eBay, Controlled Substances Act Violations, California 2024

eBay’s Dark Secret: Selling Pill Presses to Criminals

eBay Inc., an e-commerce company headquartered in San Jose, California, has agreed to pay $59 million and to enhance its compliance program to resolve allegations that it violated the Controlled Substances Act (CSA) in connection with thousands of pill presses and encapsulating machines that were sold through its website.

The pill presses and encapsulating machines can be used by criminals to manufacture illegal drugs. When used with a mold, stamp, or die mimicking commonly prescribed controlled substances, pill presses are capable of producing counterfeit pills that appear indistinguishable from legitimate pharmaceutical drugs, including pills that are sometimes laced with fentanyl.

The CSA regulates certain pharmaceutical manufacturing equipment, including pill presses and encapsulating machines, by requiring identity verification of purchasers, record-keeping, and reporting to the Drug Enforcement Administration (DEA).

The United States alleged that eBay did not comply with these CSA requirements for thousands of pill presses and encapsulating machines that were sold through its website, including high-capacity pill presses capable of producing thousands of pills per hour.

“Counterfeit pills laced with fentanyl are a significant contributor to the deadly overdose epidemic,” said Associate Attorney General Vanita Gupta, Chair of the Justice Department’s Opioid Epidemic Civil Litigation Task Force.

“Americans deserve to be protected from the dangers of counterfeit prescription pills,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division.

“Through its website, eBay made it easy for individuals across the country to obtain the type of dangerous machines that are often used to make counterfeit pills. Our investigation revealed that some of these machines were even sold to individuals who were later convicted of drug-related crimes,” said U.S. Attorney Nikolas P. Kerest for the District of Vermont.

eBay’s failure to comply with the Controlled Substances Act’s basic reporting and record-keeping requirements for the sales of pill presses contributed to the proliferation of counterfeit pills in this country by allowing private citizens to set up pill factories in their homes and to do so without detection, said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.

The United States’ investigation further found that hundreds of eBay’s pill press buyers also purchased counterfeit molds, stamps, or dies, allowing them to produce pills that mimicked the products of legitimate pharmaceutical companies, and that many of eBay’s pill press buyers have been successfully prosecuted in connection with trafficking illegal counterfeit pills.

The settlement holds eBay accountable for its compliance lapses, serves as a reminder to other e-commerce companies that the Justice Department will enforce these requirements, and will help keep these items out of the hands of criminals moving forward.

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