Canada-based Company that Acted as Drop-Shipper Pays $33 Million Fine in Misbranded Drug Smuggling Case

A Federal Court in Virginia has accepted the guilty plea of SB Medical Inc. and TC Medical Group on charges that they indulged in a multi-year conspiracy to smuggle and sell misbranded prescription pharmaceuticals in the United States and unlicensed wholesaling of prescription drugs. SB Medical Inc. was based in Toronto, Canada, and TC Medical Group was based in Barbados. SB Medical Inc. and TC Medical Group used false names to sell pharmaceutical products to doctors and clinics throughout the United States. Large shipments were broken down into multiple small shipments for shipping across the border. Those shipments were then sent to various U.S. addresses to be shipped out to customers with a U.S. return address. The non-FDA approved prescription medications were sourced from other foreign countries including, India, Turkey, France, Italy, and other countries. In addition to a guilty plea by the company entities, the following individuals also tendered guilty pleas: David Eli Burke, 34, of Thornhill, Ontario, Canada, who acted as director of sales, Shlomo David Rabi, 25, of Toronto, Ontario Canada, who acted as director of sales and marketing, Asaf Akiva Ibrahimian, 24, of West Orange, New Jersey, who acted as a sales representative, Reuven David Mirlis, 23, of Passaic, New Jersey, who acted as a sales representative and Rivka Rabi, 26, of Lakewood, New Jersey, who acted as the primary drop shipper for the company.

Who: FDA’s Office of Criminal Investigations, Homeland Security Investigations Washington, D.C., and the United States Postal Inspection Service..

When: May 7, 2015, 2011-2014.

Where: Toronto, Canada .

How: Joint investigation by FDA-OCI and U.S. Postal Inspection Service.

Additional details: Instead of storing pharmaceuticals at cool temperatures, members of the conspiracy used unregistered commercial mailboxes, residential backyards and porches, basement rooms, garages, kitchen fridges and freezers, all of which did not have adequate lighting, ventilation, temperature, humidity and security, as required for the safe storage and handling of such prescription drugs and devices. The pharmaceuticals imported included Lucentis, Mabthera, Botox, Dysport, Euflexxa, Remicade, Restylane, Synvisc, Prolia, Orencia, Orthovisc, and other products.

Related sources:

Canadian Company and Drop Shipper Plead Guilty to Conspiracy to Smuggle and Sell Misbranded Prescription Pharmaceuticals ,” FDA Press Release. May 7, 2015.

Companies, drop shipper plead guilty to conspiracy to smuggle, sell misbranded prescription pharmaceuticals ,” U.S. Immigration and Customs Enforcement. May 7, 2015.

Companies plead guilty to illegally sourcing, distributing pharmaceuticals in US ,” Outsourcing Pharma. May 12, 2015.