EBay Inc., Controlled Substances Act Violations, California 2023

Deadly Threat to Public Health

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.

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 United States alleged that eBay did not comply with the 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. The investigation 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.

eBay’s failure to comply with the CSA’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.

eBay’s settlement is an important step to ensuring that e-commerce companies do their part by complying with regulations that are designed to protect the public, said U.S. Attorney Nikolas P. Kerest for the District of Vermont. The Justice Department will continue to work with law enforcement partners to ensure that all those involved in the sale of counterfeit pills and the equipment used to manufacture counterfeit pills are held accountable.

The United States’ investigation further found that many of eBay’s pill press buyers have been successfully prosecuted in connection with trafficking illegal counterfeit pills. 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). These requirements are designed to prevent individuals who intend to use these machines illegally from obtaining them and to ensure that the machines are traceable to the end user.

eBay’s failure to comply with these regulations contributed to the sale of thousands of pill presses and encapsulating machines that were sold through its website, said U.S. Attorney Nikolas P. Kerest for the District of Vermont. The company’s settlement is 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, said U.S. Attorney Henry C. Leventis for the Middle District of Tennessee.

“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.

Related Federal Cases