Introduction: 21 U.S.C. § 331: Selling Counterfeit Drugs
Under Section 331, it is illegal to sell counterfeit drugs in interstate commerce. Because this includes online sales, the “interstate commerce” element is very easy to satisfy. If you are convicted but had no intent to defraud, you face a sentence of not more than one year in prison and a fine of not more than $1,000, or both. If you are convicted and had the intent to defraud, you face a sentence of not more than three years in prison and a fine of not more than $10,000, or both. Also, if convicted for selling a counterfeit drug, your punishment depends on many factors, including what the drug is, where you sold the drug, the age of the people who bought the drug, the amount of drugs in your custody or control, and whether you have any prior criminal activity on your record.
Lastly, whether you are selling a counterfeit prescription drug or a non-prescription drug or whether the drug is a controlled substance or a synthetic drug with similar properties, each sale is considered an individual offense. This can result in significant penalties and decades behind bars. You may also face charges of federal fraud under 18 U.S.C. § 1001 for selling fake drugs, which may lead to a sentence of up to five years imprisonment and/or a fine not more than twice the gross gain or loss from the sale of the counterfeit drugs. This article, drafted by the senior defense attorneys at Oberheiden, P.C., explains the defense strategies and federal investigative bodies involved with counterfeiting charges.
“Taking someone’s money under false pretenses in exchange for a fraudulent product is fraud. Whether sold to the public or an undercover police officer, you could face tens of thousands of dollars in criminal penalties as well as imprisonment. If you are facing prescription and medication counterfeit charges, it is time to hire an experienced defense team as soon as possible.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
Proving and Defending Against Prescription and Medication Counterfeiting
The Government´s Burden
To prove criminal fraud, the government must show that you intentionally made a false or misleading statement about the prescription drug and that you knew the statement was untrue. The government must also show that the statement you made was material—meaning that it concerned a fact that the buyer relied upon to complete the purchase or that was significant to the sale. If you tell someone that they are buying prescription drug-strength codeine when you know that it is not and the buyer purchases it, this is sufficient both as a false statement and as a material statement. This intent element is very important and is necessary to be guilty of criminal fraud provision. But proving intent is not necessary for selling counterfeit drugs in interstate commerce.
An attorney experienced in counterfeit drug defense has several defense strategies. To combat fraud charges, your attorney can argue that you lacked the required knowledge or intent to sell the counterfeit drug. If you did not know that the codeine was counterfeit, there is no fraud. Also, if you made a statement about the codeine without the intent to mislead, then there is no fraud. Your attorney can make this argument in many ways, including by asserting that you did not know the substance of the drug, you did not intend to sell the drug, or you did not know you were possessing the drug. However, you can still be convicted of selling counterfeit drugs in interstate commerce. Federal law prohibits the sale of counterfeit drugs represented as something legit or pharmaceutical. Your attorney may also argue constitutional defenses such as an illegal or invalid search warrant or illegal arrest. Whether the above strategies will work depends on the facts and circumstances of your case and the experience and dedication of your attorney.
DOJ, DEA, and FDA Investigations
The DOJ has increased its investigative tools and prosecutions for drug counterfeiting. On September 30, 2021, the DOJ announced a DEA seizure of a massive amount of fentanyl and fentanyl-laced pills. The DEA seized about 1.8 million fake pills and arrested 810 individuals as a part of a two-month effort to dismantle criminal drug networks across the United States. The fake pills had the potential to kill over 700,000 Americans. The DOJ made clear that it will work with its international partners and within Mexico to aggressively investigate and prosecute these drug networks.
On October 31, the DOJ published a blog noting the dangers of how illegal counterfeit drug sales have migrated from the street corner to the web. As teens can now buy counterfeit drugs off the Internet, the threat of deaths from these pills increases substantially. The DOJ announced that it is committed to rooting out criminal drug networks that are shipping dangerous chemicals from China to Mexico to ultimately be sold to Americans. Two months later in mid-November 2021, the DOJ indicted nine individuals in a counterfeit trafficking and money laundering conspiracy involving the drug promethazine codeine. For over seven years, the individuals conspired to traffic misbranded and counterfeit drugs, resulting in $52,736,000 in drug trafficking proceeds. The DOJ stated that counterfeit drugs pose a significant risk to Americans and will not be tolerated.
The DEA is a federal law enforcement agency working under the DOJ that is responsible for combating drug trafficking in the United States. The DEA recently launched a law enforcement effort across the nation to address the increase in fentanyl-laced fake pills. In a Public Safety Alert, the DEA warned the public about the "alarming increase" in fake prescription drugs containing fentanyl and methamphetamine. Criminal drug networks are mass producing these pills and falsely marketing them as legitimate prescription drugs. Since 2019, the DEA´s seizure of counterfeit drugs with fentanyl has risen almost 430%. The DEA also observed in a press release that not even COVID has stopped drug traffickers from getting counterfeit prescription pills into the U.S. Drug Cartels in Mexico and then smuggled across the border into America.
The FDA’s Office of Criminal Investigations examines alleged criminal activity involving FDA products. This includes the distribution of counterfeit medical products. The FDA will then refer the matter to the DOJ for prosecution. In April 2021, a Texas man pleaded guilty to selling counterfeit black market vape pens from China for profit. In August 2021, a Florida man was sentenced to three years in prison for selling hundreds of thousands of counterfeit prescription drugs on the Internet. The man had used a pill press to manufacture pills that he then stamped with the letters “Xanax." The FDA often coordinates its investigative tools and resources with the DEA, which opens the door to significant penalties.
Being contacted by the government regarding criminal medication counterfeit allegations can be a worrisome time. That said, it is something that needs to be taken very seriously. The federal government has many investigative tools to use against individuals and entities allegedly engaged or who have allegedly engaged in counterfeiting prescription medications. Criminal cases demand the experience of an attorney with a successful track record in defending clients against federal criminal charges. To give yourself the best chance of fighting these charges, you need the help of an experienced attorney who understands these statutes, defenses, and the federal criminal process.
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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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Introduction: 21 U.S.C. § 331: Selling Counterfeit Drugs