The US government on Tuesday charged Rochester Drug Co-Operative (RDC), one of the largest pharma distribution companies in the US, and its former CEO Laurence Doud III and former Chief of Compliance Officer William Pietruszewski with conspiracy to distribute controlled substances oxycodone and fentanyl for non-medical reasons, conspiracy to defraud the Drug Enforcement Administration (DEA), and purposefully failing to file suspicious order reports to the DEA, amounting to acts that contributed to the opioid crisis.

According to the complaint, for approximately five years since 2012, RDC received and filled more than 1.5 million pharmaceutical orders but only reported four suspicious orders to the DEA out of the approximately 8,000 it should have reported in order to avoid the DEA opening an investigation, which would result in its consumers being shut down and negative impact profit. This was allegedly done under the direction of Doud and Pietruszewski, as well as other senior executives. Additionally, during this time, RDC “knowingly and intentionally” distributed these “highly addictive opioids” to consumers that it knew were being sold and abused and dispensed to those for non-medical reasons, in violation of federal narcotics laws. Further, RDC continued to distribute controlled substances to pharmacies that triggered “red flags” of diversion, including 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; dispensing to out-of-state patients; filling controlled substances prescriptions issued by practitioners acting outside the scope of their medical practice, under investigation by law enforcement, or on RDC’s “watch list”; and accepting pharmacies that had been terminated by other distributors. According to the complaint, at Doud’s behest, the company continued to oversupply these opioids to obtain larger profit.

This pharma company and its executives are the first to face criminal charges for their role in the opioid crisis.

US Attorney for the Southern District of New York on Tuesday announced a settlement agreement and consent decree with RDC in which it accepted responsibility for its conduct by making admissions and stipulating to the accuracy of the Statement of Facts, agreed to pay $20 million in penalties, agreed to reform and enhance its Controlled Substances Act compliance program, and submitted to supervision by an independent monitor for three years. Under this agreement, the US agrees to defer prosecution of RDC for five years, and at the end of that period will dismiss the charges. The consent decree is subject to final approval by the court.

Both executives face a maximum sentence of life in prison and a minimum of 10 years for drug trafficking and a maximum of five years for defrauding the government. Last week Pietruszewski pleaded guilty. On Tuesday, Doug pleaded not guilty.