In fraud case targeting HIV meds, Florida man gets 15 years in prison

A year after a Florida man was arrested for his alleged involvement in a nationwide scheme to distribute fake HIV medicines, a U.S. district judge has ordered the man to serve 15 years in prison.

Lazaro Hernandez, 51, admitted to “running a criminal enterprise” with co-conspirators and diverting meds "to make money," he said at the sentencing in Fort Lauderdale, Florida. According to the Department of Justice (DOJ) statement on Hernandez’s arrest, the criminals set up licensed distributors to sell illegally acquired and adulterated drugs to wholesale pharma distributors.

The meds then ended up at pharmacies across the country and in the hands of many unsuspecting patients over the span of two years.  

Not only did the scheme involve HIV meds with errors in their package inserts, such as typos and missing information, but in “at least several instances” the products sold to wholesalers contained the wrong medicine, broken pills and even pebbles in place of the drugs, District Judge Raag Singhal pointed out. Hernandez and his co-conspirators made more than $230 million from the scheme, which was then allegedly laundered through several Miami corporations.

There’s no evidence detailing exactly how much Hernandez himself made from the crimes, but his cut was estimated to be around $5 million, according to his attorney.

The DOJ’s prosecutor, Alexander Pogozelski, called it a “very novel scheme” that risked patient health.

“We really need to send a message, a clear message of deterrence that these types of novel schemes to evade regulatory structures, evade the FDA, and put patients at harm simply for greed and profit need to be punished severely,” Pogozelski said at the sentencing.  

Gilead Sciences, one of the victims in the case, called Hernandez “one of the kingpins” of the counterfeit scheme and is pleased by the “exceptional work” of Pogozelski and his team, a company spokesperson told Fierce Pharma in an emailed statement.

“His sentencing for 15 years in prison should serve as a deterrent to counterfeiters and help protect patients,” the spokesperson added. “This sentencing further protects patient safety and the integrity of prescription medications in the U.S. supply chain. Gilead will continue to pursue necessary measures, including working closely with the FDA, FBI and prosecutors, to protect public health and safety by thwarting illegal pharmaceutical distribution.”

Gilead recently won $175.2 million as the result of a separate HIV fraud case, in which dozens of defendants allegedly fraudulently enrolled people in Gilead’s preexposure prophylaxis access program, then resold the PrEP drugs that came for free thanks to the program. That judgment came after two settlements, one for $33 million and one for an undisclosed amount, and another ruling worth $43.8 million in Gilead’s favor.