Minn. Spammer Indicted on Pharmacy Charges
August 24, 2005 10:42 PM EDT
MINNEAPOLIS - A Minnesota man considered one of the world's most prolific e-mail spammers was indicted on more than a dozen federal charges related to the operation of his business, Xpress Pharmacy Direct.

The indictment against Christopher William Smith, 25, was unsealed Wednesday after he was arrested at his home in Prior Lake. Dr. Philip Mach, 47, of Franklin Park, N.J., and Bruce Jordan Lieberman, 45, from Farmingdale, N.Y., were also charged in the indictment, federal prosecutors said.

The grand jury alleged that Smith provided prescription drugs without making sure customers had a valid prescription. The orders were obtained through spam e-mails, Internet sites and telemarketing.

The indictment contains various counts of conspiracy to dispense controlled substances, wire fraud, money laundering, distributing controlled substances and introducing misbranded drugs into interstate commerce.

Xpress Pharmacy generated millions of dollars. The indictment claims that from March 2004 to May 2005 the operation generated sales of more than $20 million from medications containing a single addictive painkiller, hydrocodone.

Smith appeared Wednesday before U.S. Magistrate Judge Janie Mayeron, who ordered him held without bond. An arraignment and detention hearing was scheduled for Friday.

Smith's attorney, Joe Friedberg, did not return a telephone call seeking comment.

The Spamhaus Project, an international anti-spam organization based in the United Kingdom, considered Smith one of the world's worst offenders.

In May, a federal judge shut down Xpress Pharmacy and appointed a receiver to take control of the business' assets. Federal authorities seized $1.8 million in luxury cars, two homes and $1.3 million in cash.

Prosecutors allege Smith had Mach issue about 72,000 prescriptions from July 2004 to about May 2005. Mach is registered to practice medicine in New Jersey, but allegedly wrote prescriptions for patients throughout the United States and without having any contact with patients or with their primary care doctors.

The U.S. Attorney's Office said Mach was represented by Bruce Levy of New Jersey. A call to his office was not immediately returned Wednesday.

Lieberman, Smith's former accountant, was accused of helping Smith hide the origin of money earned from the prescription drug business. Lieberman also allegedly helped Smith process credit cards.

Marvin Zevin, Lieberman's attorney, declined to comment until his client had made his first court appearance.

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Chris Williams can be reached at cwilliams(at)ap.org

20 million dollars in a little over a year? I'm in the wrong business.....

Here's a second news story regarding this doctor.

http://www.thnt.com/apps/pbcs.dll/article?AID=/20050826/NEWS/508260347/1001

Doctor indicted in pill scheme

East Brunswick physician wrote prescriptions without exam
By RICHARD KHAVKINE
STAFF WRITER
rkhavki@eastbrun.gannett.com

EAST BRUNSWICK � The Dunhams Corner Road office of Philip Mach, a Franklin Park doctor, was shuttered yesterday following his indictment Wednesday by a federal grand jury on charges of illegally issuing roughly 72,000 prescriptions through an online-pharmacy business based in Minnesota.

No one answered the door yesterday at the office of Mach, a pulmonary and internal-medicine specialist. The person answering the office's emergency number said Mach was "on vacation."

Messages left at Mach's Franklin Park home were not returned. The attorney listed with authorities in Minnesota, where the indictment was handed up, is no longer Mach's lawyer, a person at that lawyer's office said.

Mach, 47, is facing one count of conspiracy to distribute and dispense controlled substances, four counts of wire fraud, three counts of unlawful distribution and dispensing of a controlled substance and five counts of introducing misbranded drugs into interstate commerce.

The state Board of Medical Examiners renewed Mach's license to practice in New Jersey in May, according to a spokesman for the state's Division of Consumer Affairs. That renewal is good for two years.

"He's able to practice without restriction," pending the board's review of the indictment

and any subsequent board action, the spokesman, Jeff Lamm, said.

"What (the board) could do is temporarily suspend (his license) until the matter is resolved, or outright revoke it," Lamm said.

In part, the indictment charges Mach and his primary co-conspirator, Christopher William Smith of Prior Lake, Minn., with conspiring to distribute controlled substances "other than for a legitimate purpose . . . by means that were outside of the usual course of professional medical practice and without a legitimate medical purpose."

In July 2004, Smith and Mach began cobbling together various enterprises, usually through spam e-mails, Internet sites and telemarketing call centers, the indictment states. They continued for nearly a year, generating sales in excess of $20 million.

During that span, the indictment says, Mach approved and issued prescriptions, including Xanax, an anxiety-reducing drug; Ambien, prescribed for insomnia; Cialis, an erectile-dysfunction drug; and Lipitor, which lowers cholesterol, to customers all over the country.

Throughout, Mach was the sole acting physician in Smith's enterprises and "in virtually all instances" would have no contact with the customers or their primary-care doctors nor obtain medical records, apart from what information could be gained from an online questionnaire, the indictment states. Mach kept no records of his consultations.

Despite receiving a Drug Enforcement Agency directive around March as well as concerns from legitimate pharmacies doing business with Smith and Mach, the pair continued to cultivate their scheme.

In March, April and May, Mach and Smith dispensed hydrocodone tablets through an outfit named Xpress Pharmacy Direct to undercover agents posing as customers without any face-to-face, telephone or e-mail consultations with Mach or other physicians, according to the indictment. Hydrocodone, a narcotic related to codeine, relieves pain.

The United States Attorney's Office said that Mach is licensed to practice only in New Jersey.

New Jersey requires that a doctor perform a physical examination of every patient before a prescription is written, Lamm said.

Mach was first licensed to practice medicine in New Jersey in July 1988, according to the state Division of Consumer Affairs. The division's online profile for Mach also lists his initial license date as 1981 but does not specify which state issued that license. The U.S. Attorney's Office noted that he has an inactive license issued in Pennsylvania.

According to New Jersey's Division of Consumer Affairs, Mach attended medical school in Mexico at the Facultad de Medicina, in the state of Nuevo Leon, and received graduate medical education at Robert Wood Johnson University Medical School in New Brunswick. Two professional organizations certified him for internal medicine and pulmonary disease practice. His pulmonary-disease certification expired at the end of last year.

There have been no past board actions against Mach, according to the state's Division of Consumer Affairs.

The indictment is the result of a joint Federal Bureau of Investigation, Internal Revenue Service and U.S. Food and Drug Administration investigation.

Mach faces statutory maximum prison terms of five years on the conspiracy count, 20 years on each wire fraud count, five years on each distribution count and three years on each commerce count. Maximum fines range from $10,000 on each commerce count to $250,000 for each of the other counts.

The U.S. Attorney's Office in Minneapolis, which released the indictment, said that Mach's initial hearing date had not yet been set.

XPRESS PHARMACY STALKED ME AND STALKED ME. I ALWAYS JUST HUNG UP ON THEM.
1 TIME THIS 1 GUY TRIED REALLY HARD TO CONVINCE ME. AFTER I STESSED TO HIM
I HAVE QUIT AND THEY JUST KEPT CALLING ON A REGULAR BASIS AND EMAILED ME. WOW

HARD CLOSERS