United States v. Michael Starks (E. D. Ark.). On December 16, 2002, Michael Starks was sentenced to 18 months in prison, to be followed by 2 years of supervised release, after entering a plea to one felony count of conspiracy to introduce misbranded drugs into interstate commerce with the intent to defraud and mislead. In addition, Starks agreed to a civil forfeiture to the United States of $300,000 in proceeds from his unlawful business.
Starks and his associates established an extensive internet marketing system of "do it yourself" kits for the manufacture of an unapproved new drug, Gamma Hydroxy Butyrate ("GHB"). GHB had been promoted variously as a sleep aid, a sexual stimulant, and a treatment for steroid-induced rages. It was also promoted as a steroid alternative and, as such, has been widely abused by athletes. In an effort to avoid state and federal laws, Starks marketed not the finished drug, but a kit containing the components of GHB: Gamma Butyrolactone (GBL) and sodium hydroxide. GBL is an industrial solvent for degreasing engines and stripping the finish from wood floors; sodium hydroxide, a highly caustic chemical, is an active ingredient in household cleaning products, including Drano. By combining these two ingredients with a specific amount of water, the resulting chemical reaction produced GHB.
Starks touted the kits as "exothermic reaction kits," and provided disclaimers warning against ingestion. However, Starks simultaneously posted on electronic bulletin boards false testimonials characterizing the product as "the purest" or "best" GHB for recreational drug use. Thousands of the kits were sold across the U.S. Canada, and Australia.
United States v. Various Articles of Drug (S.D. Fla). On June 18, 2003, a U.S. District Judge entered a Consent Decree of Condemnation and Destruction for the seized unapproved new drugs and misbranded drugs. After posting a bond and paying costs, the Claimant, Global Source Management and Consulting, Inc. ("Global Source"), must destroy all of the drugs. In addition, Global Source agreed to cease manufacturing, processing, packing, labeling, holding, or distributing "Vitamin Hut Scientific Cholesterol Support Program" or any similar red yeast rice product containing lovastatin or any other drug product that is a new drug unless and until an approved new application is in effect for such product. The decree also contains letter shutdown and recall provisions as well as the arbitrary and capricious standard of review.
U.S. v. Courtney, Accurso, Smith, Ravis, and Paraghamia, (W.D.Mo.). On December 5, 2002, Robert Courtney, a pharmacist, was sentenced to 30 years in prison, and required to pay a $25,000 fine as well as $10.4 million in restitution because of his sale of diluted drugs. Courtney had pleaded guilty in February to 8 counts of product tampering and 6 counts each of misbranding and adulterating drugs, in violation of the Federal Food, Drug, and Cosmetic Act (FDCA).
Between March and August of 2001, Courtney, among other things, diluted numerous chemotherapy drugs that were ordered from his pharmacy and misrepresented the strength of those drugs to physicians. More than 50 patients were originally identified as having been victims of this scheme; it eventually was determined that more than 4,000 patients may have had their prescriptions diluted over a ten year period. In many cases, patients received drugs that were less than 10% of the prescribed strength; several of those patients died.
In a related matter, on January 10, Walter J. Accurso consented to the filing of a complaint alleging that he violated the FDCA during the years 2000 and 2001 by causing the misbranding of various drugs. The drugs included Paraplatin, Lupron, Zofran, Taxol, Gemzar, Zocor, and Lipitor. Accurso acknowledged that he acquired the drugs knowing they had been stolen from a hospital; he then sold them at a discount to various pharmacists. Accurso paid a $25,000 civil judgment and forfeited to the an additional $8,650 in cash proceeds.
In addition, Stuart Smith (a hospital employee) and Gary Ravis (a pharmacist) pled to related charges, based on the sale of drugs stolen from a hospital. Ravis entered a plea to one count of receipt of stolen property; he received a probationary sentence, a $250,000 fine, and 2,500 hours of community service. Smith likewise entered a plea to a charge of the unlawful sale of drugs and he received a sentence of 6 months in home detention, $50,000 in restitution to the hospital, a $25,000 fine, and 1,000 hours of community service. A former pharmaceutical sales representative, Aran Paraghamian, also entered a plea to a one count of interstate transportation of stolen property and received a sentence of 3 years probation, a fine of $60,000, and 600 hours of community service for participation in this scheme.
United States v. Allyn Norman (W.D.N.Y.). On January 27, 2003, a Magistrate Judge sentenced Allyn Norman, M.D., to a $5000 fine and a $25 special assessment fee for violating the Federal Food, Drug, and Cosmetic Act (FDCA). While conducting clinical testing of the drug Rofecoxib pursuant to an investigational new drug application, Dr. Norman fabricated the data and records relating to six patients as well as information about the disposition of the drug. Dr. Norman submitted falsified data by fabricating names, birthdates, and including non-existent "patients." The study monitor noticed the discrepancies and questioned him. Dr. Norman then admitted that he had fabricated the information. Dr. Norman pled guilty in October 2002. Pursuant to the plea agreement, Dr. Norman entered into a separate disqualification agreement with FDA which provides, among other things, that he is not entitled to receive investigational drugs, animal drugs, biologics, devices, or food additives, or to conduct further studies of FDA-regulated investigational products.
United States v. Undetermined quantities of articles of drug (D. Md.). On April 14, 2003, the United States District Court entered a Consent Decree against defendants Perry L. Hitt, Hit Products, and Organic Diversions, for their manufacture and distribution of misbranded and unapproved new drugs. The defendants promote their products ("street drug alternatives") to mimic the euphoric effects of illegal street drugs. By signing the Decree, the defendants avoid a civil contempt proceeding for their distribution of street drug alternatives (marketed as Tribal Visions, Maui Hybrid, Honey Blonde, India Black, Mean Green, Mistic Hybrid, Chocolate Thai Oil, Chill Smoke, and Kind Budz) in violation of two court orders entered in this case in the summer of 2001. The Decree requires the defendants to disgorge $25,000 in proceeds and limits the ways in which they can market their products in order to prevent further violations.
United States v. Jason Vale (E.D.N.Y.). On July 21, 2003, a federal jury in Brooklyn, New York convicted Jason Vale, president of the company Christian Brothers Contracting Corporation ("Christian Bros."), of three counts of criminal contempt. On April 20, 2000, in a civil suit brought by the United States against Vale and his company, Judge John Gleeson entered a preliminary injunction ordering Vale and Christian Bros., during the pendency of the civil suit, not to directly or indirectly sell, distribute, package, label, or promote Laetrile, also known as amygdalin, "Vitamin B-17," or apricot pits. On November 16, 2000, Judge Gleeson ended the civil suit by entering a consent decree permanently ordering Vale and Christian Bros. not to sell, distribute, package, label, or promote Laetrile. For years before the civil suit was brought, Vale, through Christian Bros., had sold Laetrile over the Internet in order to cure and prevent cancer, and saturated the public with a massive Internet and "spam" E-mail marketing campaign which guaranteed persons a cancer free life if they used his products.
FDA determined that Vale set up a shell corporation in Arizona through which he continued to sell Laetrile in defiance of the Court's injunctions. The jury announced the guilty verdicts on July 21, 2003, following the conclusion of a week long trial. Sentencing is scheduled for April 23, 2004, before Judge Gleeson in Brooklyn.
United States v. Sean Zhang. On June 27, 2003, a United States District Judge sentenced Sean Zhang to the maximum sentence of 5 years in prison for mail fraud. Zhang had previously pled guilty to mail fraud in connection with his sale of 2,4-Dinitrophenol (DNP) as a drug for weight loss. DNP is a toxic substance commonly used as a pesticide; it is not approved by FDA for weight loss or any other indication. One of Zhang's customers died after ingesting the drug and another was hospitalized for two weeks. The Court ordered Zhang to pay $445 restitution to FDA for undercover purchases and $113,000 restitution to one of Zhang's customers for medical bills and lost wages. The Court also sentenced Zhang to three years of supervised release and ordered him to pay a special assessment of $100.