The United States Attorney’s office in San Francisco recently filed charges against more than 30 people based on allegations that they were involved in an illegal prescription drug scheme worth millions of dollars. The federal indictment alleges that some of the defendant owned medical clinics, whole sale drug companies and other businesses.
The information alleged certain people supplied others with large amounts of drugs to be distributed and that instead of procuring the drugs from authorized sources the drugs were obtained from unauthorized sources. The defendants allegedly conducted transactions using aliases and/or front companies to hide the proceeds of their crimes. The types of companies allegedly involved ranged from pizza restaurants to Panda Capital Group, Trans-Atlantic Capital Group, GC National Wholesale, and Nationwide Payment Solutions just to name a few.
Among the serious part allegations is the claim that some of defendants attempted to solicit a murder for hire.
The information also alleges some of the defendants negotiated fraudulent checks, engaged in bank fraud, racketeering, identity theft, access device fraud, mail and wire fraud, money laundering, the unlicensed distribution of drugs, and tax fraud.
Distribution of prescription drugs in the United States is a highly regulated industry. With few exceptions anyone who distributed prescription drugs has to be licensed. Among the reasons distributors have to be licensed is to protect the public, to make sure medications are what they purport to be, that they are stored and labeled properly…. That said the myriad of rules and regulations covering the drug industry is complicated.
Among the allegations in this case is a conspiracy. The law of conspiracy makes every person liable for the actions of their co-conspirators, whether or not they knew about the specific conduct. It only matters whether or not the conduct of the co-defendants was foreseeable. The best way to explain this is to imagine a bank robbery. Four people decide to rob a bank; three individuals are going to go in the bank, the fourth person is the get-away car driver. Unbeknownst to the driver the other three robbers have guns. During the bank robbery a witness is shot and killed. All four people are liable for the murder of the witness. Why? Under the law, its foreseeable that people who were about to rob a bank would bring weapons. Bank robberies are inherently dangerous and it’s foreseeable a by stander could be injured or killed.
This means that while each defendant is not necessarily charged with the same thing, they might be liable for the actions of other people – even illegal conduct they had no idea was going to happen.
As is often the case, the government alleges mail and wire fraud. These statutes are so broadly written that it makes it very easy for the government to obtain convictions under one of these theories. In order to prove mail or wire fraud the government has to prove some or all of the defendants had a plan to commit a crime and either the mails, the internet, cell phones, etc… were used in furtherance of the unlawful plan.
Mail fraud and wire fraud are among some of the most common federal charges because of the ease with which federal prosecutors obtain convictions. Whether or not this law is used in the manner in which it was originally intended is debatable.
This case also contains forfeiture allegations in the millions of dollars.