"Yes, [bad drugs] do get to the Eckerds and Walgreens of the world," Mann said.
Florida agents broke up what they called one of the nation's biggest pharmaceutical counterfeiting rings on Monday, arresting the alleged ringleader in his Weston mansion and 17 of his operatives, including his wife, brother-in-law and mother-in-law.
Drug wholesaler Michael A. Carlow headed a group that peddled tens of millions of dollars of phony, expired, relabeled and diluted medications to distributors for sale throughout the country in recent years, state officials said.
The state nabbed another man not part of the network, Jose Grillo of Miami, who investigators say was responsible for relabeling 11,000 boxes of a blood booster for cancer and AIDS patients to make it appear 20 times stronger than it really was. They said he and his cohorts made as much as $46 million. Starting before 6 a.m., the roundup in four counties was the first major arrest in a two-year investigation of fake and suspect drugs in Florida. As many as 100 others are still under investigation and may be arrested later, officials said.
"I have a smile on my face because today is the day in Florida we are clearly taking the position that enough is enough," Dr. John Agwunobi, the state secretary of health, said at a news conference. "We're going to drive out of Florida those parasites that would hurt our most vulnerable."
The 19 face charges including racketeering, conspiracy, organized fraud, grand theft and illegal drug sales, all felonies carrying penalties of five to 30 years in prison.
Unscrupulous wholesalers based mainly in South Florida have made the state a national hub of fake and adulterated medications, according to a statewide grand jury that is meeting on the issue. They aimed mainly at expensive, injectable drugs such as the blood boosters Procrit, Epogen and Neupogen, and the growth hormone Serostim.
But recently, agents have tied Florida wholesalers to adulterated medications for such everyday ailments as asthma and arthritis. Carlow's group peddled some or all of the phony bottles of cholesterol drug Lipitor from overseas that wound up in the country's drugstores this year, investigators said. As many as 200,000 bottles had to be recalled.
It's unclear how many of the bad drugs reached pharmacy shelves. Patients from California to Florida to New York have reported suspect medications. The state has seized at least $100 million worth.
Suspects had lavish lifestyles
"These are drugs our elderly rely on," Agwunobi said. "These are drugs our cancer patients rely on. These are drugs that are the difference between life and death."
Tampering with medicine has been so lucrative that many of those arrested lived in million-dollar homes. Four or five drove Hummer SUVs; others had Cadillac Escalades and Ferraris.
Agents arrested Carlow and his wife, Candace, an officer in at least one of his shell companies, at their $1.3 million Weston home. Among his possessions were two Harley motorcycles, a $760,000 Sea Ray yacht, a collection of guitars and a Dodge Viper sports car, agents said. On a prior visit to his house, investigators found a $249,000 Ferrari that Carlow bought eight days earlier.
Also arrested Monday were Carlow's brother-in-law, Thomas Atkins Jr. in Kissimmee, and mother-in-law Marilyn Atkins in Lake Worth.
Agents described Carlow, 50, as a "major player'' who organized a network of associates operating in as many as a dozen states.
"We felt we wanted to target the worst of the worst, and we felt Mr. Carlow fit that description," said Michael Mann, a lead investigator in the case for the Florida Department of Law Enforcement.
The group stole prescription drugs or bought them for pennies on the dollar from patients, doctors and pharmacists, according to a 95-page indictment unsealed Monday. Often, the drugs were expired, kept in hot car trunks instead of refrigerators, or were relabeled.
Carlow then sold the questionable drugs through one of a dozen or more shell companies he ran in Florida and at least six other states, agents said. They enlisted "straw men" to be company officers.
Drugs changed hands often
The network peddled drugs by forging paperwork showing prior owners of the shipments. The drugs often changed hands among wholesalers as many as 10 times before reaching drugstores or clinics that dispensed them.
Some of the firms that bought from Carlow were involved in the scheme, agents said. Others were unsuspecting. Most times, wholesalers sold the questionable drugs to one of three huge national distributors that supply virtually all drugs in the country.
"Yes, [bad drugs] do get to the Eckerds and Walgreens of the world," Mann said.
Carlow got into pharmaceutical wholesaling in 1994 and lost his license in June 2000 after he was arrested for buying drugs from the back of a van. But he continued selling illegally out of his house even after investigators began looking at his network last year, court records show.
"He got bigger and bigger and bigger,'' said agent Gary Venema, one of the lead investigators.
The network controlled the finances from South Florida. During nine months beginning last June, Carlow and his associates transferred more than $40 million from bank accounts in the names of the shell corporations to other accounts in Miami, Tennessee, Brazil, Argentina and Panama, the indictment says.
Carlow was jailed on $7 million bond. His attorney, Craig Brand, did not respond to messages left at his office. He previously told the South Florida Sun-Sentinel that Carlow denied knowingly passing on fake or tainted drugs.
Epogen vials relabeled
Grillo, 46, was in jail on $2 million bond. Investigators said he relabeled 110,000 vials of low-strength blood booster Epogen to make it appear to be of higher strength, the indictment said. Federal drug officials said the counterfeit vials could not be detected without careful scrutiny.
He bought boxes of the lower strength drugs from patients and pharmacists for a few hundred dollars each, stuck on new labels and sold them for as much as $4,600 each, agents said. Others assisted Grillo but have not been arrested." He was running the show on the Epogen," Venema said.
Several of the 19 arrested Monday had state drug wholesaling licenses, despite past criminal records that should have barred them from the business. One, Julio Cesar Cruz of Miami, a convicted cocaine smuggler, was arrested on Monday wearing an ankle bracelet because of a probation violation.
The prescription wholesale business attracted former marijuana and cocaine dealers, who discovered it was easier and less risky than illegal drugs.
"The penalties were weaker. The likelihood of getting caught was less,'' Mann said. Florida on July 1 began enforcing a new law that increases the penalties for illegal drug diversion, eventually requires wholesalers to document all prior owners of every shipment, and makes it harder to get a license. State officials think the law will shut down most of the 422 wholesalers in the state.
Agwunobi said unscrupulous wholesalers could stay in business simply by moving out of Florida unless federal officials and other states also crack down. The U.S. Food and Drug Administration announced a campaign to look at the problem last week.
"There's so much more that needs to be done," Agwunobi said. "We are not done."
http://www.sun-sentinel.com/news/local/southflorida/sfl-cdrugs22jul22,0,2614866.story?coll=sfla-news-sfla
Florida agents broke up what they called one of the nation's biggest pharmaceutical counterfeiting rings on Monday, arresting the alleged ringleader in his Weston mansion and 17 of his operatives, including his wife, brother-in-law and mother-in-law.
Drug wholesaler Michael A. Carlow headed a group that peddled tens of millions of dollars of phony, expired, relabeled and diluted medications to distributors for sale throughout the country in recent years, state officials said.
The state nabbed another man not part of the network, Jose Grillo of Miami, who investigators say was responsible for relabeling 11,000 boxes of a blood booster for cancer and AIDS patients to make it appear 20 times stronger than it really was. They said he and his cohorts made as much as $46 million. Starting before 6 a.m., the roundup in four counties was the first major arrest in a two-year investigation of fake and suspect drugs in Florida. As many as 100 others are still under investigation and may be arrested later, officials said.
"I have a smile on my face because today is the day in Florida we are clearly taking the position that enough is enough," Dr. John Agwunobi, the state secretary of health, said at a news conference. "We're going to drive out of Florida those parasites that would hurt our most vulnerable."
The 19 face charges including racketeering, conspiracy, organized fraud, grand theft and illegal drug sales, all felonies carrying penalties of five to 30 years in prison.
Unscrupulous wholesalers based mainly in South Florida have made the state a national hub of fake and adulterated medications, according to a statewide grand jury that is meeting on the issue. They aimed mainly at expensive, injectable drugs such as the blood boosters Procrit, Epogen and Neupogen, and the growth hormone Serostim.
But recently, agents have tied Florida wholesalers to adulterated medications for such everyday ailments as asthma and arthritis. Carlow's group peddled some or all of the phony bottles of cholesterol drug Lipitor from overseas that wound up in the country's drugstores this year, investigators said. As many as 200,000 bottles had to be recalled.
It's unclear how many of the bad drugs reached pharmacy shelves. Patients from California to Florida to New York have reported suspect medications. The state has seized at least $100 million worth.
Suspects had lavish lifestyles
"These are drugs our elderly rely on," Agwunobi said. "These are drugs our cancer patients rely on. These are drugs that are the difference between life and death."
Tampering with medicine has been so lucrative that many of those arrested lived in million-dollar homes. Four or five drove Hummer SUVs; others had Cadillac Escalades and Ferraris.
Agents arrested Carlow and his wife, Candace, an officer in at least one of his shell companies, at their $1.3 million Weston home. Among his possessions were two Harley motorcycles, a $760,000 Sea Ray yacht, a collection of guitars and a Dodge Viper sports car, agents said. On a prior visit to his house, investigators found a $249,000 Ferrari that Carlow bought eight days earlier.
Also arrested Monday were Carlow's brother-in-law, Thomas Atkins Jr. in Kissimmee, and mother-in-law Marilyn Atkins in Lake Worth.
Agents described Carlow, 50, as a "major player'' who organized a network of associates operating in as many as a dozen states.
"We felt we wanted to target the worst of the worst, and we felt Mr. Carlow fit that description," said Michael Mann, a lead investigator in the case for the Florida Department of Law Enforcement.
The group stole prescription drugs or bought them for pennies on the dollar from patients, doctors and pharmacists, according to a 95-page indictment unsealed Monday. Often, the drugs were expired, kept in hot car trunks instead of refrigerators, or were relabeled.
Carlow then sold the questionable drugs through one of a dozen or more shell companies he ran in Florida and at least six other states, agents said. They enlisted "straw men" to be company officers.
Drugs changed hands often
The network peddled drugs by forging paperwork showing prior owners of the shipments. The drugs often changed hands among wholesalers as many as 10 times before reaching drugstores or clinics that dispensed them.
Some of the firms that bought from Carlow were involved in the scheme, agents said. Others were unsuspecting. Most times, wholesalers sold the questionable drugs to one of three huge national distributors that supply virtually all drugs in the country.
"Yes, [bad drugs] do get to the Eckerds and Walgreens of the world," Mann said.
Carlow got into pharmaceutical wholesaling in 1994 and lost his license in June 2000 after he was arrested for buying drugs from the back of a van. But he continued selling illegally out of his house even after investigators began looking at his network last year, court records show.
"He got bigger and bigger and bigger,'' said agent Gary Venema, one of the lead investigators.
The network controlled the finances from South Florida. During nine months beginning last June, Carlow and his associates transferred more than $40 million from bank accounts in the names of the shell corporations to other accounts in Miami, Tennessee, Brazil, Argentina and Panama, the indictment says.
Carlow was jailed on $7 million bond. His attorney, Craig Brand, did not respond to messages left at his office. He previously told the South Florida Sun-Sentinel that Carlow denied knowingly passing on fake or tainted drugs.
Epogen vials relabeled
Grillo, 46, was in jail on $2 million bond. Investigators said he relabeled 110,000 vials of low-strength blood booster Epogen to make it appear to be of higher strength, the indictment said. Federal drug officials said the counterfeit vials could not be detected without careful scrutiny.
He bought boxes of the lower strength drugs from patients and pharmacists for a few hundred dollars each, stuck on new labels and sold them for as much as $4,600 each, agents said. Others assisted Grillo but have not been arrested." He was running the show on the Epogen," Venema said.
Several of the 19 arrested Monday had state drug wholesaling licenses, despite past criminal records that should have barred them from the business. One, Julio Cesar Cruz of Miami, a convicted cocaine smuggler, was arrested on Monday wearing an ankle bracelet because of a probation violation.
The prescription wholesale business attracted former marijuana and cocaine dealers, who discovered it was easier and less risky than illegal drugs.
"The penalties were weaker. The likelihood of getting caught was less,'' Mann said. Florida on July 1 began enforcing a new law that increases the penalties for illegal drug diversion, eventually requires wholesalers to document all prior owners of every shipment, and makes it harder to get a license. State officials think the law will shut down most of the 422 wholesalers in the state.
Agwunobi said unscrupulous wholesalers could stay in business simply by moving out of Florida unless federal officials and other states also crack down. The U.S. Food and Drug Administration announced a campaign to look at the problem last week.
"There's so much more that needs to be done," Agwunobi said. "We are not done."
http://www.sun-sentinel.com/news/local/southflorida/sfl-cdrugs22jul22,0,2614866.story?coll=sfla-news-sfla
