Laurence Doud, III, the former CEO of the Rochester Drug Co-Operative, Inc. (RDC) was recently sentenced to 27 months in prison for conspiring to unlawfully distribute oxycodone and fentanyl and for conspiring to defraud the Drug Enforcement Administration (DEA).
According to the indictment and evidence presented at trial, Doud knowingly and intentionally violated the federal narcotics laws by distributing “dangerous, highly addictive opioids to pharmacy customers that he knew were being sold and used illicitly.” Doud and other senior managers at RDC directed the company to supply large quantities of oxycodone, fentanyl, and other dangerous drugs to customers that its own compliance personnel found were distributing the drugs to individuals without a medical need for them.
Furthering that point, RDC – through the direction of Doud and other executives – continued to distribute controlled substances to the pharmacies even after identifying “red flags,” such as dispensing highly abused controlled substances in large quantities; dispensing primarily controlled substances; dispensing quantities of controlled substances in amounts consistently higher than accepted medical standards; accepting a high percentage of cash for controlled substance prescriptions; and filling controlled substance prescriptions that were issued by practitioners who were acting outside the scope of their medical practice, were under investigation by law enforcement, or were on RDC’s own watch list.
With respect to the conspiracy charges, during that same time, Doud attempted to conceal RDC’s illegal distribution of controlled substances from the DEA and other law enforcement agencies. To this end, Doud opted not to investigate, monitor, or report to the DEA certain pharmacy customers that he and others at RDC knew were diverting controlled substances for illegitimate use. Additionally, at Doud’s instructions, RDC opened new customer accounts without conducting due diligence and supplied certain customers – some of whom were terminated by other distributors – with dangerous controlled substances, contrary to the company’s representations to the DEA.
Doud also caused the company to avoid filing mandatory suspicious order reports with the DEA, which impeded the DEA’s ability to identify and prevent the illegal dispensing of these drugs. This is despite allegations that Doud ordered that shipments to pharmacies continue, not wanting to “turn off stores because that would affect the sales of RDC” and he felt it was the DEA’s role to police pharmacies, not RDC’s.
In addition to the 27 months in prison, the 79-year-old Doud was sentenced to three years of supervised release and ordered to pay a $100,000 fine.
U.S. Attorney Damian Williams said, “Laurence Doud cared more about his own paycheck than his responsibility as CEO of RDC to prevent dangerous opioids from making their way to pharmacies, drug dealers, and people struggling with addiction. The sentence imposed today holds Doud responsible for shipping massive amounts of dangerous and highly addictive oxycodone and fentanyl to pharmacies that he knew were illegally dispensing those controlled substances and reaffirms this Office’s commitment to seeking justice for the many victims of the opioid epidemic.”
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RDC previously reached an agreement with the United States government, agreeing to pay a $20 million fine to avoid prosecution. In addition to the fine, the company also submitted to a five-year supervisory period by which they would be supervised by an independent monitor.
Also involved was the former Chief Compliance Officer (CCO) of RFC, William Pietruszewski. Pietruszewski pled guilty in 2019 and testified against Doud. On March 29, 2023, Pietruszewski was spared prison time, likely in part to his testimony against Doud.
Another individual involved was Michael Paulsen, the former owner of Regal Remedies, a Staten Island pharmacy that was shut down for selling large quantities of opioids. Paulsen ordered more than 170,000 oxycodone pills for his pharmacy over the course of 3.5 years and only 1/3 of those pills were dispensed with a prescription. The other 2/3 were sold to clients without a prescription.