Damian Williams, the United States Attorney for the Southern District of New York, announced that LAURENCE F. DOUD III, the former Chief Executive Officer of Rochester Drug Co-Operative, Inc. (“RDC”), was sentenced today in Manhattan federal court to 27 months in prison for conspiring to unlawfully distribute oxycodone and fentanyl and conspiring to defraud the Drug Enforcement Administration (“DEA”). DOUD was sentenced today by United States District Judge George B. Daniels after being convicted at trial in February 2022.
U.S. Attorney Damian Williams said: “Laurence Doud cared more about his own paycheck than his responsibility as CEO of RDC to prevent dangerous opioids from making their way to pharmacies, drug dealers, and people struggling with addiction. The sentence imposed today holds Doud responsible for shipping massive amounts of dangerous and highly addictive oxycodone and fentanyl to pharmacies that he knew were illegally dispensing those controlled substances and reaffirms this Office’s commitment to seeking justice for the many victims of the opioid epidemic.”
According to the Indictment and the evidence at trial:
Violations of the Federal Narcotics Laws
From 2012 through March 2017, DOUD knowingly and intentionally violated the federal narcotics laws by distributing, through RDC, dangerous, highly addictive opioids to pharmacy customers that he knew were being sold and used illicitly. At the direction of its senior management, including DOUD, RDC supplied large quantities of oxycodone, fentanyl, and other dangerous opioids to pharmacy customers that its own compliance personnel determined were dispensing those drugs to individuals who had no legitimate medical need for them. RDC, at the direction of DOUD and others, distributed controlled substances to those pharmacies even after identifying “red flags” of diversion, including dispensing highly abused controlled substances in large quantities; dispensing primarily controlled substances; dispensing quantities of controlled substances in amounts consistently higher than accepted medical standards; accepting a high percentage of cash for controlled substance prescriptions; dispensing to out-of-state patients; and filling controlled substances prescriptions issued by practitioners acting outside the scope of their medical practice, under investigation by law enforcement, or on RDC’s “watch list.” In addition, and at DOUD’s direction, RDC frequently brought on pharmacy customers that had been terminated by other distributors.
Conspiracy to Defraud the DEA
From 2012 through March 2017, DOUD took steps to conceal RDC’s illicit distribution of controlled substances from the DEA and other law enforcement authorities. Among other things, DOUD made the deliberate decision not to investigate, monitor, or report to the DEA pharmacy customers that DOUD and others at RDC knew were diverting controlled substances for illegitimate use. Because they knew that reporting these pharmacies would likely result in the DEA investigating and shutting down RDC’s customers, RDC’s senior management, including DOUD, directed the company’s compliance department not to report them and instead to continue supplying those customers with dangerous controlled substances that the company knew were being dispensed and used for illicit purposes. Among other things, pursuant to DOUD’s instructions, and contrary to the company’s representations to the DEA, RDC opened new customer accounts without conducting due diligence and supplied those customers – some of whom had been terminated by other distributors – with dangerous controlled substances. Additionally, DOUD caused RDC to avoid filing suspicious order reports with the DEA as required by law. As a result, the DEA’s ability to identify and prevent the illicit dispensing of highly addictive controlled substances by several of RDC’s pharmacy customers was impeded.
In addition to his prison term, LAURENCE F. DOUD III, 79, of Port Orange, Florida, was sentenced to three years of supervised release and ordered to pay a $100,000 fine.
Mr. Williams praised the outstanding investigative work of the DEA’s Westchester Tactical Diversion Team and thanked Special Agents of United States Attorney’s Office for their assistance.
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