DEA “Operation Meltdown” Targets Illegal Online Pharmacies

The U.S. Drug Enforcement Administration (DEA) recently announced a crackdown on online pharmacies selling diverted and counterfeit medications. According to the DEA’s press release, the crackdown began when the DEA’s Rocky Mountain Field Division launched an investigation in 2022, and it has subsequently spread across the United States and around the world.

DEA Shuts Down More Than 200 Online Pharmacies Linked to Diversion and Counterfeiting

The DEA’s press release states that the crackdown has resulted in the shuttering of more than 200 illegal online pharmacies linked to an India-based transnational criminal organization (TCO) operating within the United States. As the DEA writes:

“Investigators determined the operators of these online pharmacies and their co-conspirators were illegally dispensing and shipping diverted medications, without valid prescriptions, to customers throughout the United States, violating the [Controlled Substances Act] and dangerously infiltrating a closed system of distribution intended to keep patients safe.”

The DEA also writes that its investigation remains ongoing, and agents have mailed more than 20,000 letters to suspected customers of these (and potentially other) online pharmacies who may have additional information. As it continues its investigation, the DEA also plans to, “continue to pursue significant enforcement actions against illicit pharmaceutical distributors . . . that threaten public health and safety of American citizens.”

Red Flags for Possible Illicit Online Pharmaceutical Distributors (Online Pharmacies)

Due to the recent rise in popularity of online pharmacies, targeting illegal online pharmacies has become a priority for the DEA out of necessity. Selling online makes it easy for illicit operators to both target patients who are looking to avoid a trip to the pharmacy and sidestep the strict—and extensive—statutory and regulatory requirements that apply to pharmacies operating in the United States.

The DEA’s press release indicates that its Diversion Control Division is working with U.S. Attorney’s Offices and other law enforcement agencies in the U.S. and abroad to target both registered and unregistered online pharmacies. In doing so, the DEA is specifically targeting online pharmacies that exhibit red flags such as:

• Selling Prescription Drugs Without Requiring Proof of a Valid Prescription – All pharmacies, both brick-and-mortar and online, are required to confirm that patients have a valid prescription from a healthcare provider before selling prescription medications. If an online pharmacy does not have adequate protocols in place to confirm that purchasers have valid prescriptions (or if an online pharmacy does not have any protocols at all), this is a violation of federal law that can create exposure to significant penalties.
• Pricing Disparities or Prices Listed in Foreign Currency – If an online pharmacy, “offers much cheaper prices than what is typically seen in the market,” the DEA views this as a sign of a likely diversion or counterfeit drug operation as well. The DEA has also identified prices listed in foreign currency as a potential red flag for an illegal online pharmacy selling diverted or counterfeit drugs in the United States.
• No Proof of DEA Registration or a State Pharmacy License – Like brick-and-mortar pharmacies, online pharmacies are required to register with the DEA and obtain state pharmacy licenses. Online pharmacies that do not post their registration and license information on their websites can face scrutiny from the DEA due to suspicion that they are operating unlawfully, particularly if the DEA cannot locate any current registration information that corresponds to the name of the pharmacy.
• Expired Medications, Medications Without Expiration Dates, Foreign Languages, and Damaged Packaging – The DEA lists expired medications, medications without expiration dates, packaging written exclusively in foreign languages, and damaged packaging as likely signs that an online pharmacy is operating illegally and selling diverted or counterfeit prescription drugs. All of these can present serious health and safety risks for patients, and they all reflect clear violations of federal law.
• Medications that “Look[] Different from What You Have Received . . . from Your Trusted Pharmacist” – Along with investigating online pharmacies itself, the DEA is also encouraging patients to report any online pharmacies that they suspect may be selling diverted or counterfeit medications. If a drug’s packaging or the drug itself looks different from what a trusted pharmacy has sold in the past, this is usually a clear sign that the drug is not coming directly from its manufacturer.

While the DEA’s investigation into India-based illegal online pharmacies began at its Rocky Mountain Field Division in Colorado, the case is currently being handled by the U.S. Attorney’s Office for the Eastern District of New York. The DEA is continuing to target illegal online pharmacies operating across the United States, and pharmacies (and individuals) targeted by the DEA can face a variety of federal charges that carry substantial penalties.

Potential Charges Against Illegal Online Pharmacies and Their Owners

The DEA’s press release does not directly mention the charges that the U.S. Attorney’s Office is currently pursuing in New York or potential charges in future cases. However, the press release links to a sample of the potential witness letter that the DEA has been sending to customers of suspected illegal pharmacies, and that sample letter lists a variety of charges that could stem from ongoing or future investigations. These charges (and the associated penalties) include:

Entry of Goods By Means of False Statements (18 U.S.C. Section 542)

Selling foreign goods in the U.S. by means of false statements or other forms of fraud can implicate a host of federal import control statutes. It is also a direct violation of 18 U.S.C. Section 542, which imposes penalties including forfeiture, statutory fines, and up to two years of federal imprisonment.

Mail Fraud (18 U.S.C. Section 1341)

The federal mail fraud statute makes it a federal offense to use the U.S. mail system in the furtherance of any criminal enterprise. This includes delivering diverted and counterfeit medications to patients who purchased them through online pharmacies. Mail fraud carries statutory fines and up to 20 years of federal prison time in most cases.

Wire Fraud (18 U.S.C. Section 1343)

The federal mail fraud statute makes it a federal offense to use the Internet in the furtherance of any criminal enterprise. This includes operating an illegal online pharmacy. Wire fraud also carries statutory fines and up to 20 years of federal prison time in most cases.

Conspiracy (18 U.S.C. Section 1349)

Under the federal conspiracy statute, all individuals and organizations who are connected to a criminal enterprise can face prosecution in federal court. This allows the DEA and the U.S. Attorney’s Office to cast a wide net, and conspiracy convictions carry the same penalties as the underlying crimes involved.

Money Laundering (18 U.S.C. Section 1956)

The federal money laundering statute is also extremely broad, and it allows federal prosecutors to pursue charges against any companies or individuals involved in any transactions designed to conceal the source of funds from illicit enterprises. Federal money laundering convictions carry fines of up to $500,000 or twice the value of property involved in a transaction, whichever is greater, and up to 20 years of federal prison time.

Misbranding Drugs (21 U.S.C. Section 352)

The federal “misbranded drugs and devices” statute makes it a criminal offense to both mislabel medications and sell mislabeled medications to the U.S. public. Potential penalties include fines and prison time, with specific penalties depending on the specific allegations involved.

Distribution and Possession with Intent to Distribute Controlled Substances (21 U.S.C. Section 841)

Unlawfully distributing controlled substances, or possessing controlled substances with the intent to unlawfully distribute them, is a serious federal offense regardless of the means of distribution involved. Here too, the specific penalties that are on the table in these cases depend on the specific allegations involved—including the relevant drug(s) and quantity(ies).

This list is not exhaustive. While these are the only charges listed in the DEA’s sample potential witness letter, these are not the only charges that federal prosecutors can pursue against illegal online pharmacies and their owners. From other violations of the Controlled Substances Act (CSA) to violations of other general federal criminal statutes, U.S. Attorney’s Offices across the country can pursue a wide range of other charges in these cases as well.

Responding to a DEA Criminal Investigation

For pharmacies, pharmacists, and other individuals and entities targeted in DEA criminal investigations, time is of the essence. While these investigations present substantial risks in all cases, the risks can be particularly severe when agents and prosecutors pursue charges in connection with an ongoing law enforcement surge—like the DEA’s “Operation Meltdown”.

In this scenario, engaging experienced defense counsel is the first step, and targeted individuals and entities must be prepared to work closely with their defense counsel to build and execute a strategic defense. If you need to know more, we encourage you to contact us promptly for a confidential consultation.

Contact the Experienced DEA Defense Lawyers at Oberheiden P.C.

If you need to know more about the DEA’s “Operation Meltdown” or the steps involved in defending against an online pharmacy investigation, we encourage you to contact us promptly. Call 888-680-1745 or contact us online to speak with an experienced DEA defense lawyer today.