Feds say 13 pharma reps illegally sold nearly 70 million opioid pills

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Federal investigators have charged 13 pharmaceutical executives and sales representatives for the unlawful distribution of nearly 70 million opioid pills with a street value topping $1.3 billion, according to the U.S. Department of Justice (DOJ).

Nine have pleaded guilty to related charges that also involved more than 30 million doses of other prescription drugs peddled out of pill-mill pharmacies around Houston, Texas. That city became nationally known as a “hot zone” for diverting pharmaceutical opioids for black market distribution, DOJ said. It was the largest ever criminal enforcement targeting distributors of opioids and commonly abused prescription drugs, according to the Justice Department news release of Oct. 3.

DOJ’s announcement included statements from department leaders.

“The defendants, including pharmaceutical drug distributors, allegedly exploited the opioid crisis for profit — selling dangerous and addictive drugs to pill-mill pharmacies at above-market prices, knowing that the drugs would end up on the black market,” Principal Deputy Assistant Attorney General Nicole M. Argentieri said in the news release. Argentieri is head of the Justice Department’s Criminal Division. “Our message is clear: we will not hesitate in our pursuit of those involved in dumping addictive pharmaceutical drugs onto the streets.”

DOJ said the defendants distributed oxycodone, hydrocodone and hydromorphone in the most powerful, immediate-release forms that could be sold for the most money. Along with those, DOJ said they sold prescription drug potentiators — alprazolam, carisoprodol, and promethazine with codeine syrup — known for their reputation of enhancing the high from the opioids.

“The distributors allegedly charged their Houston customers far more for the drugs than what a legitimate pharmacy could or would pay,” the DOJ news release said.

The investigation involved the FBI; the U.S. Department of Health and Human Services-Office of Inspector General; the Food and Drug Administration’s Office of Criminal Investigations; and the U.S. Postal Service-Office of Inspector General.

According to DOJ, the defendants were:

• Sheldon Dounn, 71, of Plantation, Florida. Dounn was indicted in Texas for five counts of unlawfully distributing and dispensing controlled substances; two counts of conspiracy to unlawfully distribute and dispense, and possess with intent to distribute and dispense, controlled substances; and one count of conspiracy to defraud the United States in connection with a scheme to unlawfully distribute and dispense nearly 10 million opioid pills to pharmacies in Houston and Florida.
• Richard “Dick” Osbourne, 78, of Memphis, Tennessee. In Texas he pleaded guilty to one count of conspiracy to unlawfully distribute and dispense, and possess with intent to distribute and dispense, controlled substances.
• Courtney Rotenberry, 45, of Savannah, Tennessee, pleaded guilty in Texas to one count of conspiracy to defraud the United States and one count of conspiracy to use a communications facility to further the commission of a drug felony, in connection with Osbourne’s scheme. Osbourne was president and Rotenberry was sales manager of Wholesale Rx; they worked with Dounn to sell drugs from Wholesale Rx to Dounn’s pharmacy customers in Texas and Florida. Dounn and Osbourne face maximum penalties up to 20 years in prison, while Rotenberry faces up to nine years total.
• Hernan Alvarez, 52, of Phoenix, Arizona, pleaded guilty in Texas to one count of conspiracy to unlawfully distribute and dispense controlled substances in connection with a scheme to distribute over 18.6 million commonly abused opioid units. Alvarez was president of Salus Medical LLC, a pharmaceutical distributor that sold commonly abused opioids in the Houston market.
• Joshua Weinstein, 50, of Miami, Florida, in Florida pleaded guilty to one count of conspiracy to unlawfully distribute and dispense, and possess with intent to distribute and dispense, controlled substances.
• Derrick “Chad” Atkinson, 40, of Lumberton, North Carolina, was charged by information there in connection with a scheme by Weinstein to distribute more than 7 million hydrocodone, oxycodone and hydromorphone pills. Weinstein as president of a pharmaceutical drug wholesaler in Miami and Atkinson was a sales representative who served many of the company’s Houston-area pharmacy accounts.
• Jason Smith, 43, of Plantation, Florida, pleaded guilty there 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. Smith owned Proven RX Sales LLC, a pharmaceutical consulting company where Pesserillo and Rivera worked as sales representatives; together they helped distributors sell the prescription drugs to Houston-area pill-mill pharmacies. Smith faces up to 20 years in prison, while Pesserillo and Rivera face maximum penalties up to four years.
• Eric Bailey, 59, of St. Louis, Missouri, pleaded guilty there to one count of possession with intent to distribute hydrocodone and oxycodone, in connection with a scheme to distribute over 11 million hydrocodone and oxycodone pills. Bailey owned and operated Emed Medical Co. LLC, a pharmaceutical distributor, and sold the prescription drugs to Houston-area pharmacies. Bailey faces up to 20 years in prison.
• Velencia Griffin, 42, Kendal Lyons, 29, and Andre Reid, 44, of Houston, pleaded guilty in Texas to conspiracy to unlawfully distribute and dispense, and possess with intent to distribute, controlled substances. Griffin, Lyons, and Reid operated Houston-area pharmacies that purchased commonly abused controlled pharmaceutical drugs ordered through Dounn. The three each face a maximum penalty of 20 years in prison.