Distributor President Gets 15 Years for $60M Drug Scheme
Distributor President Gets 15 Years for $60M Drug Scheme
Prescription drug diversion scheme operating out of Nashville sold nearly $60 million in secondhand pills to pharmacies nationwide.
Jerrod Nichols Smith, 48, of Houston, Texas, was sentenced on July 17, 2018, in U.S. District Court to 15 years in federal prison, announced U.S. Attorney Don Cochran of the Middle District of Tennessee. Visiting United States District Judge Billy Wilson also ordered Smith to forfeit $1.4 million.
Smith, along with Charles Jeffrey Edwards, 56, and Brenda Edwards, 47, of Houston, was indicted in January 2013 and charged with operating a 32-month, $50 million drug diversion scheme, in which tainted pharmaceuticals were shipped from a warehouse in Nashville to pharmacies around the country.
Smith was the former president of Cumberland Distribution, Inc. (āCumberlandā), a company with its headquarters in Houston, and which ran drug warehouses at two locations:
- 5425 Harding Place, Nashville, TN 37217
- 1419 Donelson Pike, Nashville, TN 37217
Evidence at trial established that, from December 2006 through August 2009, Smith and Jeff Edwards purchased millions of dollars of prescription drugs from unlicensed suppliers who had previously purchased the drugs from patients in and around New York and Miami.
Generally, the diverted drugs included drugs used to combat HIV/AIDS; antipsychotic medications; anti-depressants; blood pressure medications; diabetes medications and others.
Although these companies were licensed to sell drugs, Smith and Jeff Edwards used them as pass-through companies to create the appearance that Cumberland was purchasing drugs from licensed suppliers, when Cumberland was purchasing diverted drugs from un-licensed suppliers in New York and Miami.
Numerous pharmacies reported problems with drugs they purchased from Cumberland, including prescription drug bottles containing the wrong medicine; the wrong dosage information; and foreign objects inside.
Thereafter, in order to evade authorities, Smith and his co-conspirators rented another warehouse, utilized freight forwarding companies to receive drug shipments, set up private email accounts, purchased burner phones and hired a private pilot to fly drugs to Nashville.
Approximate date(s) of the diversion:
01/01/2006
Where the Diversion Occurred:
Cumberland Distribution, Inc.
1419 Donelson Pike, Nashville, TN 37217
Type of Healthcare Facility:
Wholesaler
Person Diverting:
Jerrod Nichols Smith, Charles Jeffrey Edwards, and Brenda Edwards
Profession of the person diverting:
All Other
Has the incident been reported?
e.g. to local law enforcement, county board of health, state licensure board, and/or federal DEA or FDA authorities?
Yes
To whom has the incident been reported?
Food and Drug Administration (FDA)
