A massive black market scheme that diverted and sold critical prescription drugs could put unsuspecting patients in harm’s way and make the US government out of millions of dollars, according to federal charging documents unsealed Wednesday.
The illegal operation was allegedly led, aided and abetted by several pharmacy owners and employees in Puerto Rico, as well as medical facility procurement workers who “used their positions” to steal legal drugs from warehouses before they reached the market and then resold them. at “steep discounts” for individual pharmacy owners, according to the indictment.
The 27 people charged in the scheme include Olympic basketball players, officials at the US Department of Health’s Office of the Inspector General told ABC News. Of those charged, one has pleaded guilty, officials said.
Eddin Orlando Santiago-Cordero, aka “Guayacan,” is alleged to be one of the unlicensed wholesale distributors, according to the indictment. Decades before he faced charges in the scheme, he was on Puerto Rico’s Olympic roster, an HHS-OIG spokeswoman told ABC News.
Early Wednesday, federal authorities arrested several people allegedly involved in the operation in Puerto Rico and in Florida, an HHS-OIG spokeswoman said.
More than 100 different drugs — many of which are needed by those taking them — were part of the drug diversion scheme, charging documents said. These drugs include various HIV+ drugs, insulin, thyroid drugs, antipsychotic/schizophrenia drugs, alcohol and opioid addiction drugs, blood thinners, asthma and COPD drugs, IV antibiotics to treat serious infections like meningitis or sepsis, estrogen hormone replacement therapy, malaria drugs, popular obesity and diabetes drugs including Ozempic and Mounjaro, as well as drugs used for erectile dysfunction and enlarged prostate.
Department of Health and Human Services headquarters, February 9, 2024, in Washington, DC
J. David Ake/Getty Images
The drugs are seized before they reach stores, often stored in resealable plastic bags without markings — and crucially, without the conditions necessary to maintain the drug’s safety and effectiveness, charging documents say. One example cited in court documents is insulin, which must be refrigerated.
“It becomes difficult, if not impossible, for regulators such as the FDA, law enforcement, or end users to know whether a prescription drug package actually contains the correct drug or the correct dosage” after the drug is diverted, court documents said. “Law enforcement officials, regulators, and end users will never know if a prescription drug is tampered with, stored in inappropriate conditions, or exposed to potential side effects.”
Nearly $21 million in fraudulent funds — just shy of $14 million from benefits sold by selling false and diverted prescriptions and more than $7.6 million from false Medicare and Medicaid claims — were netted in the alleged scheme, according to court documents.
The alleged operation is part of an “alarming” and “growing” trend, HHS-OIG special agent in charge of the New York Regional Office Naomi Gruchacz told ABC News in an exclusive interview before the takedown she helped lead.
“The motivation often behind these schemes is greed,” Gruchacz said. “They make financial profits. Greed takes over and even when communities are put at risk, they are ignored – even though it often happens in the same communities that health providers need to serve.”
Because syndicates like these operate outside the official channels, it’s not only difficult to track where the drugs are being dispensed or what they’re considered to be — it’s also difficult to track where prescriptions are diverted to, and into the hands of, HHS. -The OIG spokesperson said.
The co-conspirators of the operation “sold prescription drugs in resealable clear plastic bags without adequate labeling and instructions,” paid each other in cash, and sent shipments of drugs diverted through the United States Postal Service “as well as private and commercial carriers using them. fictitious name and address,” the charging document said.
“We have seen in other investigations that sometimes these drugs are sold on legitimate wholesale distribution websites,” Gruchacz said.
Such syndicates sometimes collect drugs from rationed patients and sell their own prescriptions for kickbacks, he said.
“It harms the patient we’re talking about, on the front end – the patient who has to take the drug, and on the back end if the patient accidentally receives the diverted drug,” Gruchacz said. “We don’t know how it’s stored. We don’t know if it’s expired.”
Attorney information for Santiago-Cordero and the other defendants was not available.
