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A federal grand jury in New York has indicted the owner of a Utah prescription drug distribution company, alleging he sold more than $100 million worth of medicines obtained through a nationwide black market to pharmacies, which then resold them to unsuspecting customers.
Randy Alan Crowell was arrested at his home in Henderson, Nev., according to the U.S. Attorney's Office for the Southern District of New York, where the indictment was handed down. Utah business registration records show that Crowell is the owner of Green Valley Medical Distributors of St. George.
A person who answered the phone at the business Wednesday said he had no comment on Crowell's arrest. Asked whether the company was still operating, he hung up.
Crowell pocketed $16 million from the scheme while allegedly defrauding insurance companies and Medicare, the indictment says.
He took advantage of a black market in which people such as Medicaid patients and others who received prescription drugs monthly for little or no cost resold them for cash on street corners or shops for well below their retail value.
The collectors then sold the drugs to others, who typically bought hundreds of bottles and who in turn resold them to wholesaler distributors, like Green Valley, with access to legitimate outlets like pharmacies.
Crowell then allegedly sold the drugs as new, legitimate medicines to pharmacies around the United States. Crowell and unnamed co-conspirators focused on some of the most expensive medications on the market, including those used to treat HIV/AIDS, according to the U.S. Attorney's Office in Manhattan.
"As alleged, Randy Crowell perverted the system designed to ensure patients receive safe and effective medication, making millions in the process," Manhattan U.S. Attorney Preet Bharara said in a new release. "Crowell's alleged crime victimized not only benefit programs like Medicaid, but also countless everyday people suffering from illnesses who had no idea their medicine had been diverted from the legitimate stream of commerce and could be dangerous to consume."
FBI Assistant Director-in-Charge Diego Rodriguez pointed to an "insatiable desire to generate revenue at the expense of those in need of true medical care."
The alleged scheme also was potentially dangerous to tens of thousands of patients who bought and ingested the medications, the indictment says. Resellers used lighter fluid or other hazardous chemicals to clean off labels, some of which could leach into the drugs, the indictment says.
Crowell is charged with one count of conspiracy to commit health care fraud, which carries a maximum sentence of 10 years in prison; one count of conspiracy to commit mail and wire fraud with a maximum sentence of 20 years in prison; one count of conspiracy to violate the Food, Drug and Cosmetics Act, which carries a maximum five years in prison; and one count of conspiracy to commit money laundering with a maximum sentence of 20 years in prison.