Guilty pleas in a complex, $33-million drug importing scheme

Persons associated with SB Medical Inc. and TC Medical Group (both based in Toronto, Canada and St. Michael, Barbados) have pleaded guilty to charges filed last December by the Dept. of Justice on behalf of the FDA’s Office of Criminal Investigations, Homeland Security Investigations, Washington, DC, and the United States Postal Inspection Service.

The indictment (Case No. 1:14-cr-397) charged five individuals, along with co-conspirators, in smuggling shipments of pharmaceuticals and medical devices from Europe, the Middle East and India during 2011-2014. In a fairly elaborate scheme, bulk shipments were broken down to smaller ones, then drop-shipped, with false documentation, to a variety of addresses in the US. Recipients at those locations then relabeled the parcels (in order to appear to be US-sourced) and shipped them to doctors and clinics in the US. Pharma brands included Remicade, Lucentis, Mabthera, Botox and others. En route, the products were handled in an unregulated manner and stored in unregulated locations. Payments were collected in the US and then transferred to Canada to further the false pretences, it is alleged.

The Dept. of Justice put a value of $33 million on the shipments. Sentencing will come later.

Just as that smuggling scheme was settled, DoJ’s Southern District of Ohio filed charges against another group of three men who diverted $393 million worth of drugs, obtained from “a network of illegal and unlicensed sources in New York, Florida and California” in a “massive” case of fraud and unlicensed drug distribution. It’s not clear where the drugs came from, or whom they were sold to, but the diversion allegedly included generating fake pedigree and distributor-of-record documents. The case centers around a company called Minnesota Independent Cooperative (Eagan, MN).