Previously, on September 4, 2007, Lavery pleaded guilty to a forty-four count Indictment charging him with wire fraud conspiracy and wire fraud, money laundering, and conspiracy to engage in unlicensed wholesale distribution of prescription drugs, and false statements in a matter under the jurisdiction of the U.S. Food and Drug Administration.
The scheme, in which Lavery was found by Judge McAuliffe to be a leader and organizer, involved purchasing large quantities of Serostim from illegitimate sources in Palm Springs and Los Angeles, California at prices significantly below the price that the manufacturer charges pharmacies. Specifically, the Serostim was purchased from HIV infected patients and then reintroduced into the wholesale distribution chain by using false documentation to make it appear that the Serostim had come from legitimate licensed wholesalers when in fact it had been previously dispensed to HIV infected patients.
In furtherance of the scheme, Lavery purchased the Serostim from suppliers who had in turn purchased the Serostim directly from the HIV infected patients. Lavery worked with Beth Handy of Milford, NH who has also pleaded guilty to similar charges in U.S. District Court in Concord and is now awaiting sentencing. During the time frame of the scheme, Handy was licensed by the New Hampshire Board of Pharmacy as a wholesaler of prescription drugs doing business in the State of New Hampshire. Handy solicited licensed wholesalers of prescription.
Read the complete report at the U.S. Attorney's Web site.