Former Drug Company President Convicted
The former president of Cumberland Distribution, Inc., a Houston, Texas-based drug company, was convicted by a Tennessee federal court jury of conspiracy, 15 counts of mail fraud, and one count of making false statements to FDA in connection with a 32-month, $50 million drug diversion scheme. An FDA Office of Criminal Investigations (OCI) announcement says that Jerrod Smith faces up to 20 years in prison and a $250,000 fine for each mail fraud count, plus up to five years in prison and a $250,000 fine for the conspiracy and false statement convictions.
OCI says that evidence at the trial established that Smith and a partner purchased millions of dollars of prescription drugs from unlicensed suppliers who had previously purchased them from patients in and around New York and Miami. Smith had the drugs shipped to Cumberland’s Nashville warehouse where they were cleaned, sorted, repackaged, and shipped to independent pharmacies around the country. Generally, OCI says, the diverted drugs included products used to combat HIV/AIDS, antipsychotic medications, antidepressants, blood pressure medications, diabetes medications, and others.
Numerous pharmacies reported problems with drugs purchased from Cumberland’s Nashville warehouse including prescription drug bottles containing the wrong medicine, the wrong dosage information, and foreign objects inside. At trial, several witnesses testified that at least one bottle of prescription drugs sold by Cumberland contained candy mints.