Large Scale Miami Drug Supplier Pleads Guilty in Nationwide Prescription Drug Diversion Scheme

The Department of Justice announced that a South Florida man pleaded guilty in U.S. District Court in Cincinnati, Ohio, in connection with the prosecution of a nationwide prescription drug diversion scheme.

Ricardo Alfredo Jurado, 59, of Miami Beach, pleaded guilty before U.S. District Court Judge Timothy S. Black to one count of conspiracy to commit mail and wire fraud.

Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division; U.S. Attorney Carter M. Stewart of the Southern District of Ohio; Special Agent in Charge Antoinette V. Henry of the U.S. Food and Drug Administration’s Office of Criminal Investigations (FDA-OCI), Metro Washington Field Office and Assistant Inspector in Charge Christopher White of the U.S. Postal Inspection Service (USPIS), Cincinnati Field Office, announced the guilty plea.

“Prescription drug diversion compromises the integrity of America’s drug supply chain,” said Principal Deputy Assistant Attorney General Mizer.  “This Miami-based supplier sold tens of millions of dollars of illegally diverted drugs, which ended up on the shelves of pharmacies and in the medicine cabinets of American consumers.”

“The drug diversion activities charged in this case create unacceptable public health risks,” said U.S. Attorney Stewart.  “Patients purchased what they believed were FDA-approved prescription drugs that had remained in regulated distribution channels intended to protect against misbranded, adulterated, sub-potent, improperly handled, counterfeit and stolen products.  Instead, these customers received drugs of unknown quality and origin.”

Jurado sold illegally diverted prescription drugs to David Miller and his company, Minnesota Independent Cooperative (MIC).  On May 6, Miller and MIC, along with Artur Stepanyan and Mihran Stepanyan, were indicted in the Southern District of Ohio and charged with one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud and one count of conspiracy to make false statements and to distribute prescription drugs without a wholesale license.  Those charges are still pending.  Jurado is the eighth co-conspirator who pleaded guilty for participating in the drug diversion scheme involving Miller and MIC.

Miller and MIC sold the prescription drugs obtained through Jurado – along with multiple other illegal sources – to wholesale and retail customers throughout the United States, including in the Southern District of Ohio.  Miller and MIC are alleged to have created fraudulent pedigree documents falsely stating that they had purchased the drugs from B&Y Wholesale, a company in Puerto Rico.  These false pedigrees covered up the illegitimate sources of the drugs – various illicit suppliers, including Jurado – and falsely stated that B&Y was an authorized distributor of the prescription drugs.

According to court documents, from July 2007 through April 2014, Jurado facilitated the sale of tens of millions of dollars of illegally diverted prescription drugs to Miller and MIC.  Jurado obtained the drugs from other illicit, unlicensed sources in South Florida.  To hide Jurado’s involvement in the sale of these drugs, Jurado and Miller used a middleman, Fernando Galan.  On Oct. 14, Galan pleaded guilty for his role in the conspiracy.  Neither Jurado nor Galan was licensed to engage in the wholesale distribution of prescription drugs.

In connection with the sale of the diverted drugs, Jurado sent bank wiring instructions, frequently through his middleman Galan, directing Miller to send payments for the drugs.  During the course of the entire conspiracy, Jurado and his co-conspirators directed payments to more than 25 different bank accounts at banks in Mexico, Nicaragua, Canada, Florida and other locations.  During the course of the conspiracy, Miller and MIC wired more than $40 million to the bank accounts specified by Jurado.

This matter is being investigated by FDA-OCI and the USPIS.  Assistant U.S. Attorneys Anne L. Porter and Christy Muncy of Southern District of Ohio and Trial Attorney John W. Burke of the Civil Division’s Consumer Protection Branch are representing the United States in this case.