NEW YORK, NY – Randy Crowell, 57, the owner of a St. George, Utah-based pharmaceutical wholesale distributor, is headed to federal prison for five years. Acting United States Attorney Joon H. Kim announced today that Crowell, also known as “Roger,” was sentenced to 60 months for his central role in a $100 million black market medication scheme that preyed on vulnerable patients and defrauded government healthcare programs.
Crowell’s operation, dubbed “Wholesaler-1” by investigators, illegally sourced over $100 million worth of prescription drugs from a nationwide black market, selling them to pharmacies as if they were legitimate products. The scheme, which ran from early 2010 to at least July 2012, specifically targeted expensive medications, notably those used to treat HIV/AIDS, maximizing profits at the expense of patient safety. The drugs were then dispensed to unsuspecting patients who had no idea they were taking potentially compromised medication.
“For more than two years, Randy Crowell personally profited from perverting a system designed to ensure patients receive safe and effective medication,” stated Acting Manhattan U.S. Attorney Kim. “He victimized healthcare companies and government benefit programs, as well as countless people suffering from life-threatening illnesses. The recipients of Crowell’s black market medications had no way to know that the medicines they purchased at pharmacies might be dangerous.”
The investigation revealed a disturbing process. Medications obtained through the underground market were often “cleaned” with hazardous chemicals like lighter fluid to remove identifying information indicating they’d already been dispensed to other patients. These bottles were then repackaged and shipped across the country in unsanitary conditions, raising serious concerns about the safety and efficacy of the drugs. The scheme wasn’t just about profit; it was a reckless disregard for public health.
Crowell pled guilty on January 6, 2017, to one count of conspiracy to commit healthcare fraud before United States District Judge Edgardo Ramos, who imposed the 60-month sentence. Beyond the prison term, Crowell has been ordered to forfeit over $13 million in personal profits gleaned from the fraudulent scheme. He’s also been slapped with a $65 million restitution order to compensate Medicaid for the losses incurred.
This case represents the culmination of a six-year investigation by the U.S. Attorney’s Office and the FBI into a massive, nationwide healthcare fraud operation involving over $500 million in illicit medications. To date, 57 individuals have been charged and convicted for their involvement. Authorities have recovered hundreds of millions in restitution and criminal forfeiture, offering a small measure of justice to the victims of this brazen scheme. The investigation remains ongoing as authorities continue to untangle the web of co-conspirators and hold them accountable.
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Drug Trafficking|Fraud & Financial Crimes|White Collar Crime
- Source: Official Source ↗
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