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Intellectual Property Rights
03/11/2013

Orange County man charged with selling counterfeit sexual dysfunction drugs over the Internet

Orange County man charged with selling counterfeit sexual dysfunction drugs over the Internet
Orange County man charged with selling counterfeit sexual dysfunction drugs over the Internet

SANTA ANA, Calif. – A Yorba Linda man made his initial appearance in federal court Friday afternoon following his indictment for allegedly using Craigslist to sell a variety of counterfeit sexual dysfunction medications, which he claimed to buyers were genuine.

Nathan Welter, 39, was taken into custody Friday morning at his residence by special agents with U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI). Welter is charged in an eight-count indictment handed down March 6 with trafficking in counterfeit goods. Each count carries a maximum penalty of 10 years in prison and a fine of up $2 million. Welter, who pleaded not guilty Friday, is free on $50,000 bond pending trial, which is scheduled for April 30.

Search warrant affidavits state that Welter advertised Cialis, Viagra, and Levitra for sale without a prescription on Craigslist. According to the affidavits, Welter offered the tablets at a price of $6 to $10 each, claiming in many of his postings that the medications were "real." Subsequent chemical analysis of some of the seized tablets showed that the counterfeit pills contained a different active ingredient than the one used in genuine versions of the pills.

"When it comes to purchasing medications over the Internet, never has the expression 'buyer beware' had a greater ring of truth," said Claude Arnold, special agent in charge for HSI Los Angeles. "Imposter drugs like these pose a serious threat to consumers who mistakenly assume these substances are safe."

Suspicions about Welter's activities first arose in August 2011 and February 2012 when U.S. Customs and Border Protection (CBP) intercepted and seized three parcels containing counterfeit Cialis and Viagra tablets that were being shipped to Welter from China. According to search warrant affidavits, CBP warned Welter in March 2012 that counterfeit Viagra had been sent to him. Then, in August of last year, CBP seized another eight packages addressed to Welter from China that also contained counterfeit Cialis and Viagra tablets. Welter used three different addresses in Orange County to receive these parcels.

"Despite the vast amounts of cargo entering the United States, CBP officers focus intently on preventing dangerous and harmful products such as these from reaching consumers," said Todd C. Owen, director, CBP Field Operations Los Angeles. "In this case, the counterfeit drugs were detected by our officers and, working with our partners at HSI, this unsafe, illegal enterprise was put out of business."

In September of last year, HSI special agents executed federal search warrants for Welter's residence, vehicle, and a package at his rented United States postal box. The searches led to the seizure of nearly 9,000 counterfeit erectile dysfunction tablets, phony medical labels and packaging materials, along with more than $40,000 in cash. Had the counterfeit medications seized in connection with this case been genuine, they would have retailed for more than $125,000.

In fiscal year 2012, intellectual property rights enforcement by HSI and CBP led to the seizure of more than 22,000 items and 697 websites involved in trafficking these goods. The seized goods had a total value of more than $1.26 billion, based upon the manufacturer's suggested retail price had the products been legitimate.