How Federal Agents Caught Two Ukrainian Drug Counterfeiters
Would you fly 6,000 miles to meet with a stranger who could be your new literal partner in crime? In April 2019, two Ukrainians did just that. While they dreamed of getting their counterfeit medicines into the legitimate U.S. drug supply chain, that dream was thwarted by the hard work and perseverance of federal investigators in Immigration and Customs Enforcement’s Homeland Security Investigations (HSI).
The Bad Guys
In 2015, a citizen of Ukraine named Maksym Nienadov started a company called Healthy Nation, which distributed medications in Ukraine, and sold them online. Volodymyr Nikolaienko joined the company as the business grew, and in May 2018, HSI received a tip about Healthy Nation: Nienadov and Nikolaienko were advertising counterfeit medicines online and completing transactions using WhatsApp, a free, secure messaging application for smartphones.
Once a customer showed interest in one of the fake medicines, Nienadov and Nikolaienko would organize payment via money transfer using WhatsApp. When they received the funds, they shipped the counterfeit medicine to the customer. The fake medications Healthy Nation sold were lifesaving drugs to treat diseases such as cancer and hepatitis C. People looking for a cure received vials and bottles of lies.
The Good Guys
An accusation that Nienadov and Nikolaienko were selling counterfeit medicine, however, did not mean that federal agents could arrest the men. First, agents had to build a case proving that Nienadov and Nikolaienko were breaking the law. Second, there was the issue that the U.S. and Ukraine do not have a mutually recognized treaty of extradition. Even if the agents could prove their case, Ukraine would not necessarily hand its citizens over to face prosecution in the U.S. HSI’s best option was to get the Ukrainians to come to the U.S.
In June 2018, an undercover agent (UA) sent the defendants a message via WhatsApp asking to purchase a specific cancer medication. The UA and the counterfeiters agreed on a price, and after receiving payment, the defendants shipped the medication to a secure location in Texas. The following month, the UA purchased more of the first cancer medication as well as a second one.
The UA got an email address to communicate with Nienadov and Nikolaienko by pretending that messages sent via WhatsApp were getting lost. Then, the government filed a search warrant with the email service provider, which gave federal agents a window into Healthy Nation’s operating history. They found communications with medical glass vial manufacturers and print shops in multiple countries, email conversations that mentioned additional drugs that Healthy Nation hoped to counterfeit, and a discussion with a company in India to purchase a machine that could cap medical vials.
In October 2018, federal agents received the first test result that proved that the drugs sold by Nienadov and Nikolaienko were fake. More would follow in the coming months. With confirmation that a crime was being committed, the UA hatched a plan to arrest the pair. The UA convinced the original tipster to purchase some more fake medicine from Healthy Nation and to offer to introduce the men to his business partner who could help them break into the U.S. drug supply chain. The only catch was they had to come to the U.S. for the meeting.
In December 2018, the tipster even offered to help Nienadov and Nikolaienko get business visas for their trip. All they needed to do was to send him pictures of their passports. Once that information was in hand, the UA dutifully filled out the necessary paperwork and submitted it on behalf of the men to the U.S. embassy in Ukraine.
In April 2019, Nienadov and Nikolaienko flew to Houston, Texas to meet this new potential business partner. However, that new business partner was the UA, and the men never made it back to Ukraine. The pair were arrested on their way back to the airport. The U.S. Department of Justice (DOJ) brought 19 charges against Nienadov and Nikolaienko. In July 2020, both men entered guilty pleas, admitting to conspiracy, trafficking in counterfeit drugs, and smuggling goods into the U.S. Nienadov also admitted to introducing misbranded drugs into the country.
Not the First to Be Fooled
Nienadov and Nikolaienko are not the first drug counterfeiters tricked into setting foot on American soil. They are not even the first to be tricked into flying into Houston only to have their new potential business partner turn out to be an undercover federal agent. In 2007, Kevin Xu, a Chinese citizen who had a list of 29 brand-name medications he said he could counterfeit, also made the mistake of flying to Houston.
Sources for This Week’s Video and Blog:
- "Ukrainian Men Plead Guilty to Conspiracy and Trafficking of Counterfeit Cancer and Hepatitis Drugs," U.S. Department of Justice, July 17, 2020.
- Criminal Complaint, U.S. District Court, Southern District of Texas, Case 4:19-cr-00365, September 4, 2019.
- Superseding Indictment, U.S. District Court, Southern District of Texas, Case 4:19-cr-00365, September 4, 2019.
- Guilty Plea, U.S. District Court, Southern District of Texas, Case 4:19-cr-00365, July 17, 2020.