KANSAS CITY, Mo., Dec. 28 /PRNewswire-USNewswire/ — Bradley J. Schlozman, U.S. Attorney for the Western District of Missouri, announced that a California man pleaded guilty in federal court today to defrauding the government by arranging for the purchase of stolen pharmaceutical drugs.
Noah Salcedo-Smith, 35, of San Fernando, Calif., pleaded guilty before U.S. District Judge Ortrie D. Smith this morning to the charge contained in a Dec. 14, 2005, superseding indictment.
“This defendant turned a blind eye to the suspicious source of these drugs that had been stolen from a Miami warehouse,” Schlozman said. “His actions were part of a larger criminal scheme that put profits ahead of public safety. We will not tolerate unscrupulous businessmen greedily shortcutting the federal system that protects consumers from unsafe prescription drugs.”
By pleading guilty today, Salcedo-Smith admitted that he participated in a scheme to defraud the U.S. Food and Drug Administration (FDA) by obstructing the lawful functions of the FDA to regulate the interstate sale and distribution of drugs and to safeguard the health and safety of consumers who purchase drugs.
Salcedo-Smith was a salesman involved in the secondary wholesale market. Prescription drug manufacturers use a multi-tier system of wholesalers to distribute prescription drugs and pharmaceutical products in the United States, Schlozman explained. A few large companies with publicly traded stock occupy the top tier of the distribution system, purchasing drugs in large volumes directly from a drug manufacturer. In turn, these top-tier companies sell to several large regional wholesalers. Below the regional wholesalers are the secondary wholesalers, who buy and sell drugs to and from each other and also sell drugs to hospitals, clinics, doctors and pharmacies.
While acting on behalf of Albers Medical Distributors Inc. and OTS Sales Inc., Salcedo-Smith arranged for the purchase of prescription drugs from a seller who did not provide pedigree documents establishing the legitimacy, source and origin of the drugs being sold. Those drugs, which were manufactured by Glaxo-Smith, had been stolen from a warehouse in Miami, Fla., in December 2001. The stolen drugs were purchased by co-defendant Albert David Nassar, 51, of New York, N.Y., then sold and re-sold through a series of secondary wholesale distributors, including Salcedo-Smith. In a series of purchases in January 2002, co-defendant Douglas C. Albers , 55, of Leawood, Kan., owner of Albers Medical Distributors, paid approximately $3.3 million for some of the stolen Glaxo drugs. Albers then re-sold the drugs to other distributors for approximately $3.5 million.
Salcedo-Smith also admitted that he helped create false pedigrees for the drugs so that they could be resold in the secondary wholesale market by Albers Medical Distributors and appear to have a legitimate pedigree. Under federal statutes, Salcedo-Smith could be subject to a sentence of up to five years in federal prison without parole, plus a fine up to $250,000.
Salcedo-Smith is the fifth co-defendant to plead guilty to charges contained in the federal indictment. This case is being prosecuted by Senior Litigation Counsel Gene Porter. It was investigated by the FDA Office of Criminal Investigations.
U.S. Department of Justice
CONTACT: Don Ledford of the U.S. Department of Justice, +1-816-426-4220
Web site: http://www.usdoj.gov/usao/mow
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