiracy
Two physicians have
pleaded guilty to conspiracy for their participation
in an Internet pharmacy business that generated more
than $126 million in gross revenues from the illegal
sale of prescription pharmaceuticals, Acting Assistant
Attorney General Matthew Friedrich of the Criminal
Division and U.S. Attorney Karen P. Hewitt for the
Southern District of California announced today.
Chandresh Shah, M.D., 51, of Smyrna, Ga., pleaded
guilty today in San Diego before U.S. District Judge
Irma E. Gonzalez to one count of conspiracy to illegally
distribute controlled substances and agreed to forfeit
$16,674.
On July 8, 2008, Gerald Morris, M.D., 37, of Houston,
also pleaded guilty before Judge Gonzalez to one count
of conspiracy to illegally distribute controlled substances
and agreed to forfeit $52,446.
Shah and Morris were indicted on July 27, 2007, with
16 other defendants for their role in a conspiracy
to operate an international online pharmaceutical distribution
network known as Affpower. According to the indictment,
the Affpower enterprise sold controlled and non-controlled
prescription drugs through numerous affiliated Web
sites to customers who lacked prescriptions for the
drugs from a personal physician. From August 2004 to
June 2006, the Affpower enterprise allegedly received
more than one million Internet orders for controlled
and non-controlled prescription pharmaceuticals from
customers in all 50 U.S. states.
In their plea agreements, both Morris and Shah admitted
that they and other doctors issued drug prescriptions,
not in the course of diagnosing and treating medical
conditions, but to facilitate the sale of prescription
pharmaceuticals pre-selected by customers and for the
doctors' own personal profit. Morris and Shah also
admitted Affpower enterprise doctors conducted no physical
or mental examinations before issuing prescriptions,
had no contact with customers and had no physician-patient
relationship with any customer for whom the doctors
prescribed drugs. Morris and Shah also admitted that
Web sites advertising the Affpower enterprise’s
business contained materially false representations,
including inaccurate assurances that the enterprise
met or exceeded all regulations governing prescription
pharmaceuticals sales.
At sentencing, Shah and Morris both face a maximum
of five years in prison and $250,000 fines for conspiracy
to illegally distribute controlled substances. Morris
is scheduled to be sentenced on April 13, 2009. Shah’s
sentencing is scheduled for April 20, 2009. Seven other
defendants named in the 313-count indictment have previously
pleaded guilty. Trial for the remaining defendants
is set for Feb. 24, 2009.
“By prescribing drugs to patients they had never
even met, much less diagnosed, these two physicians
facilitated the illegal sale of pharmaceuticals over
the Internet.” said Acting Assistant Attorney
General Matthew Friedrich. "Those who participate
in or operate such schemes can expect to be prosecuted.”
“The public deserves to deal with physicians
and pharmacists who honestly and professionally work
to guard people's health,” said U.S. Attorney
Karen P. Hewitt. “These convicted defendants
sold that immense responsibility with which they were
entrusted.”
“These individuals participated in a scheme
for their own financial benefit by preying upon the
vulnerabilities of patients seeking to purchase prescription
medications,” said Assistant Director Kenneth
W. Kaiser, FBI Criminal Investigative Division. “In
the interest of public health and safety, the FBI is
committed to working with our law enforcement partners
to investigate and dismantle the operation of fraudulent
Internet pharmacies like Affpower that victimize American
consumers.”
“Never has the expression ‘buyer beware’ had
a greater ring of truth,” said Julie L. Myers,
Department of Homeland Security Assistant Secretary
for U.S. Immigration and Customs Enforcement (ICE). “The
illegal sale of pharmaceuticals over the Internet poses
a serious threat to Americans who mistakenly assume
these substances are safe. The defendants who pleaded
guilty today were medical professionals who knew full
well the risks inherent in what they were doing. ICE
is committed to seeing that those who exploit the Internet
for profit and put the public in harm’s way are
prosecuted to the fullest extent of the law.”
“The Internet age has changed the way we all
conduct our daily business and the medical profession
is not immune. Unfortunately, the proliferation of
unlawful Internet pharmacies has allowed some in trusted
professions who seek to exploit perceived vulnerabilities
to veil themselves with anonymity and betray their
sacred oath and the public trust,” stated Drug
Enforcement Administration (DEA), San Francisco Special
Agent-in-Charge Javier F. Peña.
“IRS Criminal Investigations' contribution in
this case, as well as in many others, involves providing
the financial expertise to follow the money trail and
seizing the profits of illegal activities,” said
Eileen Mayer, Chief of the Internal Revenue Service-Criminal
Investigation Division (IRS-CI). “Working together
and utilizing the expertise offered by our partner
investigative agencies makes law enforcement more effective
in ending corruptive activity such as what occurred
in this case.”
In addition to the pleas by Shah and Morris, plea
agreements for two other defendants connected to the
Affpower enterprise have recently been unsealed in
U.S. District Court in San Diego. Michael L. Bezonsky,
46, of Calabasas, Calif., whose plea was unsealed on
June 5, 2008, pleaded guilty in San Diego before U.S.
District Judge John A. Houston to one count of participating
in a RICO conspiracy for his role in creating and operating
the Affpower enterprise. Bezonsky also agreed to forfeit
$12,257,411 in connection with his plea. In pleading
guilty Bezonsky admitted that at his and others’ direction,
the Affpower enterprise engaged in a pattern of racketeering
activity involving multiple acts of illegally distributing
controlled substances and money laundering. At sentencing – scheduled
for April 13, 2009 – Bezonsky faces a maximum
of 20 years in prison and fine of $250,000 or twice
his gross profits from the illegal activity for the
RICO conspiracy.
At the same time, Bezonsky also entered a guilty
plea to one count of conspiracy to distribute controlled
substances and one count of money laundering charged
in a separate indictment that was returned Aug. 2,
2006, in the Eastern District of Pennsylvania stemming
from other related illegal Internet pharmacy activities.
Bezonsky agreed to forfeit more than $635,792 in connection
with the plea in the Eastern District of Pennsylvania.
In that plea agreement, Bezonsky admitted to being
the principal operator of another Internet pharmacy
business known as RX Medical One, which received approximately
$33,676,000 from the sale of controlled pharmaceutical
substances from approximately September 2003 to May
2004. At his sentencing on April 13, 2009, Bezonsky
also faces a maximum of five years in prison and a
$250,000 fine for the conspiracy to illegally distribute
controlled substances and a maximum of 20 years in
prison and a fine of two times the value of the property
involved in the transactions for conspiracy to commit
money laundering.
Brittin Cahill, 45, of Alisa Viejo, Calif., whose
plea was unsealed on June 9, 2008, also pleaded guilty
before Judge Houston to one count of conspiracy to
illegally distribute controlled substances and one
count of conspiracy to commit money laundering. Cahill
also agreed to forfeit $582,746. Cahill admitted under
the terms of her plea agreement that she operated Affpower
enterprises’ Web sites, recruited and managed
other affiliates who advertised the Affpower enterprises’ business,
and opened an overseas account in the name of a fictitious
business in which she received some of her commissions
from the illegal sales of controlled substances. At
sentencing – scheduled for Sept. 22, 2008 – Cahill
faces a maximum of five years in prison and a $250,000
fine for the conspiracy to illegally distribute controlled
substances and a maximum of 20 years in prison and
a $500,000 fine for the conspiracy to commit money
laundering.
In addition, two other defendants previously pleaded
guilty for their roles in the Affpower enterprise.
David Ari Glass pleaded guilty on June 29, 2006, to
conspiracy to commit mail fraud and to dispense misbranded
drugs with the intent to defraud, as well as conspiracy
to commit money laundering. Glass also agreed to forfeit
approximately $118,000 of illegally earned proceeds
from his participation in the Affpower enterprise.
Jeffry Alan Wright pleaded guilty on Nov. 16, 2006,
to a misdemeanor charge of conspiracy to dispense misbranded
drugs and agreed to forfeit to $205,143.
The cases are the result of an investigation by a
multi-agency task force based in San Diego consisting
of agents from ICE, the Federal Drug Administration’s
Office of Criminal Investigations, IRS-CI, the FBI,
the DEA’s San Francisco Field Division and the
U.S. Postal Inspection Service. This case is being
prosecuted by Senior Counsel Corbin Weiss and Trial
Attorneys Jared Strauss and Michelle Kane of the Criminal
Division’s Computer Crime and Intellectual Property
Section.
