Companies indicted for allegedly selling counterfeit drugs

David Twiddy

Thursday, Sept. 1, 2005 | 9:36 a.m.

KANSAS CITY, Mo. -- A federal grand jury indicted three businesses and 11 people Wednesday in an alleged conspiracy to sell $42 million worth of counterfeit, stolen and illegally imported prescription drugs, including the popular cholesterol drug Lipitor.

The 57-count indictment named Kansas City-based Albers Medical Distributors Inc., Lexington, Neb.-based Med-Pro Inc., and Springfield, Ill.-based H.D. Smith Wholesale Drug Co.

According to the indictment, the defendants acquired the drugs from a number of sources, repackaged them in counterfeit bottles and then sold them through wholesalers and retailers, often using fake documents to hide their origins.

Food and Drug Administration agent Larry Sperl said officials had no reports of ill health effects from the drugs. More than likely, the fakes simply didn't provide the benefit the patients expected, he said.

"I think the American people should feel confident that the drugs they're taking are safe, but they should be aware of the drugs they are taking," Sperl said.

The investigation began in 2003 when the FDA discovered three batches of fake Lipitor being sold by Albers. The company recalled 175,000 bottles of the drug.

Albers' president, Douglas Albers of Leawood, Kan., has said he didn't know the drugs were fake and that he bought them from a Puerto Rican dealer authorized by the manufacturer.

But authorities say Albers and his company played a large role in the scheme.

According to the indictment, some of the 11 co-defendants trafficked in stolen drugs, and others took genuine Lipitor and Celebrex intended to be sold in South America and illegally diverted it to the United States. Some were accused in the indictment of buying chemicals and equipment that were sent to Costa Rica to make fake versions of drugs including Lipitor and the anemia drug Procrit.

The drugs would be sold to Albers Medical Distributors, which allegedly paid Med-Pro to repackage and distribute some of them, according to the indictment. H.D. Smith Wholesale was accused of continuing to sell drugs from Med-Pro even after noticing suspicious labels.

Messages left for Albers and an attorney who has represented him weren't immediately returned Wednesday. A call to a number listed for Med-Pro rang unanswered.

Chris Smith, executive vice president of H.D. Smith, said Wednesday that the allegations were linked to a single former employee and that the company was cooperating with authorities.

The investigation has led to several convictions and indictments.

Diana Coelyn, the agent for H.D. Smith, pleaded guilty last year to accepting payments from Albers Medical. In January, Julio Cesar Cruz, of Miami, pleaded guilty to his role and agreed to cooperate with authorities.

California businessman Christopher Wayne Lamoreaux, 35, was convicted last year in Kansas City of defrauding NuCare Pharmaceuticals, where he was chief executive, by concealing $115,279 that he received from Albers Medical. Lamoreaux, serving a 21-month prison sentence, also was named in Wednesday's indictment.