Wednesday, May 14, 2008

Indictments reveal $77 Million in Illegal Pill Sales

Congratulations to the Daytona Beach FBI, US Attorney Robert O'Neill, and their colleagues at IRS and FDA.

The Daytona Beach News reported the arrest of three Volusia county ringleaders with the headline Locals accused in $77 million Internet drug ring.

According to the indictment, Jive Network distributed approximately 4.8 million dosage units of Schedule III controlled substances and approximately 39.2 million dosage units of Schedule IV controlled substnaces to Internet customers who had no valid prescriptions. They serviced over 500,000 customer orders and generated more than $77 Million in revenues over a three year period.

Charged in the indictment were:

Jude LaCour, 35, Daytona Beach, Florida (Jive Network Owner)
Jeffrey LaCour, 60, South Daytona, Florida (Jive Network Director of Operations)

whose charges included money laundering and drug trafficking offenses involving the sale of controlled substances over the Internet. (The elder LaCour was profiled May 11th in this story: Rx Suspect has Mixed Local History

Hudsen Smith, 36, Deland, Florida (Jive Network Director of Pharmacy/Physician Operations)

and the following physicians, who were paid to do the "medical reviews" for patients who had no prescriptions.

Christopher Tobin, 41, Wilmington, North Carolina (Physician)
Akhil Baranwal*, 34, Pennsylvania (Physician)
Alexis Roman Torres, 54, Puerto Rico (Physician)
Andrew DeSonia, 47, Indiana (Physician)
Marget Fulmore (McIntosh), 52, Charlotte, North Carolina (Physician)
Abel Lau, 36, Tulsa, Oklahoma (Physician)
James Pickens, 72, Midvale, Utah (Physician)

The prescriptions were filled by several pharmacists, but the only one charged in this indictment is:

Geunnet Chebssi, 56, Spencerville, Maryland (Pharmacist)

Customers, who had no prescriptions, accessed the websites and purchased the controlled substances after completing a short health history questionnaire. Identities were not verified and medical records were not submitted.

The announcement of this indictment has been a long time coming. Online drug stores have known that The Jive Network, also known as "Celestial Group Inc", has been in trouble since at least April of 2005. A note from one such online drugstore dated April 24, 2005, read:

The Jive Network, also trading as Celestial Group Inc, were closed on the morning of April 19, 2005 as part of an investigation by DEA and FBI. To date no charges have been laid and the owner of the online pharmacy group, Jude LaCour is not in custody and has not been charged with any offences. (...) The pharmacy sites that are affected are: ePharmacist, Pillvalue, Pillstore, InstantPills, and Cyberpills.

An update on May 12, 2005 added this:

We believe Jive Network are trying to get back online and are clearing ePharmacist, PillStore, PillValue, and CyberPill orders that were held up around April 19th. Over the past 2 weeks, they seem to be either refunding customers or sending product.

At that time, Jive sent a letter to their affiliates explaining the situation. (Quoted from the "rx-affiliate" forum at "", posted April 29, 2005):

Dear Affiliate,

You may have heard the news that our offices were served with a search warrant last Tuesday, April 19th, 2005.

However, NO ARRESTS were made. No Charges were filed.

This is an obvious attempt by the DEA and FBI to try and lump us in with a group of 20 other companies/individuals that had been under
investigation, and who WERE arrested around the same time.

We want to share with you that we are NOT related to nor connected with these 20 in any way.

Jive Network has ALWAYS done everything by the book and beyond.

We have broken no laws.

We know that some of your checks have bounced. This is because the search warrant also allowed them to seize all bank accounts. When we say all,
we do mean ALL! We realize that apologizing for the difficulty this has caused you does very little, but we want to assure you of this: As soon as we are able to correct it, we will.

As to the current status, late last week, we put the websites back online. We have our internet connections and the equipment we need to start
processing orders again. However, until our accounts and other matters are operational, we are not taking orders at this time.

Additionally, something is going on with our phone lines. This is likely part of this defamatory attempt on us, so we are working to uncover and
resolve that problem as well.

When we are fully operational, we will immediately begin processing orders.

Lastly, to those of you that have emailed us telling us that you are with us, we want to express how sincerely all of us appreciate that support.
We have read comments such as, "You guys are the best ever in the industry, just let me know when I can switch my links back".

This kind of response is more than encouraging to us, and the truth is that we want to be here for as much as you are here for us. We do understand
what you are experiencing.

Please understand that the delay in sending you some kind of direct communication has been due to the circumstances of this situation, NOT

You can be sure that this situation will not stop us. We might "look" much different in the future, we will still be us, the same "Jive Network
Team" working hard for you.

While we are uncertain as to when we will come back online, you can be certain that when we do, our entire business will be stronger and even better
than before. A team that has been through an event like this and stands firm, is a team that can accomplish anything.

Stand firm with us. We will accomplish great things, together.


Jive Network

(The same letter can also be found here)

In February 2006 the note was updated again that "XL Pharmacy" had acquired the chain of online drugstores, and was standing by to fill your needs. "XLPharmacy prescriptions drugs are made by world renowned International pharmaceutical companies such as Novartis, Cipla Abbot, Aventis, Bayer, Cipla, Dr. Reddy's, Merck, Eli Lily, GlaxoSmithKline, and Ranbaxy. All prescription drugs are shipped in the manufacturers' original package and have the manufacturers' original seal for your safety.

The link provided is still live: The helpful FAQ on that site, which claims to have been online since 2004, says:

In all cases orders require a prescription prior to shipment. If you do not have a prior prescription you will be asked to complete a online medical consultation and it will them be reviewed by a licensed physician who may or may not issue a medical prescription based upon your medical consultation. If your online medical consultation was not approved by the physician you will then need to provide a medical prescription from your local physician by fax to us prior to the shipment of your order.

And yes, this replacement pharmacy is still recruiting . . .according to their website:

Experience the highest payout commission and the best Affiliate Support by telephone, live chat and email. pays the highest direct commission and the highest second tier commissions in the industry. Payments are made by bank transfer or epassporte weekly. Please contact the program manager to arrange for your preferred payment options and commissions structure. Commissions are paid up to 45%.

I can't swear that to be accurate. There were several competing affiliate programs who apparently were believed to have purchased Jive Networks customer list. LaCour and Jive Network were also the feature of an issue of The Ripoff Report claiming they had gone back into business operating ",," and others. The owner of "Secure Medical" posted a rebuttal to this though claiming they were not related, and that their database had been compromised.

In a letter written by Haden Smith back on Aug 20, 2004, he claims there are more than 100 online prescription websites using their fulfillment services, and that their pharmacies earn between $3,000 and $10,000 per day profit.

The chat boards used by the online pharmacies and their customers are lighting up with news stories about the arrests:

Rx Affiliate Forum posters want to know "are affiliates next"? In reply, the poster was reminded "What about the 8 affpower affiliates" who were arrested? Several posters say that advertising is not illegal as long as the affiliates don't take the payments or touch or ship the drugs they are "just like Google or Yahoo" - only advertisers., which provides this list of online pharmacies and their associated "Consultation Fees" and user ratings. Their conversation forum for talking about US-based online pharmacies has over 100,000 posts! The site has 117,791 registered users as of this morning. It will be interesting to see if their reaction to the news goes beyond mere reporting of the indictments.

* - curious coincidence in names here . . . this name, and city, came from court documents, but there is an Akhil Baranwai in Georgia accused of the same sort of behavior (i vs L at the end of the last name)

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