DrugBuyers.Com: News Article: The Downfall of "World Express Rx"

Hello Everyone, thought this story was rather interesting as to how his operation was ran and how it ultimately led to his downfall, it provides valuable info into these IOPs, thought some of you might want to read it....

Purveyor of illicit pills grew rich before his fall

S.D. operator of Web site sold 'generic Viagra'

By Onell R. Soto
January 21, 2005

Mark Kolowich wasn't subtle.

He drove a silver Porsche 911 Turbo. The license plate was "BLUPIL." He lived in a downtown San Diego penthouse with his girlfriend, traveled to exotic locales and frequently spent more than $1,000 on dinner, authorities said.

Kolowich, 45, also was known to neighbors and in cyberspace as the go-to guy for Viagra the blue pill for impotence.

Today, a judge is scheduled to sentence him for assembling what authorities call possibly the largest Internet-based pharmaceutical distribution ring ever broken.

Federal officials say the international scope of his operation and the millions of dollars Kolowich reaped demonstrate the dramatic growth of illegal sales of pharmaceuticals over the Internet and the dangers to those who buy them.

When he was arrested in March, Kolowich had just hatched a deal to purchase a commercial pill-pressing machine to ramp up production of his "generic Viagra" in Tijuana, authorities said.

But there's no such thing as legal "generic Viagra."

Only the version made by Pfizer Inc. may be sold in the United States and many other countries and only with a prescription.

The shadowy practice of illegally trading in prescription drugs over the Internet has spawned countless Web sites and jammed inboxes with unsolicited e-mails.

With no oversight from regulators or doctors, buyers risk getting dangerous or worthless medications.

While Kolowich trafficked primarily in sex drugs such as fake and genuine Viagra, Levitra and Cialis, members of the ring also sold other drugs, some in combinations that could kill, authorities said.

Buyers "are playing Russian roulette with their lives," said Linda Phillips, of the U.S. Bureau of Immigration and Customs Enforcement. "They don't know what they're getting."

Operators of rogue Web sites don't care, said Phillips, who heads an Internet drug investigations unit. "Their main motivation is money," she said. "It's not public health and safety."

Legitimate Web sites require a prescription and check for problems, she said. Users can find such sites through the National Association of Boards of Pharmacy at www.nabp.net/vipps.

Pfizer has found highway paint and floor wax in bogus drugs. Even trained investigators sometimes can't tell the good from the bad without testing, said spokesman Bryant Haskins.

Business sense

When he was arrested, Kolowich had begun to shift from daily operation of the enterprise to making deals with other Internet operators to sell the drugs for him and process orders offshore, according to court documents.

Kolowich pleaded guilty April 30 to money laundering and conspiracy to import illegal prescription drugs, and agreed to forfeit funds in U.S., Mexican, German and Swiss banks, as well as property in Baja California.

Tom Warwick, Kolowich's lawyer, declined to discuss the case.

Authorities said the operation had links around the world and took in more than $6 million in 2003 alone.

When he pleaded guilty, Kolowich admitted the government had proof of illicit sales between 1999 and 2004 of at least $2.5 million but less than $7 million.

Several other ring members also have pleaded guilty, including his girlfriend, who joined him on exotic vacations and helped run the business; a Chula Vista pharmacist who agreed to manufacture fake Viagra; and a Chula Vista couple who processed the orders out of their home.

The case also led to the discovery of a Bahamas operation that filled thousands of orders and the arrests of two Florida men who authorities say worked with Kolowich and ran their own major illegal online pharmacy.

The investigation began with a tip from a shipping business worker who noted suspicious packages, and broadened when a courier was stopped at the San Ysidro border checkpoint with thousands of pills and a computer repairman turned over a pawned laptop computer with suspicious contents.

In the pawned laptop, investigators found correspondence between an Indian pharmaceutical company and "Dr. Mark Kolowich" in Mexico City, and an e-mail from Kolowich to an associate saying to ship "all those BLUE capsules" to a particular customer.

When authorities raided British warehouses holding $3.5 million worth of fake Viagra, they eventually linked the drug to the San Diego operation, according to court records.

Ultimately, investigators eavesdropped while Kolowich, by then under arrest and working for the government, negotiated for the manufacture of fake Mexican-made Viagra with people in a yacht at Shelter Island marina.

A growing business

As with many bogus Internet pharmacies, Kolowich started small.

While Odette Pidermann, his longtime girlfriend, wrote grant applications for a San Diego jobs agency, Kolowich started his operation out of her Santee home, according to court records.

He bought drugs from Mexican pharmacies, smuggled them into the United States and shipped them to people who ordered them, prosecutor Melanie Pierson said in court papers.

She said the business, World Express Rx, grew quickly, and Kolowich moved it to Mission Hills, then to a Market Street loft in downtown San Diego.

When Kolowich and Pidermann moved to the downtown penthouse, they shifted the order-filling operation to the Chula Vista couple's home, she said.

He turned from buying drugs in Mexico to dealing with underground manufacturers and eventually with pharmaceutical suppliers in India and China who shipped raw materials in bulk to Mexico, authorities said.

He started a credit-card processing business to launder profits and took in partners to ship pills in bulk from Mexico to the Bahamas for distribution into the United States, authorities said.

Authorities arrested Kolowich on March 22 at Lindbergh Field as he returned from a ski trip with Pidermann. The bust came several months after a number of police agencies working independently realized they were all focusing on Kolowich and coordinated their investigations.

'He's the shark'

The investigation didn't end with Kolowich's arrest.

He began cooperating with investigators and in April met with John Eloy Aldaz, a Chula Vista pharmacist who once had a Mexican medical practice, and Gustavo García Uriza, who worked at a Tijuana pharmaceutical company, investigators said.

Aboard a yacht, the three discussed expanding the business, according to a court affidavit.

"It's our year, but we have to know how to take maximum advantage of it," Aldaz wrote García in an e-mail a month later. "You and I are the minnows and he's the shark."

Aldaz and García were arrested in July. García was sentenced to a month in prison and three years of supervised release. At his sentencing, Aldaz said he was embarrassed by his acts.

"There are no words you can say for the shame that I feel," he told a San Diego federal judge before he was sentenced to three years' probation.

Pidermann pleaded guilty to conspiracy to import prescription drugs and was sentenced to 18 months in federal prison.

At the hearing today, Kolowich faces a maximum of 20 years in prison.

Although Kolowich is now behind bars, others have taken his place.

His old Web site yesterday directed users to another site offering what it said were Mexican drugs.

"No prescription needed," the site trumpeted while offering "generic" versions of impotence pills.

Some of them were blue.

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¤ ~ Is there another life? Shall I awake and find this all a dream? There must be; we cannot be created for this type of suffering ~ Keats ¤