But that promise dissolved on Day One.
“We're sitting there, printing page after page of prescriptions off the Internet, and it's all for Lortab,” said Cloud, who along with business partner Kyp Curtis owns Ridgeway Mail-Order Pharmacy. “We looked at each other and realized we had 354 illegal prescriptions in our pharmacy. We're thinking, ‘Is someone gonna raid us right now?' ”
“In one day, this doctor had apparently seen 350 patients, all from different parts of the country. That's impossible,” Cloud said.
Cloud and Curtis entered the names of a few random patients into an Internet search engine. One patient, a man in Oklahoma, was the chairman of his local Kiwanis Club; another patient in Georgia was a small-business owner.
“We realized that these were real people ordering drugs over the Internet without a prescription,” Cloud said. “So, we picked up the phone and called the DEA.”
That phone call led to Cloud's extensive cooperation with the federal government as a confidential informant, months of wiretaps and the unraveling of one of the largest Internet drug-trade operations to date, with Cloud's testimony critical in the recent conviction of two Baltimore pharmacists who illegally sold 9,936,075 pills of hydrocodone over a two-year period.
It all began with a business opportunity.
Cloud, a pharmacy technician, and Curtis, a pharmacist, were contacted in early 2006 by a Florida man named Nick Cammarata, who said he represented Internet Health Enterprises. Cammarata said the online business was thriving because it saved patients money. The business was so prosperous, he told Cloud, it needed additional pharmacists capable of filling hundreds of prescriptions daily.
Cloud and Curtis assumed Cammarata meant all types of medications, from blood pressure pills to birth control. Instead, the unregulated online drug bazaar was trolling for small, rural, private pharmacies to add to its stable of doctors and pharmacists. At trial, Cammarata was identified as a key participant in the overarching conspiracy, recruiting and handling small pharmacies.
“These guys go around preying on little rural pharmacies because they are struggling and it's a huge money-making opportunity,” Cloud said. “They've just got people lined up across the country wanting to order these drugs off the Internet. They just don't have enough pharmacies to fill prescriptions.”
As a privately owned mail-order pharmacy capable of filling huge amounts of prescriptions, Ridgeway fit the bill. An added benefit was that Ridgeway uses automation and robotics to fill more than 1,000 prescriptions every day.
“I thought, instead of a corner drugstore where you bring your prescription in and they fill it, you do it on the Web and they outsource it,” Cloud said. “It seemed to make sense.”
The business partners told Cammarata they could handle at least 500 prescriptions every day, but they weren't entirely convinced they would ever get paid by the online company. Cloud asked Cammarata for a reference, and he told the men that another Bitterroot pharmacy - a direct competitor of Ridgeway's - was already working with IHE.
“I said, ‘Great. If you've got the business, I've got the capability,' ” Cloud said.
The next day, FedEx delivered a package containing bar code scanners and software for downloading the prescriptions online. The professionalism was enough to convince Cloud and Curtis, and the following day they were downloading 354 prescriptions from IHE's Web site - all for Lortab, a trademarked brand name of the opiate hydrocodone.
“We tried to find a prescription for something other than Lortab,” Curtis recalls. “I think we found one for muscle relaxers or something.”
A diversion officer with the Drug Enforcement Administration in Billings told Cloud and Curtis that the agency was familiar with Internet drug distributors, but that none had been linked to Montana. Cloud told the agent he believed it was going on elsewhere in the Bitterroot Valley.
Federal investigators arrived the next morning, the same day IHE was expecting the prescriptions to be filled and shipped.
The agents told Cloud not to fill the prescriptions, but to stall Cammarata instead, and go undercover to learn as much as possible about the conspiracy. Cloud signed a confidential informant agreement, and Ravalli County sheriff's officials dropped off phone taps and recorders.
The agents told Cloud and Curtis about a broader, nationwide investigation into a drug-distribution network based in Florida, and another related investigation into a pharmacy called NewCare in Maryland. Cloud would later testify at a federal courthouse in Baltimore during the NewCare pharmacists' three-week trial.
Anyone with a valid credit card can fill out a brief online questionnaire and receive painkillers through the mail within days, along with the guarantee of two or three refills. The customer never speaks to the doctor issuing the prescriptions, and only learns the doctor's name when the prescription arrives. It costs approximately $125 for the initial “consultation” and another $25 for standard shipping (overnight delivery is available at greater cost).
With 354 customers waiting for their orders, Cammarata called Cloud later in the morning, asking if the prescriptions had been filled. Cloud told him he was unable to print the pages, which led to a phone conversation with technical support. Cloud maintained that the pages would not print for several days before realizing he needed an excuse with legs.
“I think pretty good on my feet, but this was getting stressful,” he said. “I was starting to run out of excuses.”
Cloud had the idea to blame the delay on Curtis, telling Cammarata that his business partner was getting cold feet about the venture, and was not convinced the pharmacy would actually get paid. Cammarata put Cloud in touch with his boss, who provided him information about the company's finances, including account numbers and names of bank officers who could vouch for them.
Finally, Cammarata agreed to put Cloud in touch with another pharmacist who worked with IHE, Steven A. Sodipo, of NewCare Pharmacy in Baltimore. Sodipo would later be convicted for his role in the vast drug distribution network.
“He said everything was kosher, that it was good money, but not to fill too many prescriptions a day,” Cloud said. “He said, ‘You don't want to draw any negative attention.' ”
Cloud continued to stall Cammarata for several weeks, asking at one point if the businesses could join forces down the road, after Cloud and Curtis finished building a new pharmacy in Darby, so as not to jeopardize their existing business.
Meanwhile, the Montana Board of Pharmacy had scheduled an inspection of Ridgeway Pharmacy, so the DEA intervened, explaining that there was an ongoing investigation, and to stay clear of Ridgeway. That information would later end up blowing Cloud's cover, he said.
Growing impatient, Cammarata told Cloud he would fly to Missoula the next day, but Cloud explained he had to cook for a youth group of 60 kids at church - a true story. Cammarata said he would arrive the following day instead.
“And that was that,” Cloud said.
Eight armed officers surrounded the pharmacy before the meeting - “We had agents in the shed out back,” Cloud said - and Cloud and Curtis explained to their employees, in brief, what had been happening.
“I mean, they'd been seeing DEA agents come and go every day for weeks,” Cloud said. “We had to tell them something.”
Cammarata arrived on schedule, accompanied by a large, muscled “business associate,” Cloud said. The two showed Cloud and Curtis a laptop containing records of prescriptions that another pharmacist in the area had allegedly filled, trying to convince Cloud the enterprise was legitimate.
“The batteries went dead in the wires we were wearing, the meeting went on so long,” Cloud said.
Before leaving, Cammarata said he was going to spend a day or two down the valley, soliciting other pharmacies in Hamilton, and then travel to Columbia Falls for more of the same before returning to Florida.
Several days later, the Billings DEA agent told Cloud that news of the investigation had reached back to Cammarata, apparently through another Bitterroot pharmacist.
Mike Cooney, an administrator with Montana's Department of Labor and Industry, said he has “heard rumors” about a federal investigation down the Bitterroot, but has no details.
“We suspected that there might be something going on, but we figured when the feds are ready to talk to us they will,” he said. “I don't know if there are other pharmacists or other pharmacies.”
Bill Sybrant, an inspector with the Board of Pharmacy, said the Board of Pharmacy is not conducting any investigations in Ravalli County or elsewhere in Montana.
“I do know there was an Internet process, an East Coast operation attempting to get Montana pharmacies to provide services, which is an illegal operation,” Sybrant said. “But that's being done by a federal investigation. I have not received a complaint at this time against any of our licensees.”
Paul Jaster, a drug diversion investigator for the DEA's Billings field office who Cloud says told him that news of the investigation had leaked, did not return phone calls from the Missoulian.
Fearing for their safety, Cloud and Curtis told their families they might be in danger, and Cloud started carrying a gun.
Cammarata stopped returning phone calls, and a subpoena eventually arrived in Cloud's mailbox, instructing him to testify at Sodipo's trial. After numerous delays, Cloud flew to Baltimore.
Assistant U.S. Attorney for Maryland Andrea Smith, a lead prosecutor in the case against NewCare Pharmacy, proved at trial that in 2005, after joining the nationwide conspiracy, NewCare purchased approximately 4.2 million dosage units of hydrocodone from wholesale distributors, and between Jan. 1, 2006, and Oct. 10, 2006, NewCare purchased approximately 6.1 million dosage units of hydrocodone from wholesale distributors.
The national average of hydrocodone purchased by a pharmacy from its distributors was 154,439 doses. NewCare distributed more than 122,549 prescriptions, for a total of 9.9 million doses of hydrocodone to 26,790 patients in all 50 states and the District of Columbia.
The investigation into Cammarata and other alleged conspirators is ongoing, but court records explain that IHE recruited doctors and at least 53 pharmacies.
Standing in the midst of a major remodel at Ridgeway Pharmacy, Cloud and Curtis are doing better than ever. Last year, their success was honored when they made Entrepreneur magazine's Hot 500, a list of the fastest-growing small businesses in the nation. The 500 were selected from the Corporate Research Board's database of 19 million U.S. businesses.
“This would have all gone away if we had said, ‘Hey, we can make some quick money,' ” Cloud said, pointing around the bustling pharmacy. “But it was wrong. Anyone could see it was wrong.”
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Jenny wrote on Sep 25, 2008 1:22 PM:
" OMG. I believe this is the same guy I dated during that time. This all became apparent earlier this year when I received a letter stating that I had a wire tap on my phone. I had my attorney call to see what it was pertaining to and they said that he had been involved in the illegal online distribution of hydrocodone. Way to go guys. "
Shana Anderson wrote on Sep 22, 2008 11:18 AM: