Canadian company ordered to forfeit millions in drug mislabeling scheme

August 4, 2018

A British Columbia, Canada, company was fined $150,000 and ordered to forfeit millions of dollars, and three Canadian men were fined and sentenced to probation for misbranding prescription drugs and money laundering conspiracy, U.S. Attorney Scott W. Brady said Tuesday.

U.S. District Judge Cathy Bissoon ordered Quantum Solutions, SRL, to pay a $150,000 fine and forfeit $4,235,000, prosecutors said.

British Columba residents Tony Lee, 41, of Vancouver; Billy Lee, 43, of White Rock; and Tarnjeet Uppal, 37, of Surray were each sentenced to three years probation and a fine of $55,000.

Quantum, registered in Barbados, bought prescription drugs made for foreign markets and sold wholesale quantities to three pharmacists in Western Pennsylvania. The pharmacies were not identified.

None of the prescription drugs met FDA approval because they were made and labeled for use outside of the United States, Brady said.

Quantum purchased the drugs from suppliers in Turkey, Great Britain and other countries. The defendants arranged for these misbranded drugs to be sent to a re-shipper in the United Kingdom. The UK re-shipper was instructed to unpack the drugs, repack them in several small packages, put misleading labeling and shipping documentation on them and understate the dollar value of the contents to create the appearance to U.S. Customs and Border Protection that the drugs were health care products for the personal use of the addressee, prosecutors said.

The small packages were sent to Washington state and New York state re-shippers known to the U.S. Attorney, where they were once again unpacked and repacked for delivery in the United States. Wholesale quantities of these misbranded drugs intended for use in foreign markets were purchased by three pharmacists in Western Pennsylvania. The wire transfers, checks and credit card payments from the pharmacists traveled from Western Pennsylvania to Canada and Barbados.

None of the re-shippers were licensed in the United States.

“Distributing prescription drugs produced and labeled for use outside of the United States within our borders not only violates federal law but also threatens the health and safety of our citizens,” Brady said. “We are committed to investigating and prosecuting any drug company that illegally circumvents the regulated process for the distribution of prescription drugs.”

“Criminals who distribute misbranded prescription drugs from outside the U.S. supply chain put the health of all U.S. consumers at risk,” said Mark S. McCormack, special agent in charge of the FDA’s Criminal Investigations’ Metro Washington Field Office. “Our skilled cybercrime investigators will continue to disrupt and dismantle illegal prescription drug distribution networks.”

“The role of IRS-Criminal Investigation in a case like this is to follow the money, which in turn allows us to disrupt and dismantle the organization,” said Guy Ficco, special agent in charge of the IRS-Criminal Investigation. “The defendants who perpetrated this scheme put the American public at risk. By providing our financial expertise, IRS-CI is committed to working with our partners at the FDA and the U.S. Attorney’s Office to see to it that criminals like this are stopped.”

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