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Intellectual Property Rights
04/04/2013

Los Angeles-area man sentenced to 15 months for distributing counterfeit pharmaceuticals

LOS ANGELES — A North Hollywood man was sentenced Thursday to 15 months in federal prison for his involvement in a scheme to distribute more than 2,000 Chinese-made counterfeit pharmaceutical pills across the United States.

Edward Alarcon, 44, was sentenced Thursday morning by U.S. District Judge George H. Wu, who also ordered the defendant to pay $1,000 restitution to Eli Lilly and Company, the manufacturer of Cialis, and $1,000 to Purdue Pharma L.P., the manufacturer of OxyContin.

The case is the result of investigations by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI); the Food and Drug Administration, Office of Criminal Investigations; and the U.S. Postal Service.

After a three-day jury trial in January, Alarcon was convicted on two counts of trafficking in counterfeit OxyContin and Cialis. The evidence presented at trial showed he had purchased the bogus OxyContin from Bo Jiang, a Chinese national and alleged head of a counterfeit drug ring, and that he had offered to sell counterfeit Cialis, Viagra and Levitra on Craigslist.

On Nov. 10, 2009, HSI agents found approximately 237 counterfeit OxyContin pills and approximately 1,592 counterfeit Cialis pills in Alarcon's home and vehicle. Investigators also found hundreds of other counterfeit pills, including Viagra and Levitra (at trial, Alarcon was acquitted on charges related to the Viagra and Levitra). Only a month before the federal search, Alarcon had been convicted in state court on counterfeit drug charges for selling bogus Cialis to an undercover Los Angeles Police Department officer.

"The size, shape and color of the pills, as well as the markings on them and their packaging were identical to and substantially indistinguishable from genuine marks in use and registered for the brand-name pills on the principal register of the United States Patent and Trademark Office," prosecutors wrote in a sentencing memo filed in Alarcon's case. "The use of these marks was likely to cause confusion, to cause mistake, or to deceive because the pills and their packaging appeared to be the legitimate, brand-name products but were not. Moreover, the chemical composition of the pills was not the same as that of the legitimate products."

Jiang, whose last known residence was in New Zealand, was taken into custody in January 2011 by New Zealand law enforcement authorities after being named with Alarcon in a federal grand jury indictment, but fled shortly after being released on bond. Jiang remains a fugitive.

In a related case, Francis Ortiz Gonzalez, who worked as a "dropshipper" for Jiang in the United States, was sentenced by Judge Wu in January to two years in federal prison and ordered to pay $324,530 in restitution for trafficking counterfeit pharmaceuticals.