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October 5, 2014Washington, DC, United StatesIntellectual Property Rights and Commercial Fraud

3 east Texas residents indicted in prescription drug smuggling ring

WASHINGTON — Three east Texas residents have been indicted on charges associated with their alleged smuggling of imitation, unapproved and misbranded prescription drugs from China, the Department of Justice announced Monday.

This case was investigated by U.S. Food and Drug Administration's (FDA) Office of Criminal Investigations, and U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Wanda Hollis, 63, Tom Giddens, 57, and Catherine Nix, 41, all from Athens, Texas, were each indicted on the following charges:

  • one felony count of conspiracy to smuggle merchandise into the United States,
  • seven counts of causing the introduction of misbranded drugs into interstate commerce with the intent to defraud or mislead,
  • seven counts of smuggling, and
  • one count of tampering with a witness.

Giddens was also charged with two additional counts of tampering; Nix was charged with one additional tampering count. All three defendants were also charged with misdemeanor counts of causing misbranded imitation drugs to be introduced into interstate commerce. Nix was arrested Oct. 2 in Athens. Giddens and Hollis surrendered Oct. 6.

According to the indictment, the defendants conspired to smuggle at least 30 known shipments, totaling about 100,000 pills, from China to Texas. As alleged in the indictment, the shipments contained bogus imitations of Xanax, Valium, sibutramine, Cialis, Viagra and Stilnox (which is marketed in the United States as Ambien). None of the pills seized and tested were legitimate; all either contained incorrect active ingredients or were sub-potent.

The defendants also attempted to conceal their smuggling by using shipping labels that concealed the contents of their shipments, including customs declarations falsely describing the contents as "gifts" or "toys" with low declared monetary values, and by using multiple addresses in an effort to reduce the likelihood of seizures by U.S. Customs authorities. Additionally, the indictment states that the defendants instructed family members to destroy evidence once they became aware that the FDA was investigating them.

"The smuggling and sale of counterfeit prescription drugs puts the public's health and safety at risk," said Acting Assistant Attorney General Joyce R. Branda for the Justice Department's Civil Division. "Consumers should know that the drugs they are buying are what they purported to be and not misbranded to look like name-brand products that could ultimately do them more harm than good."

"A key element of FDA's mission to protect the public's health is to ensure that safe and effective prescription drugs are properly distributed via the supply chain and dispensed to the ultimate consumer, and that includes ensuring that those prescription drugs contain the treatments that patients expect," said Acting Director Philip J. Walsky of FDA's Office of Criminal Investigations. "We will continue to pursue and bring to justice those who would put the public's health at risk by introducing illegal prescription drugs."

This case is being prosecuted by Trial Attorney John W.M. Claud of the Civil Division's Consumer Protection Branch, and Assistant U.S. Attorney Allen Hurst of the Eastern District of Texas.

Charges set forth in an indictment are merely accusations and do not constitute proof of guilt. Every defendant is presumed to be innocent unless and until proven guilty.

Updated: 10/07/2014