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NHCAA Presents 2007 Fraud 'Investigation of the Year' Award to U.S. Departments of Justice, HHS, and Treasury for Convicting Internet Pharmacy 'Drug Kingpin'
Date:12/6/2007

Christopher William Smith Illegally Dispensed $24 Million Worth of Prescription Drugs Through Rogue Internet Pharmacy Racket

Internet Pharmacy Scam Funded Luxury Lifestyle, Including Seven Convertibles, Four Stretch Limousines & Maybach 62

ANAHEIM, Calif., Dec. 6 /PRNewswire-USNewswire/ -- The National Health Care Anti-Fraud Association (NHCAA) today is presenting the U.S. Departments of Justice, Health & Human Services, and Treasury the 2007 Fraud "Investigation of the Year" award for their work in convicting Christopher William Smith of illegally dispensing more than $24 million of controlled prescription drugs through fraudulent Internet pharmacies. The award is being made at the NHCAA's Annual Training Conference in Anaheim, California. Over 1,000 fraud investigators from government and the private sector have joined together at the conference to hear public-private solutions to the $60 billion dollar health-care fraud crisis.

In August 2007, Christopher William Smith -- described by US District Judge Michael Davis as a "drug kingpin" -- was sentenced to thirty years in prison for running an illegal Internet pharmacy. Smith's sentence was augmented by a threat to kill a government witness during the government's prosecution. Mr. Smith was convicted in November 2006 on nine charges of conspiracy, illegal distribution of drugs, money laundering, and operating a "continuing criminal enterprise." The conviction was an outgrowth of an investigation into Smith's Internet spamming activities that made him one of the top 10 spammers in the world. An Internet, tax, and health care fraud investigation stemming from the spamming activities revealed an organization that illegally supplied tens of millions of dollars worth of controlled substances to drug-dependent individuals across the US. Five other individuals have pleaded guilty.

Over several years, the 27 year-old Smith built a vast criminal empire. As an indication of Smith's technical skills prior to his online pharmacy venture, he sent 1.3 billion spam e-mails in a 6-month period using stolen AOL e-mail accounts. It was this ability that led to the establishment of an online pharmacy, marketing prescription drugs through 17 Web sites, millions of e-mails, and call centers employing over 100 telemarketers. Smith attempted to hide his association with the Web sites by registering the domain names using aliases with false addresses in the United Kingdom and United States. The services of one doctor, who never saw or spoke with any of the "patients," were obtained and, in a 14-month period, 72,000 prescriptions were approved and more than 4 million doses of hydrocodone-based controlled substances were dispensed, resulting in gross sales of $24 million.

Smith used his Internet pharmacy to fund an interest in automobiles. The government seized 17 of Smith's cars -- including seven convertibles, four stretch limousines, a Maybach 62, Ferrari, Lamborghini, Rolls Royce, and two Hummers. All the cars were sold at auction in 2006 and netted taxpayers $1.6 million.

"NHCAA is proud to present the U.S. Departments of Justice, HHS, and Treasury with the 2007 Investigation of the Year award," said NHCAA Executive Director Louis Saccoccio. "While the scope and complexity of Smith's criminal activities is nothing short of astounding, it is a testimony to the hard work and dedication of the federal agencies that they were able to bring down his Internet pharmacy empire. This conviction demonstrates that the law enforcement agencies are rising to the challenge of increasingly sophisticated health-care fraud activities and stopping health-care fraud dead in its tracks."

NHCAA's Investigation of the Year is being presented to four separate offices, including:

-- U.S. Department of Justice, United States Attorney's Office, District

of Minnesota;

-- U.S. Department of Justice, Federal Bureau of Investigation,

Minneapolis Division;

-- U.S. Department of Health & Human Services, Food & Drug

Administration, Office of Criminal Investigations, Minneapolis; and

-- U.S. Treasury Department, Internal Revenue Service, Criminal

Investigation, St. Paul Field Office

In particular, NHCAA would like to offer special congratulations to the following individuals for their leadership role in convicting Mr. Smith:
-- Special Agent George S. Kyrilis, Federal Bureau of Investigation,

Minneapolis Division;

-- AUSA Elizabeth C. Peterson, United States Attorney's Office, District

of Minnesota;

-- Special Agent Kenneth C. Kulick, Food & Drug Administration, Office

of Criminal Investigation, Minneapolis;

-- AUSA Nicole A. Egnisch, United States Attorney's Office, District of

Minnesota; and

-- Special Agent Chad D. Vetter, Internal Revenue Service, Criminal

Division, St. Paul Field Office

Founded in 1985 by several private health insurers and federal and state government officials, the National Health Care Anti-Fraud Association is the leading national organization focused exclusively on the fight against health care fraud. We are a private-public partnership -- our members comprise more than 100 private health insurers and those public-sector law enforcement and regulatory agencies having jurisdiction over health care fraud committed against both private payers and public programs. Established in 2000, The NHCAA Institute for Health Care Fraud Prevention is a separately incorporated, tax-exempt educational foundation that provides education and training to private- and public-sector health care anti-fraud personnel. http://www.nhcaa.org


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SOURCE The National Health Care Anti-Fraud Association
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