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U.S. Department of Health and Human Services

Inspections, Compliance, Enforcement, and Criminal Investigations

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July 1, 2010: Pharmacy Owner Sentenced to Over 4 Years for Health Care Fraud, Aggravated Identity Theft and Conspiracy to Misbrand Drugs

 

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Food and Drug Administration 
Office of Criminal Investigations

 


 

             U.S. Department of Justice Press Release

 

 

For Immediate Release
July 1
, 2010

www.usdoj.gov/usao/md

 

U.S. Department of Justice

AUSA Vickie E. Leduc or Marcia Murphy

(410) 209-4885

 


CASE CAUSED FDA TO ISSUE ALERT IN 2008 ABOUT SUSPICIOUS DRUGS


Baltimore, Maryland - U.S. District Judge Marvin J. Garbis sentenced Pamela Arrey, age 49, of Glenelg, Maryland, a licensed pharmacist, today to 57 months in prison followed by three years of supervised release for health care fraud, aggravated identity theft, and conspiracy to misbrand pharmaceuticals. Judge Garbis also entered an order that Arrey forfeit her home and pay restitution of $505,745.89.

 

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Nicholas DiGiulio, Office of Inspector General of the Department of Health and Human Services, Philadelphia Region which includes Maryland; and Special Agent in Charge Thomas P. Doyle, Food & Drug Administration – Office of Criminal Investigations, Metro Washington Field Office which includes Maryland.


“Evidence that Pamela Arrey was making fraudulent claims to health care programs and relabeling prescription drugs purchased in large drums from an unlicensed supplier caused the Food and Drug Administration to issue an alert to customers in 2008 not to use drugs distributed by her pharmacy,” said U.S. Attorney Rod J. Rosenstein. “When drugs are taken out of their original containers and relabeled, customers cannot verify their authenticity and expiration date. The sentence imposed on Ms. Arrey holds her accountable for committing fraud and putting at risk the health of her customers.”


According to her guilty plea, Arrey owned and operated two pharmacies trading as the Medicine Shoppe, located on
Liberty Road and Reisterstown Road in Baltimore. From January 2003 to July 2008, Arrey identified patients who had filled prescriptions at her pharmacies and for whom the physician authorized refills that had never been requested. Arrey then claimed reimbursement from health care benefit programs, using patients’ personal identifying information, for “refills” of those prescriptions, for which no prescription drugs were ever dispensed to customers. Arrey’s pharmacies fraudulently obtained approximately $505,745 through this scheme. The proceeds of the scheme were deposited into her Medicine Shoppe Pharmacy bank account, which Arrey also used to pay the mortgage on her Glenelg home.


In addition, Arrey misbranded and relabeled prescription drugs she had purchased in large drums from an unlicensed supplier, for resale in her pharmacies. Arrey admitted that she filled prescription orders for pharmacy customers with misbranded pharmaceuticals, including Metformin, an oral diabetes medications used to help control blood sugar levels, and Gabapentin, an anti-epileptic medication used to treat seizures.


On July 7, 2008, the Maryland Board of Pharmacy conducted a surprise inspection of the Medicine Shoppe pharmacy on Liberty Road and recovered 11 drums of misbranded pharmaceuticals, which contained over 200,000 misbranded pills. On July 29, 2008 federal agents searched the pharmacies and Arrey’s home. Agents recovered drugs from the pharmacies with expiration dates removed and others with altered labels. Agents seized more controlled substances from Arrey’s home, including Oxycodone, Fentanyl, Adderall and Kadian, all of which were expired.


United States Attorney Rod J. Rosenstein thanked Assistant United States Attorneys Sandra Wilkinson and Tonya Kelly Kowitz, who prosecuted the case.