RI Business Owner Pleads Guilty to Labeling & Selling Misbranded Drugs
Monday, June 20, 2016
Diwan pleaded guilty to conspiring with others to purchase drugs manufactured in India and other countries, repackaging and relabeling them making it appear that they were manufactured in the United State and Europe, and had been approved by the United States Food and Drug Administration and then reselling them.
“FDA is recognized around the globe for ensuring that drugs are safe and effective. Criminal rings that falsify drugs’ origins to give the appearance of FDA approval put the public’s health at risk. We will investigate and bring to justice those who compromise the security of the pharmaceutical supply chain wherever they may be,” said George M. Karavetsos, Director of FDA’s Office of Criminal Investigations.
Diwan is scheduled to be sentenced on September 16, 2016.
According to court documents, between 2012 and 2015, Diwan received and filled numerous orders for high cost pharmaceutical products, including a number of products used in the treatment of cancer.
Diwan admitted that he rebranded and relabeled drugs manufactured in India, including adding fake FDA codes and markings to make it look like the drugs had been manufactured in the United States or Europe and were approved by the FDA for sale.
Drugs were shipped by Diwan to costumers in numerous countries. Diwan did not sell misbranded or mislabeled drugs in the United States.
According to court records, an investigation by FDA OCI and the United States Attorney's Office for the District of Rhode Island determined that Diwan ordered large quantities of drugs manufactured by Sara International, a drug manufacturing company in India, and had the drugs transported to the home of Bart DeRidder, a conspirator in Belgium.
Once in Belgium, DeRidder affixed fraudulent labels designed by and manufactured at the direction of Arif Diwan onto the products.
The labels indicated that the drugs were manufactured by LifeLogic at a facility in Puerto Rico. The packaging also contained false FDA codes and markings to make it look like the drugs had received FDA approval.
No such facility exists in Puerto Rico.
DeRidder has been charged by Belgian authorities in connection with this matter and is facing criminal prosecution in Belgium.
The investigation also revealed that Arif Diwan created and provided fraudulent Certificates of Origin, attesting to the country of origin of the drugs, and fraudulent Certificates of Analysis, falsely attesting to the purity, strength, manufacture dates and expiration dates of the drugs. The certificates are heavily relied upon in the pharmaceutical industry as well as by Government entities to ensure the safety and efficacy of the products.
The investigation revealed that Diwan illegally transferred funds out of the United States in order to promote his illegal activity, including a January 2014 sale of the drug Caelyx to a purchaser in the United Arab Emirates.
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