Inspections, Compliance, Enforcement, and Criminal Investigations
April 4, 2008: Greek National Indicted For Selling Counterfeit, Misbranded and Unapproved Prescription Drugs to Internet Pharmacies and Undercover Agents
Illegally Imported Drugs Found to Make Some Recipients Ill
DENVER – Troy A. Eid, United States Attorney for the District of Colorado, Jeffrey Copp, Special Agent in Charge of the Immigration and Customs Enforcement (ICE) office in Colorado, and Larry Sperl, Special Agent in Charge of the Food and Drug Administration’s Office of Criminal Investigations (FDA OCI) Kansas City Field Office, announced that GEORGIOS XYDEAS, age 47, a Greek national, appeared in U.S. District Court in Denver today for a detention hearing. At the hearing U.S. Magistrate Judge Michael J. Watanabe ordered XYDEAS to be held without bond pending trial. XYDEAS had previously made his initial appearance in U.S. District Court on March 27, 2008, where he was advised of the charges pending against him. He was arraigned on April 1, 2008.
XYDEAS’ prosecution is a culmination of a three-year investigation by ICE, the FDA/OCI and the United States Attorney’s Office into the operation of internet pharmacies that do not adhere to U.S. law, and their foreign sources of supply that send thousands of counterfeit, misbranded and unapproved prescription drugs into the U.S. illegally each year. The investigation netted two firsts of its kind.
Cooperation with the Chinese government: ICE and the FDA/OCI special agents, and a prosecutor from the United States Attorney’s Office, assisted the Chinese government in prosecuting Chinese citizens who were several sources of supply of the misbranded or counterfeit drugs. The U.S. team in this case was the first contingent allowed to interview by proxy a suspect inside a Chinese detention facility, which directly led to identifying XYDEAS and several other foreign sources of supply. In addition, Chinese authorities arrested 13 people and seized about 400 kilograms (880 pounds) of counterfeit Tamiflu and more than 40 tons of raw chemical materials. This operation was touted by the Chinese authorities as one of the top three U.S.-Chinese cooperative law enforcement actions of 2006.
The unique facet to XYDEAS’ investigation and prosecution: Nearly all the components in this scheme, except for the U.S. customers, were foreign based, operating offshore. Although the foreign-based aspect of this crime makes U.S. investigation and prosecution especially difficult, XYDEAS is being held accountable for his part in the scheme.
An arrest warrant based on a sealed criminal complaint filed in Denver was issued January 28, 2008. On February 28, 2008, a federal grand jury in Denver returned an indictment, charging XYDEAS with forty three (43) criminal counts, including conspiracy, trafficking in counterfeit goods, importing controlled substances, misbranding of any food or drug, and smuggling goods into the U.S. On March 8, 2008, XYDEAS was arrested in New York City after he was denied entry into Panama.
The XYDEAS portion of the investigation was initiated in part after the FDA issued a consumer warning in February 2007, stating that people ordering specific drugs from certain internet pharmacies were receiving the powerful anti-psychotic drug identified as Haloperidol, the active pharmaceutical ingredient found in Haldol, instead of the medication they ordered, which included Ambien, Xanax, Lexapro, and Ativan. The warning stated that the misbranded drugs were shipped from Greece. The FDA found that some recipients who took the misbranded drugs became ill, and had to seek medical attention. (The FDA warning can be found at http://www.fda.gov/bbs/topics/NEWS/2007/NEW01564.html). Further investigation led agents to XYDEAS.
According to the affidavit in support of the criminal complaint and the indictment, XYDEAS was allegedly found to be a source of supply of unapproved prescription medications, including some controlled substances, for several internet website operators. With assistance from private industry, ICE and FDA/OCI agents determined that XYDEAS was illegally distributing in the U.S. misbranded or counterfeit prescription medication, such as Cialis, Ambien, Haldol, Xanax, Viagra, Ativan and Meridia. On numerous occasions recipients received purported prescription medication which contained Haloperidol (a foreign version of Haldol), instead of the actual prescription drugs ordered by customers. During a lengthy undercover operation, agents from ICE and FDA/OCI received several thousand tablets of counterfeit and unapproved drugs sent by or at the direction of XYDEAS.
“Counterfeit and misbranded prescription drugs are pouring into America from China and other countries. We're just beginning to learn how dangerous these drugs can be,” said U.S. Attorney Troy Eid. “Working these investigations takes unprecedented international cooperation, but we're committed to going the distance.”
“Importing any counterfeit, misbranded or unapproved pharmaceutical drug is a significant danger to the American public in many respects,” said Jeffrey Copp, special agent in charge of the ICE Office of Investigations in Denver. “ICE will continue to partner with other law enforcement agencies to eliminate this threat, and to bring to justice the organized criminals who profit.” Copp oversees a four-state area which includes: Colorado, Montana, Utah and Wyoming.
“Those that deal in counterfeit pharmaceuticals are solely motivated by greed and they prey upon an unsuspecting public with no regard for potentially placing the public's health at risk. We will continue to work with our law enforcement partners to pursue drug counterfeiters to the fullest extent of the law,” said Terry Vermillion, Director, FDA Office of Criminal Investigations.
*Count two: conspiracy to import a Schedule IV controlled substance, which carries a penalty of not more than 5 years in federal prison, and up to a $250,000 fine.
*Count three: conspiracy to distribute and possess with intent to distribute Schedule IV controlled substances, which carries a penalty of not more than 3 years imprisonment, and up to a $250,000 fine.
*Count four and five: trafficking in counterfeit pharmaceutical drug, which carries a penalty of not more than 10 years in federal prison, and up to a $2,000,000 fine.
*Count six: importation of Scheduled IV controlled substances, which carries a penalty of not more than 5 years imprisonment, and up to a $250,000 fine.
*Count seven through nineteen: introduction and delivery for introduction of unapproved new drugs into interstate commerce, which carries a penalty of which carries a penalty of not more than 3 years imprisonment, and up to a $250,000 fine.
*Count twenty through twenty nine: introduction and delivery for introduction of misbranded drugs into interstate commerce, which carries a penalty of not more than 3 years imprisonment, and up to a $250,000 fine.
*Count thirty through forty two: importation of merchandise contrary to law, which carries a penalty of not more than 20 years imprisonment, and up to a $250,000 fine.
This case was investigated by agents from Immigration and Customs Enforcement (ICE), and the Food and Drug Administration’s Office of Criminal Investigations (FDA OCI), with support from the U.S. State Department and Panamanian officials and assistance from the Eli Lilly Pharmaceutical Co., the Sanofi-Aventis Pharmaceutical Co., the British Medicines and Health Care Regulatory Agency (MHRA).
This investigation was derived from the previous investigations of Northstar Pharmaceuticals (Criminal Case # 05-CR-376-RB) and Stephan FU (Criminal Case # 06-MJ-01180).
The case is being prosecuted by Assistant U.S. Attorney Ken Harmon.
The charges are only allegations, and the defendant is presumed innocent unless and until proven guilty.