Pill-Mills Fueled by Big Pharma: Ten Nabbed in $1.3 Billion Opioid Sting - Five From Florida Charged

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The Justice Department unveils sweeping criminal charges against ten pharmaceutical distributors and brokers for unlawful sales of 70 million opioid pills.

Unprecedented Federal Crackdown on Opioid Distribution Network

In a sweeping enforcement action, federal authorities have charged ten executives, sales representatives, and brokers from pharmaceutical distribution companies with unlawfully supplying nearly 70 million opioid pills to pill-mill pharmacies in the Houston area. The illicit drugs, including oxycodone, hydrocodone, and hydromorphone, had an estimated street value of over $1.3 billion, marking this case as the largest criminal action of its kind in U.S. history.

The defendants, charged across multiple districts, are accused of capitalizing on the opioid crisis by selling highly addictive drugs at inflated prices to rogue pharmacies, knowing the drugs would end up on the black market. These distributors allegedly provided powerful prescription drugs in their most abused forms, including potentiators like alprazolam and promethazine with codeine syrup, which are notorious for intensifying the effects of opioids.

Nicole M. Argentieri, Principal Deputy Assistant Attorney General of the Justice Department’s Criminal Division, emphasized the gravity of the situation: “The defendants exploited the opioid crisis for profit, selling dangerous and addictive drugs to pill-mill pharmacies at above-market prices, fully aware these drugs would flood the streets.”

Houston: A Pill-Mill Hotbed for Opioid Trafficking

According to the charges, Houston became a national "hot zone" for opioid diversion due to the practices of the accused distributors. Companies, including Wholesale Rx and Salus Medical LLC, sold opioids in bulk to Houston-area pharmacies with virtually no oversight, despite their knowledge of the pharmacies’ illegal activities. The distributors also allegedly devised ways to evade the Drug Enforcement Administration (DEA) by implementing superficial compliance protocols and setting low purchasing limits that helped them avoid detection.

DEA Administrator Anne Milgram stated, "These defendants — owners, CEOs, executives, brokers — put profits over public safety. Their greed significantly contributed to the opioid crisis that continues to ravage communities across America."

Broader National Implications

This enforcement action is part of the Justice Department's Health Care Fraud Strike Force, a program responsible for prosecuting over 5,400 individuals involved in health care fraud since 2007. The Strike Force’s efforts have led to more than $27 billion in fraudulent claims being billed to federal health care programs. Today's charges against the ten defendants continue the Justice Department’s push to dismantle the networks that fuel the opioid epidemic, a crisis that has claimed hundreds of thousands of lives over the past two decades.

Hernan Alvarez, president of Salus Medical, and Sheldon Dounn, a Florida-based broker, were among those charged. According to the indictment, Alvarez, despite being warned by the DEA in 2017 about the red flags of drug diversion, continued to target pill-mill pharmacies in Houston for profit. Dounn, in his capacity as a broker, allegedly provided a "blueprint" for distributors to evade law enforcement scrutiny while maintaining lucrative business relationships with black-market operators.

Charged in Florida

Sheldon Dounn, 71, of Plantation, Florida, was charged for allegedly brokering the sale of millions of opioid pills and other commonly abused prescription drugs, mostly to Houston-area independent pharmacies that then sold the pills on to the black market.

Joshua Weinstein, 50, of Miami, pleaded guilty in the Southern District of Florida to one count of conspiracy to unlawfully distribute and dispense, and possess with intent to distribute and dispense, controlled substances.

Jason Smith, 43, of Plantation, Florida, pleaded guilty in the Southern District of Florida to one count of conspiracy to unlawfully distribute and dispense, and possess with intent to distribute and dispense, controlled substances.

Joseph Pesserillo, 38, of The Villages, Florida, and Cassandra Rivera, 40, of Ft. Lauderdale, Florida, were charged by information in the Southern District of Florida with one count of conspiracy to use a communications facility to further the commission of a drug felony.

Related Developments and Continued Legal Action

While nine individuals have already pleaded guilty, today's enforcement action is expected to prompt additional charges against others involved in the unlawful distribution of opioids. Authorities continue to investigate those responsible for enabling the pill mills that have fueled the opioid crisis. The Justice Department's focus remains on holding corporate executives, brokers, and pharmacy operators accountable for their role in this devastating epidemic.

A federal judge will determine the sentences, which could include up to 20 years in prison for key players in this massive distribution network. The message from law enforcement is clear: no one involved in the opioid crisis, no matter their position, will evade justice.

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