Thieves Commandeer Pharmaceutical Delivery Truck and Abduct Driver

Police report of another pharmaceutical shipment hijacked by gunmen.

The Baltimore Sun reports on the story of a pharmaceutical delivery driver who was abducted December 13th while making his deliveries in Baltimore by thieves who made off with a truckload of drug products

Highlights from The Baltimore Sun article include:

• Police called the morning heist “incredibly thought-out,” and were looking for three suspects.

• The 55-year-old driver was forced at gunpoint into the back of his delivery truck and transported to an unknown location where the suspects unloaded about 80 crates of drug products.

• “The value of the drugs is significant,” said Baltimore Police spokesman Anthony Guglielmi, who said he could not place a dollar figure. “We believe the individuals responsible might have had knowledge about where and when the truck was going to be.”

• Guglielmi said police were in contact with the local FBI and DEA.

Clearly theft of prescription pharmaceuticals is proliferating given the high value and additional profitability of both the product and their packaging.

Organized criminal gangs are seizing the high profits and relative low risk in the criminal activity of pharmaceutical theft and drug counterfeiting.

The crime is has a double return to the criminal-prescription drugs are a valuable commodity and their packaging, used in the introduction of fraudulent, adulterated or counterfeit goods carries equal significance.

Members of the pharmaceutical supply chain must be on guard to protect their inventories from theft and fraudulent, adulterated, sub-standard and counterfeit drugs.

Consumers need to be made more aware of the prevalence and danger of bogus medications.

To read the entire Baltimore Sun article, visit: http://weblogs.baltimoresun.com/news/crime/blog/2010/12/thieves_commandeer_pharmaceuti.html

To learn more about pharmaceutical supply chain safety solutions, visit: http://www.xstreamsystems.net/

Canadian Man Sentenced to 33 Months in Prison for Online Cancer Drug Scam

This week, Hazim Gaber, 22, of Edmonton, Canada, was sentenced in Phoenix by U.S. District Court to 33 months in prison for selling counterfeit cancer drugs using the Internet. He was ordered to pay a $75,000 fine, as well as $53,724 in restitution, and to serve three years of supervised release following his prison term.

Garber admitted to selling counterfeit experimental cancer drug sodium dichloroacetate, also known as DCA, to at least 65 victims in the United States, Canada, the United Kingdom, Belgium and the Netherlands between October and November 2007.

DCA is a highly sought cancer drug for its reputed ability to shrink tumors in lung cancer, breast cancer and brain cancer. However, the drug is experimental and not yet approved for use in either the United States or Canada.

The white powdery substance that Garber supplied to the victims was later determined through laboratory tests to contain starch, dextrin, dextrose or lactose, and contained no DCA. The packages also contained a fraudulent certificate of analysis from a fictitious laboratory and instructions on how to dilute and ingest the bogus DCA.

The sentencing is part of a larger department-wide effort led by the Department of Justice Task Force on Intellectual Property (IP Task Force) to combat the growing problem of IP violations and to protect the health of American consumers.

The case was prosecuted by Trial Attorney Thomas S. Dougherty of the Criminal Division’s Computer Crime and Intellectual Property Section and Assistant U.S. Attorney Peter Sexton of the U.S. Attorney’s Office for the District of Arizona. Significant assistance has been provided by the Edmonton Police Service, the Alberta Justice Office of Special Prosecutions-Edmonton, the Competition Bureau of Canada, the U.S. Postal Inspection Service, the Federal Trade Commission and the Alberta Partnership Against Cross Border Fraud. The Criminal Division’s Office of International Affairs provided assistance in this case. The case was investigated by the Phoenix FBI Cyber Squad.

XStream Systems applauds the IP Task Force and the FBI Cyber Squad for bringing this criminal to justice and cautions consumers against buying medications from questionable sources.

This story appears to be a classic case of a relatively unsophisticated individual taking advantage of and preying on the frantic needs of the sick with bogus drugs being peddled over the internet. His global scheme was aided by the relative anonymity and world wide access of the Internet which allowed him to market and sell his fakes to the desperately ill.

Unfortunately this tale is not an isolated occurrence but is something that happens all over the world on a daily basis. This appalling crime is being perpetrated by far more sophisticated and nefarious criminals who take advantage of people’s frantic need for healthcare and kill millions each year.

For more information visit:

US. Justice Department at http://www.justice.gov/opa/pr/2010/August/10-crm-958.html

“Canadian Man Charged in Online Cancer Drug Scam” at SecurePharmachain Blog

Counterfeiting, Adapt or Perish

By: Alan Clock, Senior Vice President, XStream Systems

"Adapt or perish, now as ever, is nature's inexorable imperative." - H.G. Wells

The following is a re-post of a Secure Pharma Chain commentary blog originally posted in February 2010.

For those of us knowledgeable about the issue of counterfeiting, we have long been aware of the huge growing menace that has seemingly lurked in the shadows of the collective consciousness of the public at large for some time now.

Even for those who have been at the forefront of this serious threat, which the FBI dubs “the crime of the 21st century”, currently there seems to be a heightened sense of concern about how quickly this criminal activity is proliferating. It would appear now that this threat is advancing well beyond even our own alarmist predictions.

To date, much of the death and destruction associated with counterfeiting activity has occurred off the radar screen from the populace of privileged, developed nations and instead in the isolated world of underdeveloped areas and their residents.

For some of us with the advantage of a prosperous free market system, we have been somewhat immune to the spectacle of the criminal poisoning of disadvantage populations, which happens routinely in Africa and Asia by the purveyors of this insidious transgression.

In 2010, the widely accepted World Health Organization’s estimate is that pharmaceutical counterfeits are a $75 billion industry with an annual growth percentage of 12-16%. The World Customs Institute estimates that food counterfeiting is a $49 billion annual enterprise.

According to the study of Counterfeiting Intelligence Bureau of the International Chamber of Commerce counterfeit goods make up conservatively 5 - 7% of World Trade which the International Anti-Counterfeiting Coalition calculates would make the current global counterfeit economy the world’s biggest single business.

We now find ourselves in a perfect storm that will expand counterfeit criminal activity well beyond our wildest estimates and make it far more deadly in scope and size. The primary elements feeding this calamity include:

· a worldwide economy in a downward spiral

· ineffective regulations and laws on the crime of counterfeiting

· spotty or careless enforcement of existing laws on counterfeiting

· disjointed supply chains that cross multiple governmental boundaries and jurisdictions

· huge taxes on critical commercial markets like health care that are squeezing both the business and the consumer to look for cheaper goods

· a collective lack of knowledge and leadership by governments around the globe to protect their constituents

· industries that choose to ignore the threat to their businesses instead of protecting their brand and customers

· a collective lack awareness of the deadly nature of the threat of counterfeits by consumers worldwide, most consider this a harmless act

Until now, this criminal activity, although grand in its size has really been driven by single individuals or disparate organized entities that realize how lucrative and safe this nefarious criminal activity has become. Criminals understand that counterfeiting is the perfect crime:

· there are few ways to get caught

· if they do get caught their activity carries almost no significant ramifications

· most often their crime will not be discovered for some time giving them plenty of time to cover their tracks and escape

· they have a global marketplace where they can carry out transactions anonymously in cyberspace

· the profit margin derived from counterfeiting transcends what most businesses make in a legitimate activity

Even as this perfect crime expands to educated and developed nations, we now seem at the precipice of something far more dangerous and deadly as this menace seems likely to evolve into something much larger in size and scope and far more insidious as a whole.

Many experts now fear the inevitable, when terror organizations, who are not driven by greed but rather destruction, realize the relative ease and deadly effectiveness that a purposeful counterfeiting event could trigger in a region or nation. Be it in a consumer good, food stuff, electronics or medication, one single, simple adulteration could literally harm millions with relative impunity.

Adapt or Perish. The time is now for governments, industry and consumers to understand the need for solutions to protect themselves from the various nefarious sources that threaten their health and well being.

Today there are many technologies and services available that can offer protection to industry and consumers from those who would seek to profit or cause destruction. Leaders in governments and industry around the globe need to act now to protect entire populations.

Although no one solution, to date provides a single, "iron clad" solution to this scourge, when appropriately layered, these existing solutions can and do create effective and efficient security to protect supply chains and consumers from fraudulent, adulterated and counterfeit products.

To learn more about, anti-counterfeiting solutions, visit: http://www.xstreamsystems.net/.

Forbes: The World's Biggest Illicit Industries

Nathan Vardi reports in a June 4th edition of Forbes.com on the World’s Biggest Illicit Industries.

According to Forbes.com the seven illicit industries are:

· Counterfeiting
· Illicit Drugs
· Cargo Theft
· Cigarettes
· Oil Smuggling
· Human Trafficking
· Art Theft

Mr. Vardi states, “from drugs to oil smuggling, the dark side of globalization generates hundreds of billions in profits annually.”

Of the seven primary illicit industries, three of these (counterfeiting, illicit drugs and cargo theft) significantly impact the health care of consumers via fraudulent, adulterated and counterfeit drugs within the legitimate pharmaceutical supply chains globally.

Here are some of the highlights from Mr. Vardi’s piece:

· “But it's not the only criminal enterprise raking in billions of dollars a year. The world's biggest illicit industries continue to grow by circumventing national laws and regulations, and taking advantage of new international networks and technologies. This dark side of globalization has generated huge profits and political instability. The exact size of these industries can be estimated only vaguely, but their scope and impact cannot be denied.”

· Counterfeiting - The Organization for Economic Cooperation and Development in 2009 said the international trade in counterfeit and pirated goods increased to more than U.S. $250 billion, almost 2% of world trade, up from US$200 billion in 2007. The world is awash in fakes--from trademarks like Nike to copyrighted music and high-tech invention like pharmaceuticals or computer chips. The World Customs Organization guesses that counterfeiting accounts for 5% to 7% of global merchandise trade.

· Cargo Theft - Cargo theft is as much as a $30 billion problem annually, according the Federal Bureau of Investigation, which points out it can include anything moved by truck or plane--tailored suits, frozen shrimp, computer chips, toilet paper. These are often non-violent thefts of goods in transit, but they can include sophisticated methods that often involve surveillance. The U.S., Mexico, Brazil, South Africa, Russia, India and the U.K. are the countries most at risk for cargo theft globally, according to FreightWatch International.

· Still, while the size and reach of global illicit industries can seem overwhelming, there are signs of hope. Law enforcement groups from around the world are learning to cooperate in the battle against international crime. Just this week seven people were arrested in Liberia in connection with a conspiracy to distribute more than $100 million of South American cocaine in Europe after the son of the president of Liberia worked undercover with U.S. drug agents.

Secure Pharm Chain Blog has reported extensively on the growing threat of these illicit industries and the impact that it has on the health and welfare of consumers througout the globe.

Secure Pharma Chain Blog, endorses increased cooperation between countries through enhanced enforcement and in the various global supply chains (specifically pharmaceuticals) incorporating various technologies to protect their inventories and consumers from fraudulent, adulterated and counterfeit medications.

To learn more about supply chain solutions, visit: http://www.xstreamsystems.net/.

To read the entire Forbes.com article, visit:
http://www.forbes.com/2010/06/04/biggest-illegal-businesses-business-crime.html

Canadian Charged In Online Cancer Drug Scam

Karen Kleiss in an article that appeared in the March 30th edition of the Edmonton Journal and Vancouver Sun writes a piece about a Canadian man who is accused by the U.S. Federal Bureau of Investigation of selling fake experimental cancer drug treatments via a website he operated.

The 21 year old Edmonton resident Hazim Gaber is charged with five counts of wire fraud for his role in operating www.DCAadvice .com that was reportedly selling a fake version of the experimental cancer drug dichloroacetate also know as DCA directly to patients.

According to authorities the international fraud duped dozens of desperate cancer patients around the world who came to the website after the patients discovered that in many cases they could no longer legitimately buy the experimental drug that they needed for their treatments. Court records indicate many of the victims had their cancer treatments interrupted or delayed because of Mr. Gaber’s fraudulent scheme.

The accused, Mr. Gaber, apparently operated his website and illegal operation in the home that he shared with his parents.

Highlights from Ms.Kliess’ story include:

· Edmonton police initiated an investigation on Nov. 14, 2007, after a local woman who purchased drugs from the site lodged a complaint.
· She told police she turned to the online store when she learned she could no longer buy the experimental tumor-shrinking drug from the United States. When her first shipment arrived in a spice bottle and looked nothing like the DCA she had been receiving from the United States, she went to police.
· Testing showed the white, coarse, sweet-smelling powder she had been sent was not DCA. Later analysis showed some of the shipments patients received were made up of milk sugar, artificial sweetener, starch and talcum powder.
· Investigators eventually discovered that the so-called drugs had been shipped to at least 67 customers in Canada, the U.S., Belgium, Netherlands and the United Kingdom. The website claimed to have served more than 1,000 patients and recorded tumor shrinkage in 80 to 90 per cent of them.
· On June 30, 2009, the FBI laid charges against Mr. Gaber in an Arizona court and arrested him at the airport in Frankfurt, Germany. He was later extradited to the U.S. and he is now in jail in Phoenix.
· On July 25, 2009, Edmonton police searched Mr. Gaber's home and found 58 drug orders and receipts for arrowroot powder, dextrose and bromelian powder. Last week, an Edmonton judge agreed to let the local police share their findings with the U.S. authorities.
· Mr. Gaber's trial is scheduled to begin June 1 in Arizona. In the United States, the maximum sentence for wire fraud is 20 years in prison.

This story appears to be a classic case of a relatively unsophisticated individual taking advantage of and preying on the frantic needs of sick with bogus drugs being peddled over the internet. His global scheme was aided by the relative anonymity and world wide access of the Internet which allowed him to market and sell his fakes to the desperately ill.

Unfortunately this tale is not an isolated occurrence but something that happens all over the world on a daily basis. This appalling crime is being perpetrated by far more sophisticated and nefarious criminals who take advantage of people’s frantic need for healthcare and kill millions each year.

To learn more about supply chain solutions that combat fake drugs, visit: http://www.xstreamsystems.net/.

Read Ms. Kliess’ entire story online at: http://www.vancouversun.com/news/Edmonton+behind+online+cancer+drug+scam/2744675/story.html.

Newsweek: Food Fraud $49 Billion A Year Industry

Secure Pharma Chain Blog routinely reports on pharmaceutical counterfeits and product fraud. This blog post touches on another huge consumer issue, food counterfeiting. The following is an excerpt on a recent article in Newsweek.

Jeneen Interlandi writes an extremely pertinent and interesting article on the counterfeit food industry which appeared in the February 8th online edition of Newsweek.

This story chronicles the issue, its history and ongoing efforts to combat this $49 billion dollar a year crime. Interestingly, if you combine the food and pharmaceutical counterfeiting industries they represent overall a $124 billion annual threat to industry, supply chains and consumers around the globe.

Here are some interesting pieces from the Newsweek article:

· When the FBI dubbed counterfeiting “the crime of the 21st century” they weren't just talking about Prada handbags and Rolex watches. The counterfeit food industry is worth about $49 billion a year, according to the World Customs Institute, and it involves everything from fine food to boxed fruit juice. "Products are moving around the world so fast now that there is just ample opportunity," says John Spink, a food-fraud expert at Michigan State University. "And the demand for inexpensive food virtually guarantees that the problem will persist and grow."
· Food fraud, which typically means the intentional adulteration of food with cheaper ingredients for economic gain, has a long, fascinating history in both the U.S. and Europe, as documented in the excellent book Swindled: The Dark History of Food Fraud, from Poisoned Candy to Counterfeit Coffee. But because such fraud occupies an awkward gap between food safety (which deals with accidental food contamination) and food defense or bioterrorism (which deals with intentional corruption of the food supply by terrorist groups), it hasn't received much attention.
· In 2008, Chinese officials reported that milk adulterated with melamine—a chemical that makes the milk appear to have higher protein content—caused 900 infants to be hospitalized for kidney problems. When six of those babies died, a media firestorm shone a spotlight on food fraud in China and touched off a wave of panic in the United States.

As reported on repeatedly in Secure Pharma Chain Blog, adulterated, fraudulent and counterfeit products continue to proliferate and now constitute a significant threat to industry, commerce and the health and welfare of consumers everywhere. This threat demands solutions that require technologies, regulation and enforcement across the globe to protect us all. The greatest fear is that this threat will grow beyond a criminal act and evolve into an issue of national health and security.

To read the Newsweek article, visit: http://www.newsweek.com/id/233253.

To learn more about robust anti-counterfeit technologies, visit: http://www.xstreamsystems.net/.

Fake Drugs – Where Do They Come From and Who’s Distributing Them?

Profile of a Counterfeiter – 26 Busted in Purported International Drug Ring

It seems like every week we see a news story on fake drugs being found, being seized, or worse their effects on the unsuspecting buyer. So it lends the questions – Where do they come from? Who’s distributing them?

The answer can be almost as scary as the fake drugs themselves. Counterfeiters come from a variety of backgrounds, some with pharmaceutical experience and some not --such as in our last story about the self-taught chemist, Fernando Reis, who started off counterfeiting steroids and then expanded his operation to Fake Viagra. Perhaps the most unsettling of the group are those who are professional criminals. These individuals have a variety of interests including gun trafficking, illegal drugs, counterfeit apparel and other illegal activities.

Newsday recently reported on an international Drug Ring that was also trafficking Oxycodone, anabolic steroids, untaxed cigarettes and counterfeit sneakers. The Federal authorities have charged 26 people in the case. Twenty-one have been arrested and five are still at-large. Among those being sought are two New Jersey men, Myfit Dika of Wyckoff and Kujtim Lika of Little Falls, both 44, who are believed to be major figures in the ring.

The investigation began in 2003 in the Balkans, Canada and the Netherlands and they eventually tracked the suspects to New Jersey, New York, Philadelphia and Chicago, the FBI said.

This particular case portrays the dangers and challenges of tackling counterfeiting. Investigations into organized crime rings take longer and global supply chains involve cooperation between governmental regulatory agencies to bring them down. The longer the investigation, the longer the public is exposed.

Most disturbing is the question of medication safety and are they getting into the legitimate supply chain? Many would say not, but they have….

...And do you really feel comfortable wondering if that same guy who is supplying the fake Nikes made overseas just may be supplying the same medicine that controls your heartbeat????

Cargo Theft: A Major Rx Supply Chain Issue

The June 23, 2008 issue of Drug Topics contains an article about the ever increasing issue of cargo theft and its impact on the drug supply chain.

Given the high dollar value of pharmaceutical shipments, shipments of all types of medications lead the list of targets for transit thieves.

Much of the article is based on a presentation at a National Boards of Pharmacy meeting by FBI Special Agent Ryan Toole. The article states, “….in 2005 there were reported thefts of $14 million worth of Lipitor (atorvastatin, Pfizer) and Viagra (sildenafil citrate, Pfizer), and $29 million worth of Novartis products. However, Toole said, there's a long list of types of drugs stolen, including those for acid reflux, cancer, depression, hypertension, stroke, and many other conditions.”

Obviously once these products are stolen, these medications often make their way back into legitimate channels via non-legitimate enterprises in a variety of formats. The major concern is what happens to the product once it is in the hands of the thieves. Once in the hands of a thief, the products and their containers can be altered, contaminated, diluted or diverted. It is, however, certain that at some point these products will ultimately find their way to the hands of a consumer in a format that may not be safe for consumption.

These types of thefts make the case for an authentication technology that can verify the molecular structure of the material inside the sealed container such as the XStream Systems’ XT250™ Material Identification System. Operating in conjunction with Track and Trace processes or as a standalone technology, the XT250 protects the inventories within each step in the supply chain from receiving products that have been highjacked and altered.

View the article in full at this link to Drug Topics.