Would you order Rx online

7 plead guilty in 2007 Internet pharmacy case
Thursday, February 18, 2010

FEDERAL COURT -- A long-running government case against a massive Internet
pharmacy company has all but ended with guilty pleas by seven people in U.S.
District Court.

The pleas quietly close the bulk of what was billed as a groundbreaking
prosecution in 2007, when an indictment against 18 people connected to an
Internet pharmacy company called Affpower was unsealed. They were charged
with fraud, money laundering and - for the first time in a prosecution of
online pharmacies - racketeering charges.

The seven people who appeared Tuesday in front of Judge Irma Gonzalez pleaded
guilty to a single charge of distribution of misbranded drugs. All were
immediately sentenced to one year of probation, court records show.

Since unsealing the indictment, prosecutors had secured guilty pleas from
other higher-ups in the network, including physicians and businessmen who set
up the enterprise. Sentencing for those defendants is set for later this year.

One man who was indicted, Mark Heredia, is at large and still has charges
pending.

The indictment stemmed from a multiagency investigation, based in California,
that probed the Affpower network. Prosecutors said it sold pharmaceuticals to
hundreds of thousands of customers through a network of affiliated Web sites.

³ The company was based in Costa Rica but spread around the globe.
³ Computer servers and bank accounts were in Cyprus, and credit-card
³ payments were handled by a company in Israel.

Customers looking for drugs would fill out online questionnaires, which were
reviewed by a network of physicians around the United States. Those doctors
would briefly review the forms and issue prescriptions, often within a few
seconds, prosecutors said.

Doctors were paid $3 for each form they reviewed. But because they had
conducted no physical or mental exams and had no doctor-patient relationship,
the scheme was illegal.

But it was lucrative. Between August 2004 and June 2006, Affpower got about
1 million orders over the Internet. During that time, the company took in an
estimated $126 million in revenue.

The seven who pleaded guilty were connected to the affiliated marketing part
of the operation. They had long stated that they were not part of a
racketeering conspiracy and had done nothing wrong.

Last year, a mistrial was declared after a 3 1/2-month trial, when a juror
who had initially voted for guilt said her vote had been coerced.

Then last month, as the seven headed for a new trial, defense lawyers leveled
accusations that prosecutors had withheld evidence from them before the first
trial. At one point, Gonzalez said in court papers that she would consider
dismissing the case because of questions over how the evidence was handled.

Government prosecutors said they had done nothing wrong. The issue became moot
with the guilty pleas, because Gonzlaez had not issued a final ruling on
whether the case would be dismissed or prosecutors would face some other
sanction.

Defense attorneys for several of the defendants did not return phone messages
seeking comment, and prosecutors with the U.S. Attorney's Office in San Diego
declined to comment. Those who pleaded guilty are Peter Bragansa, Tracy Oneal
Tyler, Jeffrey A. Light, Philip Bidwell, Richard Koch, Mary Aronson and
Dolores Lovin.
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