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Intellectual Property Rights and Commercial Fraud
07/20/2020

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2 Ukrainian nationals plead guilty to smuggling counterfeit cancer, hepatitis drugs

HOUSTON – Two Ukrainian nationals pleaded guilty Friday to conspiracy to smuggle and distribute counterfeit cancer and hepatitis drugs into the United States.

This investigation was conducted by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) in Houston, Texas, and the Food and Drug Administration (FDA) Office of Criminal Investigations.

Ukrainian nationals Maksym Nienadov, 36, and Volodymyr Nikolaienko, 33, pleaded guilty July 17 in the Southern District of Texas to conspiracy, trafficking in counterfeit drugs and smuggling goods into the United States. Nienadov also admitted to introducing misbranded medicine into the U.S.

In June 2018, undercover HSI special agents began communicating with Nienadov about the illegal sale of Keytruda. This prompted a months-long exchange which also involved Nikolaienko and resulted in the unlawful sale of counterfeit or unapproved Keytruda, Abraxane and Epclusa. Neither Nienadov or Nikolaienko are medical doctors, pharmacists or licensed pharmaceutical wholesalers in the United States and did not have authorization to sell the drugs.

Merck & Co. manufactures Keytruda, a medicine to treat cancer, while Gilead Sciences Inc. manufactures Epclusa, a prescription drug for the treatment of hepatitis-C. Celgene Corporation is a wholly-owned subsidiary of Bristol Myers Squibb and manufactures the oncology product Abraxane. In their legitimate form, the FDA approved all three drugs for distribution in the U.S.

During the undercover investigation, law enforcement received Nienadov’s banking information, which included the name “Maksim Nenadov” and his Ukrainian bank account number. Authorities transferred $2,400 to his bank account for the purchase of the purported Keytruda. Soon after, they received a shipment from “Maxim Nenadov” which contained two boxes represented to contain Keytruda. However, the items were sent to Merck for testing and were determined to be counterfeit.

Authorities then negotiated the purchase of more Keytruda as well as Abraxane. The online messaging and email conversations resulted in a $3,400 undercover payment to Nienadov for the purchase of both drugs. On July 30, 2018, “Maxim Nenadov” sent two boxes of purported Keytruda and two boxes of supposed Abraxane to undercover agents. Merck and Celgene performed analyses and confirmed the packaging and medication to be counterfeit.

In late 2018, law enforcement also negotiated the undercover purchase of two boxes of purported Epclusa tablets from Nienadov and Nikolaienko for $6,000. Gilead identified the packaging and contents as counterfeit.

Nienadov and Nikolaienko were taken into custody April 18, 2019, after they arrived in the United States from Ukraine to discuss future unlawful shipments of pharmaceuticals.

“The production and trafficking of counterfeit pharmaceuticals poses a grave threat to the health and safety of unsuspecting consumers, impacts legitimate trade and compromises our national security,” said Mark Dawson, special agent in charge of HSI Houston. “Today’s convictions underscore HSI’s enduring commitment to work closely with our federal partners and private sector stakeholders to aggressively investigate these crimes and hold violators accountable.”

Sentencing has been set for Nov. 4 before Chief U.S. District Judge Lee H. Rosenthal. At that time, Nienadov and Nikolaienko face up to 20 years in prison and a possible $5 million fine. Both men will remain in custody pending that hearing.

Senior Trial Attorney Jeffrey Pearlman of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Sebastian Edwards of the Southern District of Texas are prosecuting the case. Former CCIPS Senior Trial Attorney Kebharu Smith assisted in the prosecution. In addition, the Criminal Division’s Office of International Affairs provided substantial assistance.

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Last Reviewed/Updated: 07/20/2020