This is a rough list of the recent ICE press releases mentioning counterfeit and pharmaceutical. It is quite clear that the overwhelming majority of counterfeit busts involve Viagra and other erectile dysfunction drugs, a problem that will probably resolve itself once the Pfizer patents on Viagra expire.
In my quick read of the ICE press releases, I found just 12 pharmaceutical counterfeiting cases in the ICE press releases from 2009 to May 2012, with 14 defendants.
- 13 of the 14 defendants were men.
- 7 defendants appeared to be US citizens. 7 had foreign or mixed nationalities.
- Of the 12 cases, 9 involved erectile dysfunction drugs such as Viagra, Cialis or Levitra.
- The one women defendant was distributing counterfeit Botox.
- One case involved a weight loss product known as “alli”
- In only one case were the counterfeits non-lifestyle drugs (involving Plavix, Zyprexa, Casodex, Tamiflu, and Acricept).
Summary of 2012 Cases
Benny Carmi, and Moshe Dahan, Israeli citizens, Sentenced for smuggling coutnerfeit and misbranded pharmaceuticals into the United States, including Cialis, and a controlled substanced marketed in the US as Meridia. (It is not obvious the case involved counterfeit of registered trademarks, or a variety of other FDA violations concerning labeling and distributing products). Carmi was sentenced to 10 months in prison, a criminal fine of $30,000 and a forfeiture of $50,000. Dahan was sentenced to one year of probation, a criminal fine of $15,000 and a forfeiture of $15,000.
Kil Jun Lee, a former South Korean law enforcement officer. Arrested for smuggling 29,827 counterfeit Viagra tablets, 8,993 counterfeit Cialis pills and 793 phony Levitra tablets. (Coverage: http://jezebel.com/kil-jun-lee/)
Summary of 2011 Arrests
Curtis Henry of Rochester. Arrested in 2010 and sentenced in 2012 for importing and distributed counterfeit Viagra and Cialis in to the United States — three years probation and restitution in amount of $13,377.
Randy Hucks of Philadelphia. Indicated for trafficing in counterfeit pharmaceuticals, including Cialis and Viagra. During the course of the investigation, a total of 10,188 tablets of counterfeit Viagra and 3,040 tablets of Cialis were received by Hucks.
Shengyang Zhou, aka “Tom,” of Kunming, Yunnan, China. Trafficking in counterfeit versions of the pharmaceutical weight-loss drug known as “Alli.” Sentenced in 2011 to seven years and three months in prison, following a 2010 criminal complaint.
En Wang, owner of Jiao Long USAO Inc., a Houston-based company, in 2011 was sentenced in absentia to two years and nine months in federal prison, after he fled the country following a 2010 conviction for trafficking in counterfeit versions and misbranded Viagra.
Summary of 2010 cases
Kum Leung Chow, aka Lawrence Chow, pleaded guilty to the federal charges on June 28 and waws sentenced to twelve months in prison, for obtaining and distributing counterfeit Viagra and Cialis pharmaceutical drugs in the United States. Chow offered boxes containing four Viagra tablets and boxes containing eight Cialis tablets for $10 a box on two Internet websites. The retail cost for each Viagra tablet is about $20, while each Cialis tablet is about $15.20. Working in an undercover capacity, ICE agents purchased about 1,120 Viagra tablets and about 360 Cialis tablets from Chow via the Internet on March 25, 2009, and April 28, 2009.
Mark Hughes, of St. Louis, was indicted on multiple charges for allegedly importing and selling counterfeit and misbranded prescription drugs, including Viagra and Cialis.
Richard Fletcher, of Dallas, Texas, was sentenced to 12 months in prison for using the Internet to obtain and distribute counterfeit Viagra, Cialis and Levitra pharmaceutical drugs.
Summary 2009 cases
Rana J. Hunter, of Marina Del Rey, Calif., was convicted in 2009 on eight criminal counts, including two counts of smuggling goods into the United States and two counts of knowingly distributing HGH for a use unauthorized by law. Evidence at the trial included that Hunter’s business, Westgate Distributors, also claimed to offer Botulinum toxin type A, marketed under the Allergan brand name Botox. A subsequent laboratory analysis revealed the HGH was genuine, but the substance being sold as Botox contained no evidence of the Botulinum toxin. Part of the case involved Hunter’s use of identify theft, including in one case the name of a deceased judge. In 2010 Hunter received a sentence of four years in prison.
Nicholas David Lundsten, of Spring Lake Park, Minnesota and Patrick James Barron, of Fridley, Minnesota, were indicted for distributing more than 15,000 misbranded drugs to customers. Both men were charged with introducing misbranded drugs into interstate commerce and importing non-narcotic Schedule IV controlled substances. The indictment alleges the defendants introduced and delivered 3,600 pills falsely labeled as Cialis; 1,582 pills falsely labeled as Propetia; 10,419 pills falsely labeled as Viagra; and 340 pills falsely labeled as Levitra. In fact, all the pills contained the active pharmaceutical ingredients of the drugs they imitated, but they were not the authentic product as labeled and were not made by the respective manufacturer.
Kevin Xu, a citizen of the People’s Republic of China, was sentenced to 6.5 years in prison for distributing counterfeit and misbranded pharmaceuticals in the United States. This was one of the few cases that involved something other than erectile dysfunction drugs. While ICE referred to Xu as “a significant supplier of counterfeit pharmaceutical due to his ability to manufacture large quantities of various counterfeit pharmaceuticals, and packaging that was identical to authentic pharmaceuticals,” his 2007 income from Internet sales was reported at just $232,568. According to ICE, “chemists employed by the pharmaceutical companies and the Forensic Chemistry Center of the FDA determined that the counterfeit drugs manufactured by Xu contained less than the active ingredient listed on the label, and contained unknown impurities. Drugs mentioned in the case included: Plavix is a drug used to treat blood clots. Zyprexa is a drug used to treat schizophrenia. Casodex is used to treat prostate cancer. Tamiflu is used to treat influenza, commonly referred to as the flu; and Aricept is used to treat Alzheimers.
Links to ICE press releases
2012
- 05/18/12 Rochester, NY. An upstate New York man was sentenced Wednesday to three years probation and ordered to pay restitution in the amount of $13,377 for importing counterfeit Viagra and Cialis tablets into the United States.
According to court documents, between January and June 2011, Curtis Henry, 53, of Rochester, ordered more than 700 counterfeit Viagra and Cialis tablets from a source in China. After receiving the counterfeit pharmaceutical tablets, Henry sold them in Rochester.
http://www.ice.gov/news/releases/1205/120518rochester.htm - 04/24/12 Two Israeli citizens pleaded guilty Monday and were sentenced for smuggling counterfeit and misbranded pharmaceuticals into the United.
ST. LOUIS, Mo. — Two Israeli citizens pleaded guilty Monday and were sentenced for smuggling counterfeit and misbranded pharmaceuticals into the United States, including the erectile dysfunction drug marketed in the United States as Cialis®. Benny Carmi, 59, and Moshe Dahan, 39, appeared April 23 before Federal District Court Judge Carol E. Jackson in the Eastern District of Missouri. According to court documents and testimony from Monday’s hearings, both men operated an Internet business in Israel that used multiple websites, including “allpillsrx.com,” “newpharm.net,” “pharmacy-on-line.com,” “pharmacy-on-line.com,” and “pharmacy-pal.com,” to illegally sell large amounts of prescription drugs to U.S. purchasers. About 9,029 separate drug shipments to were sent to purchasers in the United States, generating about $1,475,363 in gross proceeds.
Carmi and Dahan were prosecuted after the government conducted a series of undercover purchases on some of the defendants’ Internet websites and ordered prescription drugs and controlled substances, including the drug marketed in the United States as Meridia®, without providing a valid prescription from a qualified health care professional. Typically, packages containing drugs were imported to St. Louis, Mo. from China and India, with the exterior packaging falsely describing the contents of the shipments as “gifts” that had “no commercial value.”
Laboratory test results of samples of the drugs obtained through defendants’ Internet websites revealed that these drugs were not genuine versions of the drugs that had been manufactured in FDA-approved drug manufacturing plants in accordance with federal law. Moreover, some of defendants’ drugs were sub-potent, containing less than the amount of active drug ingredient than what was specified in the labeling for the drugs.
Carmi admitted that he introduced misbranded prescription drugs into interstate commerce, smuggled prescription drugs into the United States, and sold counterfeit prescription drugs. Carmi was sentenced to 10 months in prison and must pay a criminal fine of $30,000 and forfeit $50,000 to the United States. Dahan also admitted to smuggling prescription drugs into the United States. He was sentenced to one year of probation and is required to pay a $15,000 fine. Dahan paid a forfeiture of $15,000 to the United States.
Note: Reading the press release, it is not obvious that the violations involved counterfeiting of protected trademarks, so much as a variety of other issues, such as distributing generic drugs to people without prescriptions, selling products not manufactured in FDA approved plants, or distributing substandard drugs. http://www.ice.gov/news/releases/1204/120424stlouis.htm
- 03/07/2012. Los Angeles, CA. Feds arrest suspected large-scale smuggler of counterfeit sex drugs. Man interdicted at LAX with nearly 40,000 phony erectile dysfunction pills in his golf bag, luggage.
Kil Jun Lee, 71, was arrested after U.S. Customs and Border Protection (CBP) officers at LAX discovered erectile dysfunction pills in his luggage when he returned from a trip to Korea Feb. 25. The criminal complaint stated that Lee’s luggage contained 29,827 counterfeit Viagra tablets, 8,993 counterfeit Cialis pills and 793 phony Levitra tablets, all concealed in aluminum foil wrapped packets. According to the complaint, when HSI special agents at LAX questioned Lee about whether the medication was for his personal use, he said if he used all of the pills it would kill him because he had a heart condition. A subsequent analysis of some of the seized pills by CBP’s Los Angeles-area forensics lab revealed that none of them matched the ingredients contained in the genuine products.
http://www.ice.gov/news/releases/1203/120307losangeles.htm - 02/21/12 Operation Global Hoax II nets tens of thousands of counterfeit goods in 43 country operation. More than 30,000 parcels were detained and more than 150,000 counterfeit or pirated items were seized during Operation Global Hoax II by customs officials including toys, pharmaceuticals, electronic goods, clothing, DVDs, watches, mobile phones and handbags, as well as other illicit goods such as cannabis seeds, anabolic steroids and amphetamines. http://www.ice.gov/news/releases/1202/120221washingtondc.htm
2011
- 11/02/2011. New York man pleads guilty to importing counterfeit pharmaceuticals. An upstate New York man has pleaded guilty to a charge of attempting to import counterfeit Viagra and Cialis tablets into the United States for resale. According to court documents, between January and June 2011, Curtis Henry, 52, of Rochester, ordered more than 700 counterfeit Viagra and Cialis tablets from a source in China. After receiving the counterfeit pharmaceutical tablets, Henry sold them in Rochester. http://www.ice.gov/news/releases/1111/111102rochester.htm
- 09/30/11 IPR Center participates in annual worldwide scan of international mail for illicit pharmaceuticals sold on the Internet
WASHINGTON — In the largest operation of its kind, 81 countries took part in an international week of action targeting the online sale of counterfeit and illegal medicines. This operation resulted in dozens of arrests and the seizure of 2.4 million potentially harmful medicines worldwide worth $6.3 million.Focusing on websites supplying illegal and dangerous medicines, Operation Pangea IV is the largest Internet-based action of its kind coordinated by INTERPOL, the World Customs Organization (WCO), Permanent Forum of International Pharmaceutical Crime (PFIPC), Heads of Medicines Agencies Working Group of Enforcement Officers (HMA WGEO), the pharmaceutical industry and online payment systems providers in support of International Medical Products Anti-Counterfeiting Taskforce (IMPACT).
Pangea IV operations within the United States resulted in 92 seizures, consisting of 57,052 pills, including counterfeit Cialis and Viaga, with a manufacturer suggested retail price of $925,520.
With 53 countries reporting their results to date, 13,495 websites engaged in illegal activity have been taken down. In addition, 45,419 packages were inspected by regulators and customs officials, and 7,901 packages were seized containing more than 2.4 million illicit and counterfeit pills originating from 48 countries – including antidepressants, antibiotics, steroids, arthritis medicine, lifestyle drugs and diet pills. Seized pharmaceuticals are estimated to be worth $6.3 million. During the operation, 55 individuals were arrested and are under investigation for a range of offenses, including illegally selling and supplying unlicensed or prescription-only medicines. Some 36 search warrants were executed.
http://www.ice.gov/news/releases/1109/110930washingtondc2.htm - 6/8/2011, Philadelphia, PA, Philadelphia man indicted for trafficking in counterfeit pharmaceuticals.
PHILADELPHIA – A local man was indicted on Thursday by a federal grand jury for trafficking in counterfeit pharmaceuticals, including Cialis and Viagra tablets.
Randy Hucks, 49, is charged with one criminal count of trafficking in counterfeit goods. The case is being investigated by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), and the Food and Drug Administration. According to the indictment, Hucks was conducting business under the name Fashionista Emporium, registered at a post office box where he received pharmaceuticals from China. During the course of the investigation, a total of 10,188 tablets of counterfeit Viagra and 3,040 tablets of Cialis were received by Hucks.On March 30, ICE HSI agents conducted a controlled delivery of a seized U.S. Postal Service international parcel containing more than 10,000 tablets of counterfeit Viagra destined for an address in Philadelphia. Shortly after the package was delivered, Hucks took possession of it and transported the package to his residence in Philadelphia.
http://www.ice.gov/news/releases/1106/110609philadelphia.htm - 6/3/2011, DENVER – A Chinese national was sentenced on Thursday to serve seven years and three months in federal prison for trafficking in counterfeit versions of the pharmaceutical weight-loss drug known as “Alli.”
Shengyang Zhou, aka “Tom,” 31, of Kunming, Yunnan, China, was ordered to pay restitution totaling $504,815.39 to the victims of his crime, including an emergency room doctor from Texas who suffered a mild stroke from ingesting the counterfeit medication. Following his prison sentence, Zhou will be deported. According to court documents, between December 2008 and March 2009 the FDA issued a series of alerts on its website concerning tainted weight-loss pills and counterfeit drugs. Initial alerts focused on “Superslim,” “2 Day Diet,” and Meitzitang, among other purported weight-loss products believed to have been imported from China and marketed as dietary supplements or nutritional products. The FDA stated in these initial alerts that the items posed a very serious health risk to consumers, because, based on analysis, they were found to be drugs that contained undeclared active pharmaceutical ingredients, including Sibutramine (a non-narcotic controlled substance).
Sibutramine can cause high blood pressure, seizures, tachycardia, palpitations, heart attack or stroke. In later alerts, the FDA warned the public about counterfeit versions of the brand-name drug Alli, a popular over-the-counter weight-loss drug manufactured by GlaxoSmithKlein. The alerts indicated that these counterfeit drugs were also being imported into the United States from China and did not contain the proper active pharmaceutical ingredient for the authentic product; instead they contained dangerous levels of Sibutramine. The counterfeit versions of Alli were being sold in the United States, among other ways, through Internet websites, including online auction websites, such as eBay. During the course of the investigation, law enforcement agents identified Zhou as the trafficker and importer into the United States of these counterfeit and unapproved purported weight-loss-related drugs. Zhou also identified himself as the manufacturer of the counterfeit Alli.
http://www.ice.gov/news/releases/1106/110603denver.htm - 04/04/11 Chinese counterfeit drug distributor sentenced in absentia to nearly 3 years.
HOUSTON – A Chinese national, who fled the country after a jury convicted him of trafficking in counterfeit pharmaceuticals, was sentenced last week in absentia to two years and nine months in federal prison.
En Wang, 32, the owner of Jiao Long USAO Inc., a Houston-based company, was sentenced on March 28 in absentia to 33 months in federal prison without parole. In addition to the prison term, Wang was also ordered to serve a three-year-term of supervised released after his prison term. The court postponed ruling on whether to order restitution to Pfizer Pharmaceuticals, the manufacturer of Viagra.
After a jury trial, Wang was convicted of conspiracy to traffic in counterfeit drugs and causing the introduction of counterfeit and misbranded drugs into interstate commerce. The four-count indictment filed against Wang in February 2010 charged him with conspiring with others in the People’s Republic of China to traffic in counterfeit goods and trafficking in counterfeit and misbranded pharmaceuticals. During the two-day trial, the jury heard evidence that two packages containing about 6,500 loose Viagra tablets were seized at a mail facility in San Francisco, Calif., in early January 2010. The loose Viagra tablets were in plastic bags and hidden inside a shoe box and a small box. The tablets did not have any prescription form inside or any instructions for use.
An inspection of Wang’s luggage revealed he had a large number of Viagra tablets hidden in a calcium bottle. The agent testified he obtained a search warrant for Wang’s residence and coordinated a controlled delivery of the two packages containing Viagra on Jan. 13, 2010. Wang signed for the delivered packages using the name Ken Wang. ICE HSI agents immediately executed a search warrant and found 300 additional loose Viagra tablets at the residence.
A chemist employed by Pfizer Pharmaceuticals Inc., the manufacturer of Viagra, testified that the Viagra tablets in the two packages as well as the tablets found inside Wang’s residence were counterfeit and contained a substance used to manufacture sheetrock. A Food and Drug Administration (FDA) chemist further testified that the Viagra tablets contained less than the active ingredient listed for Viagra. Viagra is an FDA-approved prescription drug to treat erectile dysfunction.
http://www.ice.gov/news/releases/1104/110404houston.htm - 1/28/2011, Denver, CO, Chinese national pleads guilty to trafficking counterfeit pharmaceutical weight-loss drug.
Sibutramine can cause high-blood pressure, seizures, tachycardia, palpitations, heart attack or stroke. In later alerts, FDA warned the public about counterfeit versions of the brand-name drug “Alli,” a popular over-the-counter weight-loss drug manufactured by GlaxoSmithKlein. The alerts indicated that these counterfeit drugs were also being imported into the United States from China; they did not contain the proper active pharmaceutical ingredient for the authentic product, but instead contained dangerous levels of Sibutramine. The counterfeit versions of Alli were being sold in the United States, among other ways, through internet websites, including online auction websites such as eBay.
During the course of the investigation, law enforcement agents identified Zhou as the trafficker and importer into the United States of these counterfeit and unapproved purported weight-loss-related drugs. Zhou also identified himself as the manufacturer of the counterfeit Alli. http://www.ice.gov/news/releases/1101/110128denver.htm
2010
- 11/15/2010 – Chinese counterfeit drug distributor sentenced to prison.
HOUSTON – A man from China was sentenced on Monday to 12 months and a day in prison for conspiring to distribute counterfeit pharmaceuticals, and trafficking in pharmaceuticals with false labeling and counterfeit trademarks. Kum Leung Chow, aka Lawrence Chow, 59, pleaded guilty to the federal charges on June 28 and sentenced on Monday to 12 months in prison.
The ICE HSI investigation began in January 2009 and revealed that Chow used a Hong Kong-based company named Kingdom International Enterprises LTD to obtain and distribute counterfeit Viagra and Cialis pharmaceutical drugs in the United States.
Chow offered boxes containing four Viagra tablets and boxes containing eight Cialis tablets for $10 a box on two Internet websites. The retail cost for each Viagra tablet is about $20, while each Cialis tablet is about $15.20. Working in an undercover capacity, ICE agents purchased about 1,120 Viagra tablets and about 360 Cialis tablets from Chow via the Internet on March 25, 2009, and April 28, 2009. Shipping documents accompanying the pharmaceuticals indicated they were exported from mainland China and Hong Kong. The pharmaceuticals were later analyzed by the trademark holders and the FDA Forensic Chemistry Center which indicated the pharmaceuticals were counterfeit. These counterfeit pharmaceutical products may have harmed the public if law enforcement were not involved in monitoring the Internet.
http://www.ice.gov/news/releases/1011/101115houston.htm - 11/18/2010, Jackson, MS, ICE partners with other law enforcement agencies in Mississippi to combat counterfeit pharmaceuticals· Between February and November 2010, numerous undercover purchases of illegal pharmaceuticals were made from convenience stores across the state. Among the products purchased were various prescription strength pain killers, antibiotics, birth control, supplements and other drugs not approved for sale in the United States.
http://www.ice.gov/news/releases/1011/101118jackson.htm - 09/03/10 Houston business owner convicted of trafficking counterfeit prescription drugs. Counterfeit Viagra contained substance used to manufacture sheetrock
En Wang, 32, the owner of Houston-based Jiao Long USA Inc, was charged in a four-count indictment in February of conspiring with others in the Peoples Republic of China (PRC) to traffic in counterfeit goods and trafficking in counterfeit and misbranded pharmaceuticals.
During the two-day trial, the jury heard evidence that two packages containing approximately 6,500 loose Viagra tablets were seized at a mail facility in San Francisco, Calif., in early January. The loose Viagra tablets, which were hidden in plastic bags inside a shoe box and a small box, did not contain any prescription forms or any instructions for use. The labeling affixed to the packages indicated they were being sent to a Ken Wang on Ashford Chase Drive in Houston.An ICE HSI agent testified that he was notified of the seizure by a U.S. Customs and Border Patrol (CBP) officer assigned to the San Francisco mail facility. Trial testimony revealed that a person named En Wang with the same Ashford Chase Drive address had recently returned to the United States on an international flight originating in China. An inspection of Wang’s luggage revealed he had a large amount of Viagra tablets hidden in a calcium bottle.
After obtaining a search warrant for Wang’s residence, ICE HSI coordinated a controlled delivery on Jan. 13 of the two packages containing the Viagra tablets. After Wang signed for the packages, ICS HIS agents searched the residence and encountered 300 additional loose Viagra tablets.
A chemist employed by Pfizer Pharmaceuticals Inc., the manufacturer of Viagra, testified the Viagra tablets in the two packages and the tablets found inside Wang’s residence were counterfeit and contained a substance used to manufacture sheetrock.
http://www.ice.gov/news/releases/1009/100903houston.htm - 08/06/10 Missouri man indicted for importing and selling counterfeit drugs.
ST. LOUIS, Mo. – A local man was indicted on Friday on multiple charges for allegedly importing and selling counterfeit and misbranded prescription drugs, including Viagra® and Cialis®. The charges resulted from an investigation conducted by the U.S. Immigration and Customs Enforcement (ICE) Office of Homeland Security Investigations (HSI).
Mark Hughes, 47, of St. Louis, was indicted Aug. 6 by a federal grand jury in the Eastern District of Missouri on one count of smuggling goods into the United States, one count of trafficking in counterfeit goods, one count of selling misbranded drugs, and one count of mail fraud.
According to the indictment, in July 2006, Hughes began ordering large quantities of prescription and pharmaceutical drugs from sources in India and China without prescriptions for resale. Hughes is not licensed or authorized to sell and distribute prescription drugs and pharmaceuticals. To market and advertise some of the drugs, the indictment alleges that Hughes used business cards with a phone number listed. One card read: “Tired of kicking field goals and want to score a touchdown? GET YOURS TODAY! VIAGRA 100 mg CIALIS 20 mg $5 per pill.”
http://www.ice.gov/news/releases/1008/100806stlouis.htm - 04/23/10 Houston. Convicted counterfeit pharmaceutical distributor re-sentenced.
Kevin Xu, 38, was convicted following a jury trial on July 3, 2008, of conspiring to distribute counterfeit pharmaceutical drugs and causing the introduction of counterfeit and misbranded drugs into interstate commerce. In January 2009 he was sentenced to 78 months in federal prison without parole – 60 months for the conspiracy conviction to be served concurrently with 36 months for misbranding and trafficking in counterfeit drugs, and 18 months for one count of misbranding pharmaceutical drugs to be served consecutively. Xu appealed his convictions. On March 4, the 5th Circuit Court of Appeals affirmed his convictions on all counts except one. One substantive charge was found to have insufficient evidence to prove the pharmaceutical drug at issue in that charge was registered in the U.S. Patent and Trademark Office. The case was remanded to the district court for re-sentencing.
During the 11-month undercover investigation of Xu by agents with ICE and the FDA-OCI, Xu discussed with agents his ability to manufacture branded pharmaceutical drugs and packaging for the drugs. Xu provided an undercover agent with a list of 25 pharmaceutical drugs he could manufacture that included drugs manufactured and marketed exclusively by Pfizer Pharmaceuticals Inc., Eli Lilly Corporation, Hoffman La Roche, AstraZeneca and Sanofi-Aventis. Beginning in December 2006 and continuing through June 2007, Xu shipped Tamiflu, Plavix, Zyprexa, Aricept and Casodex to ICE agents in Houston that appeared identical to the drugs manufactured by the legitimate trademark holder. Thereafter, Xu traveled to Houston from China to meet with undercover agents to further discuss a venture to supply counterfeit pharmaceutical drugs that would ultimately be dispensed to the public.
Xu is considered to be a significant supplier of counterfeit pharmaceutical due to his ability to manufacture large quantities of various counterfeit pharmaceuticals and packaging that was identical to authentic pharmaceuticals. Chemists employed by the pharmaceutical companies and the Forensic Chemistry Center of the FDA have testified that the counterfeit drugs supplied by Xu contained active ingredients that varied from amounts listed on the label and contained unknown impurities. Agents discovered Xu had utilized the Internet and actually sold counterfeit drugs to citizens of the United States. These pharmaceuticals pose significant health risks. Records obtained during the investigation revealed Xu received more than $1.5 million from the sale of counterfeit pharmaceuticals during 2007.
http://www.ice.gov/news/releases/1004/100423houston.htm - 03/31/10 Counterfeit drug distributor sentenced to prison.
Richard Fletcher, 57, of Dallas, Texas, was sentenced to 12 months in prison by U.S. District Judge Lee Rosenthal for each of the two counts of conviction which are to be served concurrently. Additionally, the court ordered Fletcher to serve a three-year-term of supervised release during which he must pay $50,631 in restitution to the pharmaceutical companies. Fletcher previously pleaded guilty to the federal charges in March 2009.
A joint undercover investigation by ICE and FDA’s Office of Criminal Investigations was initiated in October 2007. The investigation established that Fletcher used the Internet to obtain and distribute counterfeit Viagra, Cialis and Levitra pharmaceutical drugs. These FDA-approved prescription drugs are used to treat erectile dysfunction, and are registered trademarks on the principal register in the U.S. Patent and Trademark Office. Viagra, Cialis and Levitra are manufactured and distributed exclusively by Pfizer Pharmaceuticals, Eli Lilly, and Bayer Corporation, respectively.
Via an Internet site, Fletcher offered Viagra tablets for $1 each, Cialis tablets for $1.20 each, and Levitra tablets for $1.40 each. The retail cost for these drugs is $11, $11.75 and $13, respectively. In response to inquiries from undercover agents regarding the quality of the tablets, Fletcher responded that the pills looked just like the original, including imprints on the pills and branded packaging. Undercover ICE agents purchased about 2,000 Viagra tablets and about 500 Cialis tablets from Fletcher over the Internet on Feb. 11, 2008, May 15, 2008 and June 18, 2008. Packaging containing the pharmaceuticals indicated the drugs were exported from China and also contained Fletcher’s Dallas address. The pharmaceuticals were later analyzed by the trademark holders and FDA’s Forensic Chemistry Center, and determined to be counterfeit.
http://www.ice.gov/news/releases/1003/100331houston.htm
2009
- 11/20/2009. National Intellectual Property Rights Coordination Center partners take part in international week of action on illegal pharmaceuticals. ICE, CBP, FDA, DEA and USPIS target drugs sold illegally on the Internet.
WASHINGTON – An international week of action targeting the Internet sale of counterfeit and illicit medicines and its threat to public health has resulted in many arrests and the seizure of thousands of potentially harmful medical products across five continents.
In the United States, the partners of the Virginia-based National Intellectual Property Rights Coordination Center (IPR Center) conducted operations from Nov. 16-20 at mail facilities throughout the United States, targeting counterfeit, substandard or tainted drugs coming into the United States.
Federal agents and officers from U.S. Immigration and Customs Enforcement (ICE), U.S. Customs and Border Protection (CBP), the Food and Drug Administration (FDA), the U.S. Drug Enforcement Administration (DEA), and the U.S. Postal Inspection Service (USPIS) targeted over 7,000 suspect packages in New York, Newark, N.J., Miami, Memphis, Tenn., Louisville, Ky., Cincinnati and San Francisco resulting in 724 packages being detained for further examination. Of those, 48 have been formally seized to date.In addition to these examinations, the FDA issued 22 Warning Letters about illegal activity occurring on 136 independent Web sites that are now posted on the FDA Web site. To date, 90 of those Web sites or domain names have been permanently suspended.
Involving a record 24 countries and co-ordinated under the umbrella of INTERPOL and the World Health Organization’s (WHO) International Medical Products Anti-Counterfeiting Taskforce (IMPACT), Operation Pangea II involved law enforcement agencies from the participating countries, as well as the Permanent Forum on International Pharmaceutical Crime (PFIPC), the Universal Postal Union (UPU) and the World Customs Organization (WCO).
During the operation, international Internet monitoring revealed 751 Web sites engaged in illegal activity, including some offering controlled or prescription-only drugs, 72 of which have now been taken down. Worldwide, more than 16,000 packages were inspected by regulators and customs, 995 packages were seized and nearly 167,000 illicit and counterfeit pills – including antibiotics, steroids, lifestyle drugs and diet pills, confiscated. A total of 22 individuals are under investigation for a range of offenses, including illegally selling and supplying unlicensed or prescription-only medicines.
http://www.ice.gov/news/releases/0911/091120washington.htm - 10/30/2009. Federal jury convicts Los Angeles woman who sold Human Growth Hormone over the Internet. Evidence also showed she illegally imported fake Botox.
The investigation began in March 2007 after ICE agents in Los Angeles received a lead from ICE’s Cyber Crimes Center in Virginia. During the ensuing probe, CBP officers intercepted numerous packages containing vials of HGH and counterfeit Botox from China that were addressed to the Marina Del Rey mailbox listed on the Internet as Westgate’s business address. The parcels were mislabeled variously as synthetic hair pieces, plastic molds and “sample iron oxide.”
As part of the investigation, ICE undercover agents posing as a supplier for clinics and spas, contacted the phone number listed for Westgate on the Internet. The undercover agents ultimately made two buys, including multiple vials of HGH and a substance purported to be Botox. A subsequent laboratory analysis revealed the HGH was genuine, but the substance being sold as Botox contained no evidence of the Botulinum toxin.
http://www.ice.gov/news/releases/0910/091030losangeles.htm - 10/07/2009. Two Minnesota men indicted for selling and importing counterfeit medications
MINNEAPOLIS, Minn. – Two Twin Cities men were indicted in federal court Wednesday for allegedly selling and importing more than 15,000 counterfeit drugs and mislabeled medications.
A federal grand jury in the District of Minnesota returned an indictment Oct. 7 against Nicholas David Lundsten, 26, of Spring Lake Park, and Patrick James Barron, 29, of Fridley, for allegedly releasing more than 15,000 misbranded drugs to customers. Both men were charged with introducing misbranded drugs into interstate commerce and importing non-narcotic Schedule IV controlled substances.
The indictment alleges the defendants introduced and delivered 3,600 pills falsely labeled as Cialis®; 1,582 pills falsely labeled as Propetia®; 10,419 pills falsely labeled as Viagra®; and 340 pills falsely labeled as Levitra®. In fact, all the pills contained the active pharmaceutical ingredients of the drugs they imitated, but they were not the authentic product as labeled and were not made by the respective manufacturer.
http://www.ice.gov/news/releases/0910/091007minneapolis.htm - 3/23/2009. Dallas man convicted for distributing counterfeit pharmaceutical drugs
HOUSTON – A Dallas man was convicted Monday of conspiring to distribute counterfeit pharmaceuticals, and trafficking in pharmaceuticals bearing false labeling and counterfeit trademarks.
Richard Fletcher, 57, of Dallas, Texas, pleaded guilty to both federal offenses at a hearing March 23 before U.S. District Judge Lee Rosenthal. Fletcher faces a maximum sentence of 10 years in federal prison, without parole, a $250,000 fine, and no more than three years of supervised release after the prison term at sentencing, which is set for June 23.
The investigation proved that Fletcher used the Internet to obtain and distribute counterfeit versions of Viagra®, Cialis® and Levitra® pharmaceutical drugs. These name-brand drugs are FDA-approved prescription drugs that are used to treat erectile dysfunction. The investigation began in October 2007. Fletcher was identified as the owner of an Internet website which offered Viagra tablets for $1 per tablet, Cialis for $1.20 each, and Levitra for $1.40 each. The retail cost for Viagra, Cialis and Levitra tablets range from $11 to about $13. In response to inquiries regarding the quality of the tablets, Fletcher indicated the pills looked just like the original with the brand-name imprint on the pill and counterfeit packaging. Undercover ICE agents purchased about 2,000 Viagra tablets and about 500 Cialis tablets from Fletcher via the Internet on Feb. 11, May 15 and June 18, 2008. Packaging containing the pharmaceuticals indicated the drugs were exported from China and also contained Fletcher’s Dallas address. The drugs were later analyzed by the trademark holders and the FDA’s Forensic Chemistry Center, and determined to be counterfeit.
http://www.ice.gov/news/releases/0903/090320portland.htm - 01/15/09 Counterfeit pharmaceutical drugs distributor sentenced to 6 1/2 years in prison.
HOUSTON – A citizen of the People’s Republic of China was sentenced Thursday to 6½ years in prison for distributing counterfeit and misbranded pharmaceuticals in the United States.
At a hearing this afternoon, U.S. District Judge Sim Lake sentenced Kevin Xu, 36, to 78 months in federal prison without parole. This is the maximum sentence under the applicable U.S. Sentencing Commission guideline range for conspiring with others in the People’s Republic of China to traffic in counterfeit pharmaceutical drugs and introducing counterfeit and misbranded drugs into interstate commerce.
Xu owned Pacific Orient International Ltd., a foreign company based in the People’s Republic of China. He used his company to export and distribute counterfeit pharmaceutical drugs into the United States and the United Kingdom. ICE and the FDA conducted an undercover investigation of Xu beginning in November 2006. Xu discussed with undercover agents his ability to manufacture branded pharmaceutical drugs and packaging for the drugs. He also provided an undercover agent with a list of 25 pharmaceutical drugs he could manufacture that included trademarked drugs manufactured and marketed exclusively by Pfizer Pharmaceuticals Inc., Eli Lilly Corp., Hoffman La Roche, AstraZeneca and Sanofi-Aventis. Xu later shipped Tamiflu, Plavix, Zyprexa, Aricept and Casodex to agents in Houston that appeared identical to the drugs manufactured by the legitimate trademark holder.
http://www.ice.gov/news/releases/0901/090115houston.htm
2008
- 11/13/08 National Intellectual Property Rights Coordination Center partners take part in international day of action on illegal pharmaceuticals
ICE, CBP, FDA, and USPIS scan international mail for drugs sold illegally on the Internet. Representatives of the IPR Center partner agencies assisted CBP personnel as they processed international mail, particularly pharmaceuticals, at the four facilities. The participating agencies coordinated the expertise of their respective units to target, interdict and investigate the illicit importation of goods that pose a health and safety risk to consumers.
As a result of the surge operation, approximately 635 international mail parcels were physically examined; 18 were seized. The contents of the seized parcels included counterfeit Viagra, Cialis, steroids and Xanax. The IPR Center partner agencies will review the seizures to develop evidence for possible use in the initiation of criminal investigations and the eventual crackdown on U.S. and international-based pharmaceutical websites. http://www.ice.gov/news/releases/0811/081113washington.htm - 07/29/2008. Los Angeles woman arrested after allegedly selling Human Growth Hormone and counterfeit Botox over the Internet.
LOS ANGELES – A federal jury has convicted a Los Angeles-area woman for smuggling Human Growth Hormone (HGH) into the United States, then selling it over the Internet to doctors and spas across the country.
Rana J. Hunter, 61, of Marina Del Rey, Calif., was convicted Thursday on eight criminal counts, including two counts of smuggling goods into the United States and two counts of knowingly distributing HGH for a use unauthorized by law. Investigators determined some of Hunter’s customers were located as far away as Arkansas.
The remaining criminal counts involved identify theft. According to investigators, Hunter used stolen identities to further her Internet sales scheme. She obtained some of the stolen identities from newspaper obituaries. One of the stolen identities belonged to a deceased Los Angeles Superior Court Judge. Hunter has been imprisoned since her arrest in July 2008.
In addition to illegally importing and distributing HGH, evidence presented during the trial indicated Hunter’s business, Westgate Distributors, also claimed to offer Botulinum toxin type A, marketed under the Allergan brand name Botox.
The investigation began in March 2007 after ICE agents in Los Angeles received a lead from ICE’s Cyber Crimes Center in Virginia. During the ensuing probe, CBP officers intercepted numerous packages containing vials of HGH and counterfeit Botox from China that were addressed to the Marina Del Rey mailbox listed on the Internet as Westgate’s business address. The parcels were mislabeled variously as synthetic hair pieces, plastic molds and “sample iron oxide.”
As part of the investigation, ICE undercover agents posing as a supplier for clinics and spas, contacted the phone number listed for Westgate on the Internet. The undercover agents ultimately made two buys, including multiple vials of HGH and a substance purported to be Botox. A subsequent laboratory analysis revealed the HGH was genuine, but the substance being sold as Botox contained no evidence of the Botulinum toxin.
http://www.ice.gov/news/releases/0807/080729losangeles.htm - 3/5/2008. Alleged distributor of counterfeit pharmaceuticals extradited from Asia. Suspect is the first foreign national to be extradited to the U.S. on such charges
HOUSTON, Texas – Randy Gonzales, 40, a citizen of the Republic of the Philippines, was extradited to the United States from Bangkok, Thailand, for conspiring to import and distribute counterfeit pharmaceutical drugs into the United States.
Gonzales was extradited to the United States Feb. 28 after a criminal complaint charged Gonzales with participating in a conspiracy to import and distribute counterfeit Viagra and Cialis pharmaceutical drugs. He was arrested by the Royal Thai Police March 7, 2007, with a formal ceremony held in Thailand Nov. 27 to execute his extradition. Gonzales’ extradition was the result of an investigation by ICE and the Food and Drug Administration. According to the criminal complaint, beginning in July 2005, Gonzales was allegedly advertising the sale of Viagra and Cialis pharmaceutical drugs over the internet. Viagra is a pharmaceutical drug manufactured by Pfizer Pharmaceuticals and Cialis is a pharmaceutical drug manufactured by Eli Lilly Company. Both are considered lifestyle pharmaceutical drugs used to treat erectile dysfunction.
The criminal information alleges that through e-mail communications with Gonzales, agents acting in an undercover capacity discovered Gonzalez had secreted large quantities of loose counterfeit Viagra and Cialis pills in packages of general merchandise that had arrived in Houston from China. The packages had been sent to Mohammad Gawasmmah, an individual who operated RU Sophisticated, a general merchandise store located on Harwin Drive in Houston. Gonzales, through e-mail communications, told agents that Gawasmmah and another individual named Fayez Aledous could deliver counterfeit pills. During the year-long investigation, agents made several undercover purchases of counterfeit Cialis and Viagra pills and seized more than 60,000 counterfeit Viagra pills and 15,000 counterfeit Cialis pills. The loose counterfeit Viagra and Cialis tablets were packaged in plastic bags along with bottles and counterfeit labeling. Once the counterfeit pills arrived in Houston, the pills were then placed in bottles and the counterfeit labeling was affixed to the bottles. The counterfeit Viagra and Cialis pills are valued at more than $776,000.
Mohammad Gawasmmah and Fayez Aledous were convicted after entering guilty pleas to conspiracy to traffic in counterfeit good and trafficking in counterfeit pharmaceuticals. Aledous was convicted Oct. 3, 2007, and Gawasmmah was convicted May 11, 2007, of the same charges and have been sentenced to 20 months and 21 months, respectively.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.
https://www.ice.gov/news/releases/0803/080305houston.htm
MISC ICE “intellectual property rights” cases
Apparently ICE uses the term “intellectual property rights” quite loosely, perhaps to pad statistics in its reports to Congress.
- One example involves a case of mislabeled fish.
10/2/2008. Two Virginia residents found guilty of conspiracy involving the importation and sale of falsely labeled fish. http://www.ice.gov/news/releases/0810/081031washington.htm
Peter Xuong Lam, of Fairfax, Va., was found guilty late yesterday by a federal jury in Los Angeles of conspiring to import mislabeled fish in order to avoid federal import tariffs, the Justice Department announced. Lam also was found guilty on three counts of dealing in fish that he knew had been imported contrary to law. Arthur Yavelberg, of Reston, Va., a co-conspirator, also was found guilty of conspiracy to trade in misbranded food. This case was a result of an investigation by U.S. Immigration and Customs Enforcement (ICE) Washington field office. . .
Although the fish imported by Virginia Star and International Sea Products was labeled and imported as sole, grouper, flounder, snakehead, channa and conger pike, a type of eel, DNA tests revealed that the frozen fish fillets were in fact Pangasius hypophthalmus. Pangasius hypophthalmus is a fish in the catfish family marketed under approved trade names including swai or striped pangasius.
An anti-dumping duty or tariff was placed on Pangasius hypophthalmus imports from Vietnam in January 2003, after a petition was filed by the catfish farmers of America. The petition alleged that this fish was being imported from Vietnam at less than fair market value. None of the species names the defendants used to label the imported fish were subject to any federal tariffs.
Further evidence presented at trial showed that Kich Nguyen, the head of the Vietnamese producer, Cafatex, imported the fish to his son, Henry Nguyen who oversaw Virginia Star, International Sea Products and a third company, Silver Seas, of which Yavelberg was titled president.
Lam then knowingly marketed and sold millions of dollars worth of the falsely labeled and illegally imported fish to seafood buyers in the United States as basa, a trade name for a more expensive type of Vietnamese catfish, Pangasius bocourti, and also as sole. All of the fish sold was invoiced to match the false labels that were still on the boxes. The jury convicted Yavelberg of marketing the fillets, without necessarily knowing they had been mislabeled.
Peter Xuong Lam was later sentenced to 63 months [1] in federal prison. This was an interesting case, but it does not seem appropriate for ICE to report this under its intellectual property rights enforcement actions.