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Drug Distributor CEO Charged in Opioid Crisis Conspiracy

Former Rochester Drug Co-Operative CEO Laurence Doud III, right, leaves US. District Court in Manhattan with his attorney Robert C. Gottlieb, Tuesday, April 23, 2019, in New York. The former head of a drug distributor has been indicted on what federal prosecutors say are the first-ever criminal charges against a …
Kathy Willens/AP Photo
NATE CHURCH

The Rochester Drug Co-operative and its former CEO Laurence Doud III were charged on Tuesday with conspiring to defraud the Drug Enforcement Administration (DEA) — and the rest of the country.

The company was charged with narcotics conspiracy and conspiracy to defraud the United States, while Doud has been further charged with narcotics conspiracy and conspiracy to defraud the DEA. The company’s former Chief Compliance Officer William Pietruszewski is also charged with “willfully failing to file suspicious order reports with the DEA,” according to NBC. Both men will potentially face life sentences if convicted.

NBC reported that under Doud, the co-operative was allegedly “distributing tens of millions of oxycodone, fentanyl, and other opioids that Rochester’s own compliance department allegedly found had no legitimate need for them.”

According to prosecutors:

Doud and other members of senior management instructed RDC employees to contravene its policies and DEA regulations so that the Company could continue doing business with customers Doud knew were likely diverting controlled substances, and to increase Doud’s compensation.

When confronted by a fellow executive about the company’s affiliation with another person who was becoming a problematic supplier of a highly addictive opioid spray called Subsys, Doud allegedly threatened that person, saying, “Kill it and die.”

The U.S. Attorney’s Office for the Southern District of New York has filed a separate suit pursuing “penalties and injunctive relief” from the company. Meanwhile, the Rochester Drug Co-operative is under new management and attempting to placate its detractors. In an official company statement, spokesperson Jeff Eller said:

We made mistakes … and RDC understands that these mistakes, directed by former management, have serious consequences. We accept responsibility for those mistakes. We can do better, we are doing better, and we will do better.

Specifically, the company is positioning itself as making an honest mistake. “One element of the opioid epidemic is a dramatic increase in the volume of prescriptions for opioids and all narcotics,” Eller explained, boiling it down to a problem of demand:

From 2012 to 2017, we did not have adequate systems in place nor were our compliance team and practices rigorous enough to provide adequate controls and oversight over the increased demand for narcotic drug products from pharmacies.

But Eller maintains that as of 2017, the co-operative “began making significant changes with a focus on implementing a world-class compliance program.” Still, the prosecution is unlikely to give up without a fight. According to U.S. Attorney Geoffrey S. Berman:

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. 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.

And so are the first shots fired in the national battle against white-collar drug dealers.

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