Owner And Employee Of Medical Supply Distributor Charged With Medical Device And Over-The- Counter Drug Fraud Scheme

Press Release Owner And Employee Of Medical Supply Distributor Charged With Medical Device And Over-The- Counter Drug Fraud Scheme Thursday, December 21, 2023 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, Fernando McMillan, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration’s Office of Criminal Investigations (“FDA-OCI”), and Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MOSES RABINOWITZ, a/k/a “Mark Rabin,” and MENACHIM SAMBER with conspiracy to commit wire fraud and conspiracy to obtain pre-retail medical products by fraud or deception in connection with a scheme to obtain medical devices and over-the-counter (“OTC”) drugs not approved for sale in the U.S. at discounted prices under the false pretense that they would be sold outside the U.S. RABINOWITZ and SAMBER were arrested today and will be presented before U.S. Magistrate Judge Victoria Reznick. U.S. Attorney Damian Williams said: “As alleged, the defendants defrauded manufacturers producing medical devices and over-the-counter drugs of millions of dollars and sold foreign medical products not approved for sale in the U.S. to unwitting consumers. These charges should serve as a warning to fraudsters who think they can benefit financially by undermining the safety of our country’s medical supply chain.” FDA-OCI Special Agent in Charge Fernando McMillan: “The FDA is fully committed to the vigorous criminal investigation and prosecution of individuals who threaten the health and safety of American consumers by causing misbranded drugs and medical devices to be distributed. Our office will continue to pursue and bring to justice those who place profits above the public health.” USPIS Inspector in Charge Daniel B. Brubaker: “One of the USPIS's top priorities is to protect consumers from individuals who seek to profit from selling FDA-regulated products not intended for sale in the U.S. Postal Inspectors relentlessly pursue criminals who further their criminal enterprises through the U.S. Mail. In this case, Postal Inspectors collaborated with agents from FDA-OCI to help safeguard both the U.S. health care industry and American public. I applaud their efforts on this investigation.” According to the allegations contained in the Indictment:[1] RABINOWITZ was the owner and president of medical supply distributor Trasco, LLC (“Trasco”) and the owner of Trasco affiliates GlobalMed International, Ltd. (“GlobalMed”) and Panamedica Trading, Inc. (“Panamedica”). SAMBER was an employee of Trasco whose functions included purchasing and sales. From at least in or about January 2014 up to and including on or about January 3, 2019, RABINOWITZ and SAMBER engaged in a conspiracy to obtain FDA-regulated medical devices and OTC drugs that were not intended for sale in the U.S. at deeply discounted prices from manufacturers (the Victim Companies”) by falsely and fraudulently representing that the products would be sold and distributed outside of the U.S. when, in fact, RABINOWITZ and SAMBER, from the outset, intended to and did sell and distribute those medical devices and OTC drugs at a substantial profit to wholesalers, distributors, and others in the U.S. The manufacturers relied on RABINOWITZ, SAMBER, and other co-conspirators’ false and fraudulent representations and sold their products to RABINOWITZ, SAMBER, Trasco, GobalMed, and Panamedica at deeply discounted prices, resulting in losses of more than $5 million. RABINOWITZ, SAMBER, and other co-conspirators created and caused to be created false and fraudulent documentation, which they provided and caused to be provided to the Victim Companies to conceal their fraudulent scheme. At times, RABINOWITZ, SAMBER, and other co-conspirators arranged for the fraudulently obtained products to be diverted directly to locations within the U.S. and for “dummy” shipments to be exported instead in order to generate documentation to provide to the Victim Companies as proof of export. RABINOWITZ, SAMBER, and other Trasco employees acting at their direction often removed the foreign language packaging or labeling on the medical devices and OTC drugs so that the provenance of the foreign medical products would also be hidden from the domestic consumers and distributors to whom they were sold. * * * RABINOWITZ, 42, of Clifton, New Jersey, and SAMBER, 29, of Hollywood, Florida, were both charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to obtain pre-retail medical products by fraud or deception, which carries a maximum sentence of 15 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Mr. Williams praised the outstanding investigative work of the FDA-OCI and the USPIS. This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described herein should be treated as an allegation. Contact Nicholas Biase (212) 637-2600 Updated December 21, 2023 Attachment U.S. V. Rabinowitz and Samber Indictment.pdf [PDF, 3 MB] Topics Financial Fraud Export Control Component USAO - New York, Southern Press Release Number: 23-445

Press Release Owner And Employee Of Medical Supply Distributor Charged With Medical Device And Over-The- Counter Drug Fraud Scheme Thursday, December 21, 2023 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Damian Williams, the United States Attorney for the Southern District of New York, Fernando McMillan, Special Agent in Charge of the New York Field Office of the U.S. Food and Drug Administration’s Office of Criminal Investigations (“FDA-OCI”), and Daniel B. Brubaker, the Inspector in Charge of the New York Office of the U.S. Postal Inspection Service (“USPIS”), announced today the unsealing of an Indictment charging MOSES RABINOWITZ, a/k/a “Mark Rabin,” and MENACHIM SAMBER with conspiracy to commit wire fraud and conspiracy to obtain pre-retail medical products by fraud or deception in connection with a scheme to obtain medical devices and over-the-counter (“OTC”) drugs not approved for sale in the U.S. at discounted prices under the false pretense that they would be sold outside the U.S. RABINOWITZ and SAMBER were arrested today and will be presented before U.S. Magistrate Judge Victoria Reznick. U.S. Attorney Damian Williams said: “As alleged, the defendants defrauded manufacturers producing medical devices and over-the-counter drugs of millions of dollars and sold foreign medical products not approved for sale in the U.S. to unwitting consumers. These charges should serve as a warning to fraudsters who think they can benefit financially by undermining the safety of our country’s medical supply chain.” FDA-OCI Special Agent in Charge Fernando McMillan: “The FDA is fully committed to the vigorous criminal investigation and prosecution of individuals who threaten the health and safety of American consumers by causing misbranded drugs and medical devices to be distributed. Our office will continue to pursue and bring to justice those who place profits above the public health.” USPIS Inspector in Charge Daniel B. Brubaker: “One of the USPIS's top priorities is to protect consumers from individuals who seek to profit from selling FDA-regulated products not intended for sale in the U.S. Postal Inspectors relentlessly pursue criminals who further their criminal enterprises through the U.S. Mail. In this case, Postal Inspectors collaborated with agents from FDA-OCI to help safeguard both the U.S. health care industry and American public. I applaud their efforts on this investigation.” According to the allegations contained in the Indictment:[1] RABINOWITZ was the owner and president of medical supply distributor Trasco, LLC (“Trasco”) and the owner of Trasco affiliates GlobalMed International, Ltd. (“GlobalMed”) and Panamedica Trading, Inc. (“Panamedica”). SAMBER was an employee of Trasco whose functions included purchasing and sales. From at least in or about January 2014 up to and including on or about January 3, 2019, RABINOWITZ and SAMBER engaged in a conspiracy to obtain FDA-regulated medical devices and OTC drugs that were not intended for sale in the U.S. at deeply discounted prices from manufacturers (the Victim Companies”) by falsely and fraudulently representing that the products would be sold and distributed outside of the U.S. when, in fact, RABINOWITZ and SAMBER, from the outset, intended to and did sell and distribute those medical devices and OTC drugs at a substantial profit to wholesalers, distributors, and others in the U.S. The manufacturers relied on RABINOWITZ, SAMBER, and other co-conspirators’ false and fraudulent representations and sold their products to RABINOWITZ, SAMBER, Trasco, GobalMed, and Panamedica at deeply discounted prices, resulting in losses of more than $5 million. RABINOWITZ, SAMBER, and other co-conspirators created and caused to be created false and fraudulent documentation, which they provided and caused to be provided to the Victim Companies to conceal their fraudulent scheme. At times, RABINOWITZ, SAMBER, and other co-conspirators arranged for the fraudulently obtained products to be diverted directly to locations within the U.S. and for “dummy” shipments to be exported instead in order to generate documentation to provide to the Victim Companies as proof of export. RABINOWITZ, SAMBER, and other Trasco employees acting at their direction often removed the foreign language packaging or labeling on the medical devices and OTC drugs so that the provenance of the foreign medical products would also be hidden from the domestic consumers and distributors to whom they were sold. * * * RABINOWITZ, 42, of Clifton, New Jersey, and SAMBER, 29, of Hollywood, Florida, were both charged with one count of wire fraud conspiracy, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to obtain pre-retail medical products by fraud or deception, which carries a maximum sentence of 15 years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge. Mr. Williams praised the outstanding investigative work of the FDA-OCI and the USPIS. This case is being handled by the Office’s White Plains Division. Assistant U.S. Attorney Jeffrey C. Coffman is in charge of the prosecution. The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty. [1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations, and every fact described herein should be treated as an allegation. Contact Nicholas Biase (212) 637-2600 Updated December 21, 2023 Attachment U.S. V. Rabinowitz and Samber Indictment.pdf [PDF, 3 MB] Topics Financial Fraud Export Control Component USAO - New York, Southern Press Release Number: 23-445