CanadaDrugs.com enters plea deal over fake cancer drug sales

The online pharmacy CanadaDrugs.com and two subsidiary businesses allegedly behind an operation selling counterfeit cancer meds to American doctors have reached a multi-million-dollar plea deal.

Five employees of the online pharmacy, including CanadaDrugs.com founder Kristjan Thorkelson, were arrested in Manitoba and British Columbia in June under the Extradition Act and were facing an extradition hearing in May next year to decide on whether they should be extradited to the US to face trial over the internet scam. A sixth man, an associate, was also arrested in June and is also awaiting an extradition hearing.

The five employees of CanadaDrugs.com – Thorkelson, Thomas Haughton, Ronald Sigurdson, Darren Chalus and Troy Nakamura – as well as associate James Trueman, are accused of illegally importing and selling $78m-worth of unapproved, misbranded and counterfeit drugs, including fake cancer medicines Altuzan and Avastin, to US doctors between 2009 and 2012.

According to a report by CBC News, the plea deal includes a guilty plea and a US $5m fine, as well as a $29m forfeit based on what was earned over the period of the operation.

Meanwhile, a separate plea agreement for Thorkelson includes a $250,000 fine and six months house arrest followed by four and a half years of probation.

Without the plea deal, the men, if convicted, could have faced up to 20 years in prison plus fines.

The deal, which still has to be approved by a US district court in Montana, also requires CanadaDrugs.com to “surrender its domain names, hand over all information and permanently stop selling and distributing unapproved or misbranded drugs in the US [and] can’t share or sell any information on American customers to any other pharmacy or third party outside of the US,” the news service said.

If the plea deal is not accepted by the Montana district court, the defendants can withdraw their guilty pleas.

Although, “based on concessions made by the United States in this case, the Defendants knowingly waive any right to appeal the judgement and sentence and any right to bring any other post-conviction attack on the sentence”, according to the plea agreement.

It adds: “If the Defendants breach the terms of this agreement, or commit any new criminal offenses between signing this agreement and sentencing, the US Attorney’s office is relieved of its obligations under this agreement, but the Defendants may not withdraw the guilty pleas.”

It is understood that the extradition hearings are still scheduled for next year.

Meanwhile, Thorkelson has had his license to practice pharmacy in Manitoba suspended, the College of Pharmacists of Manitoba announced following news of the plea deal. CanadaDrugs.com is licensed by the College of Pharmacists of Manitoba.

“The Complaints Committee believes that his conduct presents or is likely to present a serious risk to the public,” the College said in a letter to pharmacy managers, CBC News reported. “Effective immediately, Mr Thorkelson’s license is suspended until further notice.”

The US Food and Drug Administration began an investigation of CanadaDrugs.com and its alleged distribution of the fake cancer drug Avastin in the US in 2012 after it was revealed that nearly 100 physicians in the US, mostly in California, had purchased bogus cancer drugs.

Fake versions of Avastin were found to contain corn starch and acetone, and no active ingredient.

In 2014, US authorities laid charges of smuggling, conspiracy and international money laundering against the men, CanadaDrugs.com, along with affiliated companies and associates in the UK and Barbados. The following year, the pharmacy’s Winnipeg offices were raided and the assets in one bank account were seized.

The internet pharmacy and other US companies have also been accused of not meeting safety requirements to keep drugs refrigerated, while the UK affiliate River East supplies, had been accused of falsifying customs documents in order to allegedly smuggle the pharmaceutical products.