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The U.S. Department of Justice announced that 56 year old Randy Crowell plead guilty to fraudulently distributing more than $100 million worth of prescription drugs obtained on a nationwide black market. Crowell used a Utah-based wholesale distribution company to sell illicitly procured drugs to pharmacies, which in turn dispensed them to unsuspecting customers.

Crowell, purchased more than $100 million worth of prescription medications from a sinister black market chain at a fraction of the legitimate prices for these drugs, before selling the same as new, legitimate bottles of medication to legitimate licensed pharmacies all over the country.  To maximize profits, Crowell and his co-conspirators focused on some of the most expensive medications on the market, including those used to treat HIV/AIDS.

Scheme participants targeted the cheapest possible source of supply for these drugs – Medicaid patients and other individuals who received these prescription drugs on a monthly basis for little or no cost, and who were then willing to sell their medicines rather than taking them as prescribed.

These Insurance Beneficiaries had prescriptions filled for medications each month at pharmacies across the country. And then sold their medications to low-level participants (“Collectors”) in the scheme who worked on street corners and bodegas and would pay cash – typically as little as $40 or $50 per bottle.

Because the ultimate goal of the scheme was to resell these medications as new at full price, Collectors and other scheme participants used lighter fluid and other potentially hazardous chemicals to remove the patient labels affixed when the bottles were initially dispensed to the Insurance Beneficiaries. This process, referred to as “cleaning” the bottles, was dangerous, as these hazardous chemicals could infiltrate the bottles, rendering the medication unfit for human consumption.

Collectors then sold these second-hand drugs to higher-level scheme participants (“Aggregators”) who bought dozens, and sometimes hundreds, of bottles at a time from multiple collectors before selling them to higher-level scheme participants with direct access to legitimate distribution channels, including corrupt wholesale companies like Crowell’s accomplices.

The corrupt wholesale companies then resold the bottles as new, at full price, to pharmacies, including potentially the very same pharmacies that initially dispensed these medications.

Crowell and others acting at his direction created false and fraudulent documents known as “pedigrees” for these medications, which purported to document the legitimate movement of these medications bought and sold by them.

Crowell pled guilty to one count of conspiracy to commit health care fraud, which carries a maximum term of 10 years in prison. As a part of the plea, Crowell also consented to the forfeiture of more than $13 million in scheme proceeds, including the full contents of his primary operating account.

Crowell will be sentenced on May 11, 2017, at 12:30.