Phoenix Man Pleads Guilty in $1.3 Billion Opioid Distribution Scheme

Hernan Alvarez of Phoenix admitted to his role in a multi-state conspiracy funneling millions of opioid pills to "pill-mill" pharmacies.Photo byJames YaremaonUnsplash

The Department of Justice (DOJ) announced today charges against 10 individuals involved in an alleged scheme to distribute nearly 70 million opioid pills and 30 million doses of other prescription drugs to "pill-mill" pharmacies, primarily in Houston, Texas.

Among those charged is Hernan Alvarez, 52, of Phoenix, who has pleaded guilty to one count of conspiracy to unlawfully distribute and dispense controlled substances in connection with distributing over 18.6 million opioid units.

Alvarez, the president of DEA-registered pharmaceutical distributor Salus Medical LLC, along with co-conspirators, allegedly targeted Houston-area pharmacies willing to pay over-market prices for opioids, fully aware that these pharmacies were reselling the drugs for cash, primarily to street-level drug dealers, the DOJ states

In 2017, despite receiving training from the DEA on recognizing red flags and preventing drug diversion, Alvarez continued to funnel highly potent, immediate-release opioids like oxycodone, hydrocodone, and hydromorphone to these pharmacies.

These drugs were sold in their most abused and profitable forms, contributing to an estimated street value of $1.3 billion, the DOJ says.

“The distributors that sourced pills into the Houston area may be located across the country in Arizona, Florida, Maryland, California, North Carolina, and elsewhere, but they targeted Houston, helping to make it a known ‘hot zone’ for drug diversion,” said U.S. Attorney Alamdar S. Hamdani for the Southern District of Texas.

“This office will always support the prosecution of individuals who try to thwart law enforcement and oversight by operating across state lines, posing as legitimate businesses, while in reality poisoning our district by targeting pill mills with precisely the drugs at the heart of our country’s addiction crisis."

Alvarez faces a maximum penalty of 20 years in prison, according to the DOJ.