Head of Cumberland Distribution gets 15-year sentence for drug diversion scam

gavel and money
The president of the former Cumberland Distribution has been sentenced to federal prison for running a $50 million drug diversion scheme. (AVNphotolab/Getty Images )

A Texas man who turned a drug diversion scheme into a $50 million business has bought himself a 15-year jail sentence.

Jerrod Nichols Smith, 48, of Houston, Texas, has been sentenced to 15 years in federal prison and ordered to forfeit $1.4 million.

Smith, the president of the now defunct Cumberland Distribution, was indicted in 2013 along with Charles Jeffrey Edwards, 56, and Brenda Edwards, 47, also of Houston, for operating the drug diversion scheme for nearly three years. The case was investigated by federal authorities including the FDA. 

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They were accused of buying millions of dollars of prescription drugs from unlicensed suppliers who, in turn, bought the drugs from patients in and around New York and Miami. In most instances, Smith had these drugs shipped to Cumberland’s Nashville, Tennessee, warehouse where they were cleaned, sorted, re-packaged and shipped to independent pharmacies around the country. They created fake documents that indicated they had bought them from legal suppliers. 

The drugs included HIV/AIDS medications, antipsychotic medications, antidepressants, blood pressure medications and diabetes medications. But pharmacies reported problems with drugs, including prescription drug bottles containing the wrong medicine, the wrong dosage information and foreign objects. In one case, a bottle was filled with breath fresheners.    

Charles and Brenda Edwards previously pleaded guilty to related charges. Charles Edwards was sentenced to six years in prison and ordered to forfeit $1.4 million. Brenda Edwards will be sentenced later this year.