LOUISVILLE, Ky. – United States Attorney John E. Kuhn, Jr. this week charged several defendants and businesses, all tied to a multi-million-dollar internet scheme to dispense medications to customers without a valid prescription, with ten criminal charges. The indicted charges include an internet pharmacy conspiracy, conspiracy to distribute misbranded drugs, distributing misbranded drugs, mail fraud conspiracy, wire fraud conspiracy, health care fraud, engaging in the unlicensed wholesale distribution of prescription drugs, aggravated identity theft, conspiracy to commit money laundering, and obstruction of a criminal investigation.
According to the indictment, beginning in June of 2009 and continuing until at least April of 2012, defendant Philip Michael caused prescription drugs to be provided to customers of the website RX Limited. Specifically, through Aracoma Pharmacy and MEDS 2 GO Pharmacy, Michael filled and shipped various prescription drug orders to customers, for RX Limited and other internet websites, located across the United States and in the Western District of Kentucky, who did not have a valid prescription. These prescription drug orders were shipped to various states, which by law, required a valid prescription, prior to the drugs being dispensed. Customers would receive a prescription without ever seeing or speaking with a physician or medical practitioner, rendering the prescription invalid. Rather, customers would merely choose which prescription drug he or she wanted and complete an online medical questionnaire. The website operator would then send the completed online medical questionnaire by electronic means to an issuing doctor, including Eutan Laing, John Burlington, Edward Kaplan, and others known and unknown by the Grand Jury. (Physicians Burlington and Kaplan have pleaded guilty to charges in the Southern District of New York.) The drug would be prescribed without verifying the customers’ medical complaint, having an adequate patient history, performing a mental or physical exam, using appropriate diagnostic or laboratory testing, and providing a means to monitor the customer’s response to the medication. Then the invalid prescription would be filled by MEDS 2 Go or Aracoma, and shipped to customers across the United States.
During the course of the Internet Pharmacy Scheme, bank accounts controlled by Michael allegedly received approximately $4,000,000 from website operators, and others known and unknown to the Grand Jury. Physicians Laing, J.N.B., E.S.K., and others, were allegedly paid by website operators via wire transfers in excess of $800,000.
Further, MEDS 2 GO is charged with distributing misbranded drugs as the medications were not safe for use except under the supervision of a practitioner licensed by law to administer the drugs. Dispensing of Soma - a muscle relaxant, Ultram – a painkiller, and Fioricet – a treatment for tension headaches without a valid prescription caused the drugs to become misbranded.
Additionally, Michael is charged with defrauding a health care benefit program by submitting a fraudulent claim for payment to Humana Insurance Company for dispensing medication to P.R. which was never dispensed.
Also, Michael is charged with aggravated identity theft for using the name, date of birth and other identifying information for P.R. and the name and NPI number of A.S., a physician, to submit a fraudulent claim for payment.
In addition, proceeds from alleged criminal activities are subject to forfeiture to the United States. This includes, but is not limited to, an annuity and life insurance policy, vehicles associated with defendants Philip Michael and Meds 2 Go (2011 Jeep Grand Cherokee, 2011 Cadillac Escalade, 2008 Toyota Sequoia, and 2007 Chevy Corvette), a money judgement not less than 4 million dollars.
In the event of a conviction, the potential penalties range from 2 years to 20 years in prison for each specific count, a $250,000 fine for each count, and supervised release for a period of three years. The aggravated identity theft charge carries a minimum penalty of 2 years.
The case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb, and it results from an investigation conducted by the U. S. Food and Drug Administration, Office of Criminal Investigations, the Kentucky State Police and the West Virginia State Police.
The charge of a person by Federal Indictment is an accusation only and that person is presumed innocent until and unless proven guilty
Those charged were: Philip E Michael II of Alum Creek, West Virginia, and his business MEDS 2 GO, Inc. later known as MEDS 2 GO Express Pharmacy, Inc.; physician Euton Laing, of Piscataway, New Jersey, who is licensed to practice medicine in New Jersey, and was employed by RX Limited – a website selling prescription drugs over the internet; Mark Reinhard of Cross Lanes, West Virginia, who is charged with being an unlicensed wholesale distributor of prescription drugs; and Joetta Kuhn (of no familial relation to U.S. Attorney John Kuhn) of Louisville, Kentucky, who is charged with obstructing a criminal investigation.