Breath Fresheners Substituted for Legitimate Medicine in $50M Diverted Pill Scheme

The former president of Cumberland Distribution, Inc. was sentenced to 15 years in prison for his role in a 32-month long scheme that saw over $50 million of diverted drugs shipped to pharmacies around the country, according to the U.S. Department of Justice (DOJ). Indicted in January 2013 along with co-conspirators Charles Jeffrey Edwards and Brenda Edwards, a jury found Jerrod Nichols Smith guilty of 15 counts of mail fraud, conspiracy, and making a false statement to the U.S. Food and Drug Administration (FDA).

According to the indictment, from December 2006 through August 2009, Cumberland Distribution, Inc. purchased millions of dollars of prescription drugs from unlicensed suppliers who had sourced the drugs from street-level drug diverters in and around New York and Miami. The drugs were shipped to Cumberland’s warehouse in Nashville, Tennessee to be cleaned, sorted, repackaged and sent to independent pharmacies around the country. Classes of medications diverted in this scheme included drugs to combat HIV/AIDS, antipsychotics, antidepressants, blood pressure medications, and diabetes medications.

Since the drugs came from various street-level drug diverters, employees of Cumberland labeled the various drugs in a way that gave them an appearance of being legitimately sourced, and the drugs were then entered into a computerized inventory tracking system. False pedigree documents were also created to persuade the buyers that the drugs were legal. WSMV TV Nashville reported that several pharmacies reported issues with drugs purchased from Cumberland, with some bottles containing the wrong medication or dosages, and at the trial, several witnesses testified that they saw a medication bottle that contained breath fresheners instead of medicine.

On top of his prison sentence, the judge ordered Smith to forfeit $1.4 million. Charles and Brenda Edwards pleaded guilty to related charges, with Charles receiving a six-year prison sentence and a $1.4 million forfeiture. Brenda Edwards is scheduled to be sentenced later this year. The hard work of FDA’s Office of Criminal Investigations made this case possible, and Assistant U.S. Attorneys Henry C. Leventis and Stephanie N. Toussaint prosecuted the case.