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Multi-Million Dollar Prescription Drug Scheme Exposed
Altec Medical, a pharmaceutical distribution company based in Easley, South Carolina, pleaded guilty to a multi-million dollar prescription drug scheme. The company was charged with conspiring to defraud the U.S. Food and Drug Administration (FDA) and to commit federal offenses in connection with a drug-diversion scheme that lasted from 2007 to 2009.
Altec Medical paid its supplier and co-conspirator William D. Rodriguez approximately $55 million for prescription drugs that it knew had been diverted from lawful channels of drug wholesale distribution. The company was ordered to pay a $2 million fine and to forfeit $1 million. It was also placed on probation for one year.
According to a plea agreement filed with the court, Altec became aware that Rodriguez had bought the drugs from individuals who had acquired them illegally and who were not properly licensed to sell prescription drugs on a wholesale basis. The government charged that Altec and Rodriguez orchestrated the reentry of these drugs into the lawful channels of distribution.
The process of reentry involved Rodriguez sending the diverted drugs to companies he controlled in South Carolina, which then resold the drugs to Altec. Altec, in turn, resold the drugs to various purchasers throughout the United States, including drug distributors with valid drug distribution licenses.
The government further charged that Altec and Rodriguez attempted to conceal their scheme by falsifying a variety of business records, including drug pedigrees. These statements are required by the FDA of all those who sell wholesale quantities of prescription drugs and are supposed to accurately identify all prior sales and transactions.
Stuart F. Delery, Acting Assistant Attorney General for the Justice Department’s Civil Division, warned that drug diversion undermines the safety and effectiveness of the prescription drug system. He emphasized that diverted drugs could be expired, contaminated, or have their mechanisms of action altered, putting consumers at risk. The Justice Department advises consumers to check the lot numbers on the manufacturer’s web site to see if there are any warnings about the drug.
Altec’s actions have serious consequences for public health and safety. The use of diverted drugs can cause unpredictable adverse side effects and may fail to treat the condition for which a consumer is taking the drugs. The company’s guilty plea serves as a warning to others who may engage in similar schemes.
Key Facts
- State: Federal
- Category: Drug Trafficking|Fraud & Financial Crimes|Violent Crime|Sex Crimes|Cybercrime|Public Corruption|Weapons|Human Trafficking|White Collar Crime|Organized Crime
- Source: DOJ Press Release ↗
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