A pharmaceutical distribution company, its former CEO, and another top executive have been criminally charged for their role in the opioid crisis that continues to plague the United States. The indictments for conspiracy to violate narcotics laws mark the first time a major drug distributor or executive has been indicted on drug trafficking charges, according to prosecutors.
Charges were filed by the U.S. Attorney for the Southern District of New York against the Rochester Drug Co-Operative, the company’s former CEO Laurence Doud III, and William Pietruszewski, the former chief compliance officer for the firm. The company was charged on Tuesday with conspiracy to violate narcotics laws, conspiracy to defraud the U.S., and willfully failing to file suspicious order reports.
Doud has been charged with conspiracy to distribute controlled substances and conspiracy to defraud the U.S. and was taken into custody on Tuesday for a court appearance. Doud plans to fight the charges, according to his attorney. Pietruszewski has entered into a cooperation agreement with prosecutors and pleaded guilty on Friday to charges of conspiracy to distribute controlled substances and conspiracy to defraud the U.S., as well as a charge of willfully failing to file suspicious order reports with the Drug Enforcement Administration. Both men face prison sentences of life in prison.
The U.S. attorney’s office also filed a civil lawsuit against Rochester Drug Co-Operative seeking “penalties and injunctive relief” on Tuesday. The company announced that it has entered into a plea agreement in the criminal case and a settlement of the civil suit. The drug distributor has agreed to admit to the charges of wrongdoing, pay a fine of $20 million, overhaul its compliance program, and submit to monitoring by a third-party observer.
“This prosecution is the first of its kind: Executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country,” said Geoffrey S. Berman, U.S. attorney for the Southern District of New York. “Our office will do everything in its power to combat this epidemic, from street-level dealers to the executives who illegally distribute drugs from their boardrooms.”
Millions of Opioid Doses Illegally Distributed
According to prosecutors, between 2012 and 2016, Rochester Drug Co-Operative illegally distributed tens of millions of doses of oxycodone, fentanyl, and other opioids to fill orders its own compliance department had flagged as suspicious. It is alleged that the company ignored DEA regulations and its own policies by selling opioids to pharmacies that were “filling controlled substances prescriptions issued by practitioners acting outside the scope of their medical practice, under investigation by law enforcement, or on RDC’s watch list.”
In four years, the company’s sale of oxycodone tablets increased by nine times from 4.7 million to 42.2 million tablets. Fentanyl sales by the company increased from 63,000 doses in 2012 to 1.3 million doses in 2016. During the same time period, Doud’s compensation grew by more than 125 percent to $1.5 million per year. He retired in 2017.
“Doud cared more about profits than the laws intended to protect human life,” Berman said.
Prosecutors allege that Doud and other executives deliberately chose not to investigate suspicious orders or report them to the DEA.
“We made mistakes … and RDC understands that these mistakes, directed by former management, have serious consequences,” Jeff Eller, a spokesperson for Rochester Drug Co-Operative, said in a statement. “We accept responsibility for those mistakes. We can do better, we are doing better, and we will do better.”