The Web turned struggling Caringwell Pharmacy in Dublin into a moneymaking machine. But as the prescriptions flowed in from around the country, so did the questions.
The Internet transformed Caringwell Pharmacy. After years of financial struggle, founder Jae-Seung Lee was filling hundreds of prescriptions a day that poured into his one-room Dublin office suite from across the country in early 2007. He hired three technicians to help with the increased workload and flooded his wholesaler, Cardinal Health, with up to three large orders a day.
But Lee was hardly celebrating. A religious man, the 38-year-old pharmacist from South Korea, with two young children and a third on the way, started Caringwell three years earlier to help elderly members of his congregation, the Korean Church of Columbus. Now, he was sending drugs to strangers all over the nation and, despite assurances from his new Internet partners, couldn't put aside nagging doubts.
Indeed, red flags were everywhere. Nearly all of the Internet sales were for addictive, frequently abused painkillers and tranquilizers. C.O.D. was the usual payment method, and prescriptions were obtained from doctors without physical examinations. One prescription for hydrocodone-the most abused medication in the country, according to the U.S. Drug Enforcement Administration-even claimed a patient was allergic to "yellow pills." Hydrocodone is the generic of the popular Vicodin-a brand that is sold in white tablets. No doubt the more familiar white pills would have had more value on the street than generic tablets of a different color.
Though Lee's Internet collaborators produced an ex-DEA agent to confirm their claims, the pharmacist needed more objective corroboration. In February 2007, two months after he started to fill Internet prescriptions, Lee phoned the Ohio State Board of Pharmacy, the primary regulator of drugstores, institutional pharmacies and wholesalers. He described his predicament to an official from the board, speaking in generalities and not identifying himself or his business. The board employee delivered a harsh judgment: The arrangement sounded fishy. He told Lee that Ohio pharmacists should avoid filling prescriptions unless they originate with face-to-face examinations between doctors and patients.
Unequivocally, Lee now knew he was putting his reputation and career in jeopardy. But like the pill poppers prowling the web for their next score, he was hooked. After the phone call, Lee's Internet sales increased.
The numbers paint an ugly picture. During its four-month foray into the murky world of Internet pharmaceuticals, Caringwell mailed more than a half million doses of controlled substances to "patients" in 49 states. The prescriptions came from 19 doctors in 10 states-including a whopping 1,992 from a single New York physician-and turned a minor nonretail pharmacy serving a handful of seniors in Central Ohio assisted-living facilities into the most egregious online drug bazaar Ohio regulators have ever encountered. "His orders went from nothing to more than a small chain overnight," says Bill Winsley, executive director of the Ohio Pharmacy Board.
Winsley's agency closed Caringwell in April 2007. Since then, the fallout has been extensive. Lee has attracted plenty of media attention, permanently lost his license to practice pharmacy in Ohio and got mentioned in June by Winsley in testimony before a Congressional subcommittee investigating online pharmacies. Cardinal Health, Ohio's largest company and Caringwell's primary drug supplier, paid the state a $105,000 fine (the maximum allowed by law) and instituted a new "suspicious order monitoring" program to settle a dispute over its involvement with Caringwell. Meanwhile, state investigators say they've passed on their Caringwell findings to the Cleveland field office of the FBI, and Edward Kim, a Columbus lawyer and relative of Lee, testified at an October 2007 pharmacy board hearing that Lee was cooperating with DEA officials. (Lee declined to comment for this article through another attorney, Mark C. Collins. "There is some potential criminal exposure out there," Collins said in mid December.)
In recent years, the recreational use of prescription pills has increased, according to police and drug officials, and the DEA now lists the abuse of medicine as the second-biggest drug problem in the country (the first is marijuana). While illicit pill popping is nothing new-the Rolling Stones recorded "Mother's Little Helper" in 1966, after all-many recreational users now see Valium, Vicodin and Xanax as safer, less stigmatized alternatives to heroin, cocaine and other underground narcotics. And thanks to negligent wholesalers, inconsistent enforcement and the freedom, anonymity and convenience of the Internet, rogue cyberspace operators successfully have tapped that demand. "We always have had a drug problem," says Ernie Boyd, executive director of the Ohio Pharmacists Association. "But now, instead of having to go in with a gun to a pharmacy, you're able to make three clicks on the Internet and be done with it."
The middlemen also have recruited struggling independent pharmacies to join their schemes. Together, Caringwell and another small Ohio operation, Stoltz Leader Drug in Nelsonville, which also recently was disciplined by the state pharmacy board, sold more than a million doses of controlled substances-drugs tightly regulated by the federal government-in just a few months of improper Internet sales. Meanwhile, board investigators have other Ohio pharmacists in their sights. "There are probably going to be two or three more coming down the road," Winsley predicts.
In his testimony before the pharmacy board and in a lengthy interview with state investigators, Lee described himself as naive. "I admit I had been blinded, and I made a huge mistake," Lee said. But ignorance can't explain everything. "You can only bury your head so deep in the sand," says Tim Benedict, the pharmacy board's assistant executive director. And Lee had no good answers when investigators and board members questioned him about why he disregarded so many suspicious medical practices, unusual controlled-substance orders, even that direct warning from a pharmacy board official nearly two months before the state shut Caringwell down. "There is no justification that I can make," Lee acknowledged.
Growing up in Winchester, Kentucky, Jeremy Shortridge was exposed to plenty of pill poppers. Along with cocaine, prescription medication was the recreational drug of choice in his hometown 20 miles east of Lexington. Shortridge took his first Xanax at 15 and liked the feeling, which he describes as a "full-body buzz." He soon moved onto harder stuff-Vicodin, OxyContin (the so-called "hillbilly heroin")-and relied on the Internet to fuel his addiction. "A guy showed me how to do it, and it took off from there," he says.
The process was easy. He and fellow users would share tips on Internet message boards to keep track of the rotating roster of websites (many would appear and disappear frequently) selling drugs. Typically, Shortridge would log onto a website, fill out a questionnaire describing his medical condition and then wait for a phone call, usually within 24 hours. Doctors were supposed to conduct the so-called medical consultations, but Shortridge says physician assistants often phoned instead and passed on info to their bosses, who presumably signed off on the scripts. "Sometimes, they might ask, 'Where are you located? What prior treatments did you have?' " Shortridge recalls. "Sometimes, they will say, 'What do you need today?' "
At first, Shortridge justified his drug use. If legitimate medical professionals approved the pills, then it must be OK. But that argument held little water as his addiction progressed, and he went to greater lengths to score medication. "That's when it turned really bad," he says.
Police in the Cincinnati area followed a trail of pills to Shortridge in January 2007. Using a stolen identity, Shortridge shipped a package of painkillers and tranquilizers to a Kinko's/FedEx store just north of Cincinnati to avoid a prescription-pill crackdown underway in Kentucky. Detectives staked out the place and pounced on Shortridge, then 20 years old, when he picked up the package. Shortridge panicked-he thought he was being robbed-and drove on a sidewalk, smashing a U.S. Postal Service mailbox and shattering a car window before getting stuck in a muddy field. (He says the car's accelerator jammed.)
After police arrested him at gunpoint, Shortridge experienced a moment of clarity. Pills had destroyed his life, ruining relationships, costing him jobs, getting him kicked out of college and the Marines. "It was like, 'Enough is enough,' " he recalls. He talked openly with authorities about his addiction and online drug purchases, and he intrigued detectives when he mentioned a new Internet player that had emerged in recent months-Caringwell Pharmacy.
The Dublin business was an unlikely candidate to pop up in a criminal investigation. Its founder, Lee, had a spotless record and was known as a hard-working, capable pharmacist. After earning a pharmacy degree from Ohio State in 1996-and briefly returning to his native South Korea to take a job with a pharmaceutical company-Lee worked at a CVS in Springfield and several institutional pharmacies in Central Ohio prior to founding Caringwell in May 2004. "He was very diligent, very sharp," says his ex-boss Joe Sabino, a former president of the Ohio Pharmacy Board. "He went beyond what you needed to do." Sabino recalls that much of Lee's life revolved around the Korean Church of Columbus. "On a personal level, he's as straight and as upright a person as I've ever met," Sabino says.
Indeed, Lee started Caringwell as sort of an outreach effort for his church. He felt many older members were receiving poor service from Central Ohio pharmacies and believed he could make a difference in their lives. The business just scraped by, and Lee continued to work at other Columbus-area pharmacies to support his family during the first two years of operation. He also made his first ethical lapse in those early days. Starting in 2005, before he ventured onto the Internet, Lee allowed a technician to fill prescriptions in violation of state law while he worked elsewhere, he later admitted to pharmacy board investigators.
In 2006, Caringwell was on the verge of collapse. Desperate, Lee sold 95 percent of Caringwell to married couple Chanthou and Rina Phay, the owners of a Columbus nursing agency, for $40,000 in August of that year. Lee hoped the couple's connections might increase business. He continued to run Caringwell and agreed to go without a salary until a turnaround materialized. But the boost didn't come in the months immediately following the sale. In November 2006, the pharmacy averaged about 30 scripts a day, according to the board of pharmacy, barely enough to pay the heating and electric bills. (The Phays couldn't be reached by phone and didn't respond to a letter mailed to their home.)
Around that time, a recruiting agency of sorts for Internet pharmaceutical operators faxed Lee a sales pitch. Lee was suspicious, but he responded anyway. The company sold him hard, Lee told board investigators. Lee wouldn't personally sell drugs on the web. Instead, he would fill prescriptions from doctors who received referrals from websites operated by his Internet partners. The middlemen also referred Lee to an ex-DEA agent who now operates a consulting business in Florida. The former agent, Lee told board investigators, assured him Internet prescriptions were legal without physical examinations as long as physicians had full medical records at their disposal (board officials say that's not the case in Ohio). At the end of November, Lee launched his Internet business without meeting any of the cyberspace operators in person or signing any formal contracts.
Caringwell's fortunes immediately reversed. Prescriptions doubled in December and continued to skyrocket. By March, Caringwell was churning out nearly 200 scripts a day and making up to $8,000 a week. (But Lee told board officials he didn't profit much off the estimated $150,000 Caringwell earned from Internet sales.) The nature of the business changed dramatically, too; over a four-month period, Cardinal Health supplied Caringwell with more than 700,000 doses of controlled substances. In comparison, the wholesaler provided just 900 tablets of the heavy-duty narcotics over the two prior years.
By law, pharmaceutical wholesalers are required to notify authorities of suspicious orders (unusual size and frequency, deviating from past buying patterns). The Ohio Pharmacy Board eventually identified 105 such Caringwell orders-beginning in early December 2006-but no Cardinal official noticed anything unusual until March 2007. At that time, two employees, Jennifer Dunham and Timothy Dunham (no relation), visited Caringwell to find out why its narcotic orders had soared. The day after the meeting, Timothy Dunham wrote an e-mail to his boss recommending that Cardinal cut Caringwell off. Instead, board investigators say the company filled three more orders for pain killers and tranquilizers and didn't sever ties until an employee saw a TV broadcast in early April about Caringwell's license suspension.
Shortridge received just one order of pills from Caringwell. "I didn't really know a lot about them," he says. But the pharmacy's location struck him as odd: Most Internet pharmacies are based in southern or western states, he says. Those areas-Florida, in particular-tend to have weaker laws and enforcement. Ohio, meanwhile, has one of the more vigilant watchdogs in the country-the Ohio Pharmacy Board, a rare state licensing operation with law enforcement power, too. Dennis Luken, a detective with the Greater Warren County Drug Task Force, passed on Shortridge's tip to Rob Amiet, a pharmacy board compliance specialist who's been investigating Internet pharmacies longer than almost anyone in the country.
Amiet, a pharmacist by training, spearheaded what is believed to be the first criminal prosecution of someone selling medicine on the Internet. In 1999, Columbus family doctor Daniel Thompson was convicted of two misdemeanor charges stemming from the sale of Viagra and other lifestyle drugs from various websites, including get-it-on.com. Since then, rogue pharmacy operations have evolved from Thompson's one-stop shop to multi-pronged networks that take advantage of distance and jurisdictional boundaries: a doctor in one state, a pharmacist in another and an anonymous website owner masterminding the whole thing in a third location (not to mention the global body of web surfers that's always been part of the formula). For instance, Amiet and Luken couldn't track down the tipster, Shortridge, to conduct a more thorough interview after he was released on bond and returned to Kentucky in January 2007.
But unknown to Amiet, another Ohio pharmacy investigator had stumbled onto Caringwell. For someone with a questionable Internet practice, Lee made a bewildering choice around March 2007: He decided to move, prompting a state inspection. On March 28, Chris Reed, then a compliance agent, found several troubling things at Lee's office on Avery Road. Five computer terminals lined a wall, and boxes, mailing supplies and paperwork were piled haphazardly on the floor, desks and tables. Reed noticed several out-of-state prescriptions and huge orders of controlled substances (Cardinal Health delivered a package of hydrocodone on that day). He suspected an Internet operation, but played dumb, not wanting to tip Lee off. He ended his inspection and regrouped with other board officials later that afternoon, finding out about Amiet's investigation at that time.
The next morning, Reed, Amiet and a third board investigator, John Whittington, hit Caringwell with a surprise inspection at the Avery Road location. (Board officials can visit licensed pharmacies anytime they want.) They arrived just before 9 am and were shocked when someone other than Lee opened the pharmacy. (Only pharmacists are supposed to have keys.) The investigators walked into the building and asked the man, Richard Kim, if he was a pharmacist. "Not yet," he said.
Kim, who turned out to be a technician, phoned Lee, who arrived about 10 minutes later. Board investigators then inventoried drugs, sorted through mounds of paperwork and organized all prescriptions since 2004 into five boxes. When investigators took a 45-minute lunch break, they returned to find a big stack of prescriptions on Caringwell's fax machine (some 50 came from one company over the course of the day, Amiet says).
Investigators also spoke extensively with Lee. The pharmacist was cooperative and calm. He guided investigators through his prescription process-some came to him via fax, others through password-protected websites-and explained the labyrinth of Internet companies he was involved with (some of which were owned by the same people). "Does it seem odd to you that all these companies are doing business under different names?" Whittington asked during the digitally recorded interview.
"Maybe," Lee responded.
During the nearly three-hour interrogation, board investigators slowly pieced together the bewildering Caringwell saga: the early financial struggle, the August 2006 sale, the sloppy practices, the unusual orders for painkillers and other narcotics. "Did it ever dawn on you that these might be going into illegitimate hands?" Whittington asked.
"I had doubts, too," Lee said.
Lee even acknowledged the phone call he made to the pharmacy board two months earlier, signing a sworn statement that described the conversation and the warning he received from the unidentified board official. He also admitted in another sworn statement that he allowed Kim, his technician since 2005, to serve as an "acting pharmacist."
"When we came in, Rich said he almost was a pharmacist; I wasn't sure what that meant, but I think I do now," Whittington joked.
Caringwell caused some soul searching at Cardinal headquarters. Though the $105,000 settlement was a pittance for the $91 billion company, the state could have had a big economic impact if it suspended or revoked the license of the wholesaler's Findlay distribution center, which supplied Caringwell. "Cardinal really screwed up," Reed says.
Still, pharmacy board officials are pleased with the changes Cardinal has made over the past year. The company spent more than $20 million boosting training, hiring more compliance staff and building an electronic monitoring program. Cardinal also put together an impressive new team to stop diversion (receiving drugs fraudulently), including prominent former federal prosecutor Craig Morford and Michael
Moné, a pharmacist and lawyer who used to lead the Kentucky Board of Pharmacy.
While Cardinal officials point out they were just about to cut Caringwell off when the state shut it down, they also acknowledge their monitoring efforts were lacking. "There is a reason we invested $20 million," says Morford, who put former Ohio Congressman James Traficant in prison while an assistant U.S. attorney in Cleveland. Moné says the current monitoring program would have caught Caringwell right away if it were in place in 2006.
Meanwhile, Ohio Pharmacy Board officials have passed the baton to federal authorities, who are better positioned to investigate the nationwide operation that included Caringwell. Nancy Tice, a physician in Merrick, New York, says DEA investigators spoke with her lawyer about her involvement with Caringwell. "They made my life miserable," she says. Like Lee, she says she was duped by unscrupulous Internet operators and was shocked when she heard that the Ohio Pharmacy Board claims she sent more prescriptions-nearly 2,000-to Caringwell than any other doctor. "Holy crap," she says. "I would have said maybe a couple dozen."
Shortridge, the tipster who alerted Ohio authorities about Caringwell, is the only player to go to jail so far. Last year, he was sentenced to a year in prison in Ohio in connection with his Cincinnati-area bust (that followed 10 months in jail in Kentucky for burglarizing a former employer to feed his drug habit). Sitting in an office at the Dayton Correctional Institution in late December, a clean and sober Shortridge acknowledged he would face new temptations-the Internet, namely-once he regained his freedom at the end of January. He eyed a personal computer on the other side of the office. "Man, I don't even want to sit down in front of it," he said.
Though much has changed since Caringwell closed-for instance, Internet operators don't appear to be targeting Ohio independent pharmacists anymore-state regulators admit a black market for prescription pills continues to thrive on the web. "It's like dandelions," says Benedict, the assistant executive director of the pharmacy board. "You kill one, two more will pop up."
Dave Ghose is an associate editor for Columbus Monthly.