US man arrested over $230m HIV medicine fraud

A Florida man has been arrested on suspicion of distributing more than $230m in adulterated and fraudulent HIV drugs to unsuspecting patients across the US.

Lazaro Hernandez (51) of Miami is accused of being part of a nationwide network that acquired large quantities of HIV medicines illegally, and then created false drug labelling and other documentation to make it appear as though these high-priced drugs had been obtained legitimately.

Hernandez and other conspirators set up licensed wholesale drug distribution companies in Florida, New Jersey, Connecticut, and New York, which sold the adulterated drugs at steep discounts to other co-conspirators at wholesale pharmaceutical distributors in Mississippi, Maryland, and New York.

Those wholesale pharmaceutical distributors then resold the drugs to pharmacies throughout the US, which billed the drugs to health insurers – including Medicare – and dispensed them to patients. The alleged illegal activity took place between around 2019 and 2021.

Hernandez is charged with conspiracy to deliver into interstate commerce adulterated and misbranded drugs, conspiracy to traffic in medical products with false documentation, conspiracy to commit money laundering, and specific money laundering offenses, said the Department of Justice in a statement. If convicted of all counts, he faces a maximum total penalty of more than 100 years in prison.

Diversion case

Hernandez and another defendant – Eladio Vega (37) – have also been charged in a separate indictment involving diversion of adulterated and misbranded cancer, HIV, psychiatric, and other expensive prescription medications.

In that case, it is claimed that street-level dealers supplied medicines to participants who inspected, cleaned, and packaged the drugs for shipment to others with established pharmaceutical wholesale companies.

The wholesale company owners prepared fraudulent documentation, falsely representing that legitimate drug manufacturers had provided the medications to them. 

In fact, the suppliers had acquired the drugs through health care fraud, theft or burglary, or buying the medications from patients who obtained prescriptions but chose to sell them on.