Defendants allegedly ran multimillion dollar scheme to import prescription drugs into the U.S from China, Russia and India
A Pittsburgh judge sent three New York men to federal prison last week for their roles in a multimillion dollar scheme to import prescription drugs into the U.S from China, Russia and India using front companies and processing some $50 million in fraudulent credit card transactions.
U.S. District Judge David Cercone imposed a term of 38 months on Devan Abrams, 40, of New York City, and Azad Khizgilov, 47, of Staten Island. He gave another conspirator, Roman Shaulov, 53, of Brooklyn, 28 months.
All three pleaded guilty last year to conspiracy to commit mail, wire and bank fraud.
Two other conspirators, Garri Shihman, 50, of Parkland, Fla., and Gennady Nudelman, 46, of Delray Beach, Fla., also had pleaded and were sentenced in 2019.
The U.S. attorney’s office said the group conspired to sell drugs online to U.S. consumers from websites in China, Russia and India using some 70 front companies and then processed the payments. The five were all involved in the payment end of the conspiracy, prosecutors said, between 2013 and 2017.
Through a series of misrepresentations, they caused credit card companies to process card transactions for the illegal drugs without the companies realizing it.
Credit card companies have policies that prevent the use of their services for illegal importation of drugs. So the defendants set up a series of shell companies, bogus websites and fraudulent merchant applications to fool the credit card companies into believing the websites were selling legitimate products.
Two shell companies alone, A&R Shoes and GEB Enterprises, were associated with 3,200 transactions for drugs.
The conspirators also arranged for employees to serve on a telephone bank that received phone calls from customers questioning credit card charges on their statements. The phone bank was necessary because the credit card statements reflected purchases from the front companies and not the internet companies actually selling the drugs, prosecutors said.
Federal agents began unraveling the fraud through controlled purchases from websites and then the execution of search warrants at various locations, including offices that Abrams, Khizgilov and Shihman operated in Brooklyn.
Assistant U.S. Attorney Brendan Conway said in sentencing papers that the conspirators “enriched themselves by leading a massive and sophisticated fraud scheme that facilitated the black-market importation and sale of tens of millions of dollars of dangerous and addictive prescription medications and controlled substances. Committing fraud was their full-time job.”
The men manipulated friends and family members into serving as owners of the front companies, he said, and trained their employees on how to commit fraud.
Mr. Conway said the conspirators created three classes of victims: The credit card companies, the people fooled into acting as front-company owners and consumers who were taking the drugs.
Government interviews of the front-company owners revealed that most did not know the defendants were using their personal identification to set up the dummy corporations.
As for the consumers, Mr. Conway said, “we will never know how many individuals got hooked on products like modafinil [a stimulant], were impacted because of steroid abuse, or became ill or even died because they took a drug that were supposed have a black-box warning and only taken under the care of physician.”Arrests China Drug Importation Fraud Internet New Drug Trends Online Pharmacy