June 20, 2016: R.I. Businessman Pleads Guilty to Running International Scheme to Label and Sell Misbranded Drugs
PROVIDENCE, R.I. – Arif Diwan, 60, owner of Lifescreen LLC, a Cranston, R.I., based company that labeled, advertised, and sold drugs and pharmaceutical products under the brand name “LifeLogic,” pleaded guilty in federal court in Providence today to conspiring with others to purchase drugs manufactured in India and other countries, repackaging and relabeling them making it appear that they were manufactured in the United States and Europe, and had been approved by the United States Food and Drug Administration (FDA), and then reselling them.
According to court documents, between 2012 and 2015, Diwan received and filled numerous orders for high-cost pharmaceutical products, including a number of products used in the treatment of cancer. Diwan admitted that he rebranded and relabeled drugs manufactured in India, including adding bogus FDA codes and markings to make it appear that the drugs had been manufactured in the United States or Europe and were approved for sale by the FDA. The drugs were shipped by Diwan to customers in numerous countries. Diwan did not sell misbranded and mislabeled drugs in the United States.
Diwan’s guilty plea before U.S. District Court Chief Judge William E. Smith to conspiracy to engage in false labeling of pre-retail medical products, money laundering and immigration fraud is announced by United States Attorney Peter F. Neronha and George M. Karavetsos, Director of FDA’s Office of Criminal Investigations (FDA OCI).
“FDA is recognized around the globe for ensuring that drugs are safe and effective. Criminal rings that falsify drugs’ origins to give the appearance of FDA approval put the public’s health at risk,” said George M. Karavetsos, Director of FDA’s Office of Criminal Investigations. “We will investigate and bring to justice those who compromise the security of the pharmaceutical supply chain wherever they may be.”
According to court records, an investigation by FDA OCI and the United States Attorney’s Office for the District of Rhode Island determined that Diwan ordered large quantities of drugs manufactured by Sara International, a drug manufacturing company located in India, and had the drugs transported to the home of a co-conspirator in Belgium. Once in Belgium, the co-conspirator, Bart DeRidder, affixed fraudulent labels designed by and manufactured at the direction of Arif Diwan onto the products. The labels indicated that the drugs were manufactured by LifeLogic at a facility in Puerto Rico. The packaging also contained bogus FDA codes and markings to make it appear as if the drugs had received FDA approval. No such facility exists in Puerto Rico. Bart DeRidder has been charged by Belgian authorities in connection with this matter and is facing criminal prosecution in Belgium.
Additionally, the investigation revealed that Arif Diwan created and provided fraudulent Certificates of Origin, attesting to the country of origin of the drugs, and fraudulent Certificates of Analysis, falsely attesting to the purity, strength, manufacture dates and expiration dates of the drugs. The certificates are heavily relied upon in the pharmaceutical industry and by Government entities to ensure the safety and efficacy of the products.
In addition, the investigation revealed that Diwan illegally transferred funds out of the United States to promote his illegal activity, including a January 2014 sale of the drug Caelyx to a purchaser in the United Arab Emirates.
In a related matter, in May 2012, Diwan filed a petition with the United States Citizen and Immigrations Services seeking permission for an Egyptian national to obtain a work visa, to allow the individual to enter the United States for the purpose of employment with Lifescreen. Diwan claimed that the person would be employed as a manager at a Lifescreen biopharmaceutical plant in Puerto Rico. The petition was approved and the person entered the United States in November 2012. Lifescreen did not, at any time, have or operate a biopharmaceutical plant in Puerto Rico. The investigation determined that Arif Diwan fraudulently submitted the immigration petition in exchange for payments made to him by the Egyptian national’s brother, a business associate of Diwan.
Arif Diwan is scheduled to be sentenced by U.S. District Court Chief Judge William E. Smith on September 16, 2016.
The case is being prosecuted by Assistant U.S. Attorneys Lee H. Vilker and Zachary A. Cunha.
United States Attorney Peter F. Neronha and George M. Karavetsos, Director of FDA’s Office of Criminal Investigations, thank the United States Department of State, Internal Revenue Service Criminal Investigation, Interpol, Europol and the Belgian Federal Judicial Police for their cooperation and efforts during this investigation.
Jim Martin (401) 709-5357
Email links icon
on Twitter @USAO_RI