Owner of pharmaceutical distributor pleads guilty in $100M fraud scheme

The owner of a St. George, Utah-based wholesale distributor of prescription medications pleaded guilty Jan. 6 to fraudulently distributing prescription drugs obtained on the black market, according to the Department of Justice.

According to court documents, Randy Crowell owned and operated the pharmaceutical distributor from 2010 through July 2012. During that time, his company had "no legitimate sources of supply" and purchased more than $100 million worth of prescription drugs, including those used to treat HIV/AIDS, on the black market, according to the DOJ. Mr. Crowell then sold the drugs to pharmacies across the country.

Many of the medications Mr. Crowell distributed to pharmacies had previously been dispensed to others. Many times, Mr. Crowell and his co-conspirators cleaned the bottles with hazardous chemicals such as lighter fluid and transported and stored them in conditions that were insufficient to ensure the efficacy and safety of the medication, according to the DOJ.

Mr. Crowell pleaded guilty to one count of conspiracy to commit healthcare fraud and faces up to 10 years in prison. As part of his plea deal, Mr. Crowell agreed to forfeit more than $13 million in proceeds from the scheme.

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