Sleazy doctors plead guilty to web drug racket

Two doctors have pleaded guilty to involvement in an illegal pharmaceutical supply chain racket, estimated to have raked in $126m. The duo made very little for rubber-stamping drug orders that may have imperiled the health of hundreds of thousands of Americans over a period of two years.

Chandresh Shah MD, 51, of Smyrna, Georgia, agreed to hand over $16,674 in pleading guilty to a single count of conspiracy to illegally distribute prescription pharmaceuticals, at a hearing in San Diego on Friday.

A second doctor, Gerald Morris MD, 37, of Houston, Texas, pleaded guilty to the same charge at an earlier hearing last month before US District Judge Irma Gonzalez. Morris agreed to hand over $52,446 in ill-gotten gains.

The two doctors confessed to signing prescriptions without accessing the medical or mental condition of customers of the Affpower pharmaceutical distribution network. Affpower operated through a network of websites selling controlled and non-controlled prescription drugs with no regard to their suitability or possible adverse side-effects. The doctors admitted they had no contact with customers who selected medicines by themselves without medical advice.

Shah and Morris were indicted alongside 16 others in July 2007 after federal investigators stepped in and busted up the Affpower network, which prosecutors reckon fielded one million orders between August 2004 to June 2006. Websites in the international network falsely claimed to meet regulations governing prescription pharmaceuticals sales.

In reality, the sites were run for a quick buck by the modern equivalent of snake-oil salesmen, supported by unscrupulous pharmacists and doctors.

"The illegal sale of pharmaceuticals over the internet poses a serious threat to Americans who mistakenly assume these substances are safe," said Julie Myers, Department of Homeland Security Assistant Secretary for US Immigration and Customs Enforcement (ICE). "The defendants who pleaded guilty were medical professionals who knew full well the risks inherent in what they were doing."

ICE was one of six federal agencies, including the FBI, involved in taking down the network.

Shah and Morris both face a maximum of five years in jail and $250,000 fines for conspiracy to illegally distribute controlled substances at sentencing hearings scheduled for next April. Seven other defendants in the case, some of who made earnings beyond the dreams of avarice, have also pleaded guilty.

Michael Bezonsky, 46, of Calabasas, California, agreed to forfeit $12.3m after pleading guilty to violating RICO anti-racketeering statues in running Affpower. Bezonsky, the business brain behind Affpower, separately confessed to conspiracy to distribute controlled substances and one count of money laundering in running RX Medical One, another dodgy internet pharmacy business.

RX Medical One brought in $33.6m in sales between September 2003 to May 2004, according to prosecutors. Bezonsky agreed to pay $635K. Sentencing for Bezonsky, who faces up to 20 years behind bars for money laundering and a maximum of 20 years more for racketeering, is pencilled in for April.

The trial of the remaining nine defendants in the Affpower case is due to kick off on 24 February 2009.

A DoJ statement containing more background on the case can be found here. ®