Feds Charge 11 With Selling Fake Drugs Over the Internet

Federal authorities have indicted 11 people in Georgia, North Carolina, South Dakota and the Central American nation of Belize on charges of selling counterfeit prescription drugs over the Internet.

Investigators believe many of the drugs had little or no medicinal value, and that those behind the scam netted more than $19 million.

The company, Hi-Tech Pharmaceuticals of Norcross, Ga., marketed the drugs as Canadian through unsolicited e-mails, but the pills actually were made in Belize, the U.S. attorney's office said Wednesday.

Four Georgia residents implicated in the scam appeared before a federal magistrate Wednesday in Atlanta. Prosecutors showed photographs of the company's squalid drug lab in Belize, where pills were stored in large garbage cans marked with "Viagra" and "Lipitor."

In the photos, the equipment used to make the pills was covered in dust and dirt, and rooms were filled with unorganized boxes and canisters.

Customers "thought they were getting legitimate and safe prescription drugs over the Internet from Canada at cheaper prices, when in reality they received adulterated fakes that were crudely made in an unsanitary house in Belize," U.S. Attorney David E. Nahmias said.

Nahmias said the drugs were "not properly produced or regulated. You don't know what you're getting." He said authorities did not know how many customers were involved, but obviously they numbered at least in the hundreds.

Assistant U.S. Attorney Aaron Danzig said Hi-Tech and its subsidiaries are still operating. The company is estimated to be worth $35 million and to have produced more than 30 million pills.

All four Georgia residents pleaded not guilty to the charges. Magistrate Linda Walker released one defendant on $75,000 bond. Three others were held without bond.

Nahmias said those arrested out of state would have hearings in those states. One of the accused, Georgia resident Brad Watkins, remained at large, he said.

The indictment seeks forfeiture of numerous properties, automobiles and bank accounts, and a judgment of at least $19.8 million.

Nahmias said the defendants are accused of making 24 different drugs, including counterfeit versions of Vioxx, Viagra, Cialis, Valium and Xanax, and marketing them through unsolicited "spam" advertisements as authentic generic versions of drugs being imported from Canada.