Inspections, Compliance, Enforcement, and Criminal Investigations
November 20, 2009: Camano Island Man Indicted for Scheme to Steal and Sell Diabetic Supplies
Former Pharmacy Employee Conspired with Florida Resident to Sell Stolen Insulin and Test Strips
MICHAEL RALPH WORLEY, 43, of Camano Island, Washington, and DONALD ALAN PEPIN, 55, of Jupiter, Florida, were charged late yesterday by a federal grand jury in Seattle, Washington, with Conspiracy to Commit Wire Fraud and Engage in Interstate Transportation of Stolen Property and six counts of Wire Fraud. WORLEY is also charged with two counts of Interstate Transportation of Stolen Goods, while PEPIN is charged with two counts of Receipt of Stolen Goods. The conspiracy involved the theft of diabetic supplies, including insulin, from an Everett, Washington, Pharmacy. The insulin and other supplies were then sold to PEPIN for distribution to the public. Both men will be summoned to appear in federal court in Seattle for arraignment.
According to the indictment, WORLEY worked as a Pharmacy Technician at Providence Medical Center’s Pacific Campus Pharmacy in Everett. Part of his job was to order insulin and other diabetic supplies for the pharmacy. WORLEY was placed on leave and ultimately terminated in November 2008, when an internal audit revealed large amounts of insulin being ordered for that pharmacy. The indictment alleges that WORLEY stole both insulin and diabetic test strips, used for checking insulin levels, and sold them on Ebay. After those initial sales, WORLEY was contacted via email by PEPIN who wanted to directly purchase insulin and test strips. PEPIN even sent WORLEY lists of the insulin products he wanted and the price he was willing to pay. The prices were just a fraction of the wholesale cost of the items. Over the course of the conspiracy WORLEY is alleged to have stolen $366,054 worth of insulin from Providence Hospital. The retail value of that insulin was more than $1.2 million.
PEPIN received the insulin in Florida, and then resold it through his business: First Medical Resources, Inc. The insulin was not refrigerated during shipping or storing, which made it unsafe for use. The insulin and test strips were being sold by PEPIN to other small drug distributors (some licensed and some not licensed) and to smaller pharmacies who may not have been aware that First Medical Resources, Inc. was not a licensed drug wholesaler in the State of Florida. Shipments of insulin were sent from WORLEY to PEPIN as recently as November 2008. The indictment outlines a number of payments in excess of $2,000 from PEPIN to WORLEY for various shipments of insulin beginning in June 2005.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.
Conspiracy is punishable by up to five years in prison and a $250,000 fine. Wire Fraud is punishable by up to 20 years in prison and a $250,000 fine. Both Transportation of Stolen Property and Receipt of Stolen Property are punishable by up to ten years in prison and a $250,000 fine.
According to the Food and Drug Administration, millions of Americans suffer from diabetes and need to use testing strips and insulin on a daily basis. In order for most brands of insulin to be safe and effective, it needs to be kept refrigerated. In a recent unrelated case, insulin was reported stolen from a semi-truck in North Carolina. The insulin was resold to the public at various pharmacies in the southeast United States. Several diabetics reported to the FDA that they were sickened after injecting themselves with the insulin that had been stored improperly. All diabetic supplies are required to carry contact information for the manufacturer so that consumers can report any problem with the products.
This case is being investigated by the Food and Drug Administration Office of Criminal Investigations (FDA-CI), U.S. Immigration and Customs Enforcement (ICE), the Drug Enforcement Administration (DEA), the Everett Police Department and the Washington State Board of Pharmacy.The case is being prosecuted by Assistant United States Attorney Patricia Lally.