Federal officials say two Florida men were charged last week in large-scale prescription fraud cases that could have left unsuspecting patients across the country without the proper drugs to treat cancer, HIV and psychiatric disorders.
The indictments of Lazaro Hernandez, 51, also known as Fat Laz or Godfather, and Eladio Vega, 37, also known as Spanky or simply E, brought the total number of charged to 15 people in a third indictment replacing the alleged fraud. scheme, announced Friday by federal prosecutors in Florida and Washington. Eight people have pleaded guilty so far, prosecutors said.
Mr. Hernandez was also arrested and separately charged on Friday with distributing more than $230 million in adulterated HIV drugs, a wholesale pharmaceutical distribution operation that federal prosecutors say was part of a nationwide scheme to to defraud the United States Food and Drug Administration. Hernandez was accused of laundering proceeds through several Miami-based companies.
Mr. Hernandez and Mr. Vega acquired and supplied the drugs that were mislabeled and sold to unknowing patients, according to the indictment.
The two men were charged with conspiracy to distribute mislabeled and adulterated drugs, conspiracy to traffic medical products with false documents, conspiracy to commit money laundering and four counts postal fraud. Mr. Hernandez was also charged with two counts of money laundering. No lawyers were listed for the men in online court records.
Stephen Manuel Costa, Rafael Angel Romero and Angel Caminero Alvarez were also listed in the indictment; 10 others are named as co-conspirators.
According to the indictment, the purpose of the scheme was for the men to “illegally enrich themselves by selling mislabelled, adulterated and otherwise diverted drugs as if they were part of the legitimate pharmaceutical market.”
A federal prosecutor involved in the cases said it was difficult to determine the number of people affected by the fraud. They said Mr. Hernandez and his accomplices set up drug distribution companies in Florida, New Jersey, Connecticut and New York in the case involving the distribution and sale of fake HIV drugs. .
Prosecutors said the larger fraud scheme, which began around January 2013 and continued through May 2019, had several different facets. First, street drug dealers would supply drugs to people who would inspect, clean, and package the drugs to ship to others with established pharmaceutical wholesalers. Then the company owners would prepare fake documents that misrepresented legitimate drug manufacturers.
Individuals would purchase the drugs from “sources who had obtained them through theft and burglary and health care fraud, including purchasing them from patients who had received them at significantly reduced prices through Medicare and Medicaid,” according to the indictment. Participants in the scheme also sought to conceal the origin of the drugs, shipping them from Florida to Arizona with false records, according to the indictment.
By obtaining and distributing the drugs in this way, prosecutors said the men were able to “generate very large profits, at the cost of endangering the health of patients”.
The company owners would then sell the drugs to retail pharmacies who would then resell the drugs – which had not been properly transported or stored – to patients.
“In order to execute their scheme, the defendants aided and caused their accomplices to sell drugs with altered labels,” prosecutors wrote in the indictment. The information left “innocent buyers” in the dark about the “nature and integrity of the drugs”.
To help cover up the fraud, those involved would funnel money obtained from the sale of the mislabeled and adulterated drugs through the bank accounts of several shell companies, according to court documents. The drugs were also shipped from Florida to Arizona with false shipping log information to help further conceal the origin.