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Jurors and Prosecutors Sink a Federal Case Against Internet Pharmacies

Judge Zloch, ringmaster of the three-ring legal circus.
Newscom

Between February and April, a rather remarkable legal drama unfolded in U.S. District Court Judge William J. Zloch's courtroom in downtown Fort Lauderdale. Federal prosecutors had spent two years building their argument against doctors, pharmacists, and businessmen who were operating an internet pharmacy network. But midway through the trial, their efforts unraveled in spectacular fashion. The case — titled United States of America vs. Frank Hernandez et al. — featured misconduct by the prosecution, misconduct by the jury, two mistrials, and a judge refusing to sentence two men who'd pleaded guilty. In the end, the U.S. Attorney's Office was forced to turn tail and release defendants they once labeled as peddling pharmaceuticals illegally.

"There were several jaw-dropping moments," said Sean Ellsworth, one of about 20 defense lawyers who worked on the case.

"It certainly was a wild ride," says Miami defense lawyer Peter Raben. "There were a number of things I've never seen in 30 years of practice — and they all happened in this trial."

The Hernandez case first hit the courts in February 2007. Federal prosecutors indicted 14 people on charges of distributing controlled substances and conspiracy to distribute. Most of them were from Broward and Palm Beach counties, plus three out-of-state doctors. The feds claimed they had illegally sold appetite suppressants and sleeping pills. If convicted, the accused faced about five years in federal prison.

Here's how the business worked: Emmanuel Antonio and Theophilos Antiniou formed a company called E.V.A. Global Inc., which set up various websites selling prescription drugs like the sleeping pill Ambien. A buyer was directed to fill out a short medical questionnaire that asked about height, weight, symptoms, and so on. Once a buyer completed the questionnaire, he'd be directed to another website that would accept payment for the drugs. E.V.A. Global then emailed the questionnaire to physicians who would decide whether to approve the buyer's selections. The doctors acted without ever seeing or speaking to the buyers. If a physician approved the requested purchase, one of several internet-based pharmacies filled the order and shipped the medications.

In recent years, authorities have tried to clamp down on rampant prescription-drug abuse — a difficult task in an era when drugs can be purchased online. When the Drug Enforcement Agency broke up E.V.A. Global's network and federal prosecutors charged everyone from the software developers to the pharmacists, the feds issued a news release congratulating themselves. U.S. Attorney R. Alexander Acosta ominously compared the network to a low-level pusher: "In this case, internet pharmacies dispensed controlled substances much like a drug dealer would on the street — no questions asked," he said.

Mark R. Trouville, special agent in charge of the DEA in Miami, was quoted in the news release as saying, "These rogue websites are fueling prescription drug abuse... The DEA will remain diligent in this fight."

By the time the case came to trial this January, one defendant had been dropped from the case. Three had pleaded guilty and started serving their time in prison. Antonio and Antiniou — two owners of E.V.A. Global — had been persuaded by the feds to plead guilty and testify against the eight remaining defendants.

Defense attorney Raben says the network was never a shady criminal syndicate, as prosecutors contended; it was simply a chain of independent professionals, each of whom was doing his job legitimately. Although the doctors hadn't met patients face to face, he says, the questionnaire was a sufficient form of screening. "The doctors all felt they had prescribed these drugs for legitimate medical purposes," Raben explains. In turn, "the pharmacists figured that if doctors wrote prescriptions, they must be valid."

For seven weeks, jurors heard complex testimony about drugs and prescriptions. It was deep into the trial — week six — when Raben put his client, Frank Hernandez, on the stand. Hernandez owned drug supplier C&H Wholesale and internet drug companies Lifeline Pharmacy and EZRX. A lawyer for another defendant, Steven Marhee, chief financial officer at C&H Wholesale, began to cross-examine Hernandez. At that point, several lawyers recall, the government's lead prosecutor, Ellen Cohen, shot up and accused Marhee's lawyer of calling a witness simply to cover up the fact that his defendant wouldn't take the stand.

Problem is, it's a big no-no for a prosecutor to comment in front of the jury about a defendant declining to testify. Doing so violates the defendant's constitutional right to remain silent.

Lawyers for four defendants who hadn't yet testified asked Judge Zloch to dismiss the case with prejudice and throw out the charges for good. For the judge to make that ruling, he would have to believe that Cohen's exclamation had been a deliberate attempt to cause a mistrial.

Zloch stunned the courtroom by granting the motion and dismissing the case against four defendants. Yet even some of the defense lawyers who were up against Cohen thought her outburst had been just an accident. "I don't think it was intentional," attorney Ellsworth said.

 

Once those four were dismissed, only four defendants were left. One of those, Lawrence Pinkoff, had helped Antonio and Antiniou run E.V.A. Global. Oddly, just before his arrest, Pinkoff had been using his business ties to help federal agents in Georgia, acting as an informant and helping them snare other doctors and pharmacists. So Pinkoff was surprised when he was charged criminally along with the others. He argued that government agents wanted to prosecute him for the very deed they'd encouraged him to engage in. The technical term is estoppel by government, and it too is unusual to see in the courts.

"It's being told you can do something by the government and then getting arrested for that very same conduct," explains his attorney, Joseph S. Rosenbaum. "It's like if a police officer waves you through a red light and another officer arrests you on the other side after you go through it."

Rosenbaum said Pinkoff had proof that a judge and probation authorities in Georgia had OK'd his business dealings. But because of quirks in the law, the charges couldn't be dismissed pretrial; the jury would have to decide his fate.

Alas, the case would never even get that far.

After about seven weeks of trial, the jury began its deliberations. That's when things got crazier. One juror, an older woman, passed the judge a note. She was distressed because she'd heard another juror make comments that indicated he'd gone home at night and done his own research on the internet about medications mentioned in the trial.

The judge brought out the juror, who eventually admitted his transgression. One by one, the judge brought out the other jurors to determine whether the panel had been tainted. As it turned out, eight out of 12 jurors sheepishly admitted they had been doing their own internet research.

"They Googled defendants' names. They Googled definitions of medical terms. There was a lot of Googling going on," said one lawyer in the case who asked not to be named. One alternate juror was found to have been using the internet on his cell phone during breaks in testimony. Another juror had dug up information showing that one of the defendants had once been implicated for prescribing medicine that was used in a double suicide. Before the trial, his lawyer had fought to make sure this tidbit would be excluded from testimony.

Judge Zloch had no option but to declare a mistrial. Days later, the New York Times mentioned the case in a story called "Mistrial by iPhone," which explored how modern technology is challenging centuries-old courtroom rules.

The mistrial meant that the four defendants were set to start all over on a second trial with a fresh jury. But first, Zloch presided over a sentencing hearing for the two website owners who had pleaded guilty, Antonio and Antiniou.

"The judge takes the bench, and he says, 'I sat in on the trial, and I don't think I can sentence them,' " defense attorney Raben remembers. "These were the two who had developed the scheme! They had pled guilty!"

But the judge decided that the prosecution hadn't proven the two men broke the law just by operating their websites and running the back end of the internet pharmacy. On April 6, Zloch threw out the guilty pleas of Antonio and Antiniou. Then he ruled that the government had to fork over $600,000 it had seized from their business.

How odd is it for a judge to refuse to sentence someone who has pleaded guilty?

"I've never heard of it, ever," says Rosenbaum.

"It's beyond extraordinary," says David Bogenschutz, a high-powered Fort Lauderdale attorney who represented Antiniou.

It became clear that prosecutor Cohen had little chance against the remaining four defendants at a new trial. In another highly unusual move, she asked Zloch to dismiss the rest of the charges. He promptly did.

Bogenschutz says Cohen "deserves praise" for the move. "She stood up and took the flak."

As for the three men who'd pleaded guilty early on — they're just finishing prison sentences. Jeffrey Voluck is attorney for defendant Howard Helfant, a pharmacy owner who was sentenced to 14 months, served about seven, and was released April 1.

"Everybody was pressured into pleading guilty because the sentencing guidelines are draconian," Voluck says. His client would have liked to have fought the charges, but with kids at home, he "weighed his options and took the path of least resistance." Voluck says the men will now try to have their convictions reversed. "[My client] would just like to get his civil rights back. In 35 years, I've never experienced anything like this."

 

Attorney Ellsworth points out how rare it is for little guys to win against the feds. "It's incredibly difficult to fight against the government," he says. The defendant whom Ellsworth represented — Serge Francois, who had worked his way through pharmacy school — had been forced to shut down his business. Since being indicted, he had worked only as a fill-in pharmacist, and he wasn't able to work during the trial. Ellsworth says Francois is "grateful to have his life back. Most defendants don't end up like this." He will receive $91,000 that the government had confiscated.

Several attorneys in the case say they are considering yet another unusual legal maneuver: going after the government to recover attorneys' fees. It isn't unheard-of, though. In early April, U.S. District Judge Alan Gold awarded more than $600,000 in attorneys' fees to a Dr. Ali Shaygan of Miami after finding that the government pursued him overaggressively, going so far as to secretly record witnesses' phone calls.

Raben suspects the government already spent "millions of dollars, easily" prosecuting the Hernandez case. Raben explains they would have to prove that the government acted "vexatious or in bad faith," which is a high standard.

Ellsworth says the case illustrates how the law struggles to keep up with ever-changing technology. "There's no such thing as an internet pharmacy," he says. "A pharmacy is a building with people and boxes and pills. The government seems to have a problem with the lack of a physical encounter between a doctor and a patient — that someone can obtain a controlled substance without seeing a doctor in person."

Rosenbaum agrees that government efforts to resist technological change are futile. Sure, the internet may make it easier for abusers to get drugs, he says, but "the internet makes a lot of things easier. People can lie to doctors in face-to-face meetings too."

Ironically, just last week, a new federal law called the Ryan Haight Act went into effect. Named after an 18-year-old who overdosed on Vicodin he bought online, the law makes drug-disbursement networks like E.V.A. Global clearly illegal by requiring doctors and patients to meet in person. But the Hernandez case could still have an effect on other federal cases that were filed before the law took effect and are still making their way through the courts.

Bogenschutz speaks as though the dismissal of charges renewed his faith in the American justice system: "For everyone out there who thinks the courts have abandoned their roles as neutral arbiters of what's in front of them," he says grandly, "this should be a wake-up call." He theorized that when in doubt, "the judge should say, 'Is this what the law is meant for? When I don't have a good feeling, the call should go in the way of the defendant.' "

The U.S. Attorney's office refused to comment for this article.


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