In Online Pharmacy Case, Sides Clash Over Legality of Business Model

U.S. District Judge Charles Breyer is presiding over the trial of three defendants who will assert advice of counsel as part of their defense.

Vanessa Blum

2012-10-01 04:59:57 PM

SAN FRANCISCO — The prosecutor called Safescripts Online "the Amazon.com of drugs." A defense lawyer pounced on the metaphor — and then U.S. District Judge Charles Breyer pounced on him.

In opening statements in a federal trial that began here on Monday, prosecutors accused three defendants of illegally distributing pharmaceuticals through the online pharmacy.

It's the second multidefendant online pharmacy case to go to trial before Breyer this year. And prosecutors are going in with a perfect record.

Assistant U.S. Attorney Tracie Brown opened her case with a reference to Amazon.com to help explain the online pharmacy's business model. Affiliate websites linked to Safescripts like a book review that directs readers to Amazon, Brown told jurors.

Defense lawyer Christopher Cannon of Sugarman & Cannon picked up the analogy in his opening, saying his client, Safescripts owner Christopher Napoli, aspired to run a successful and legitimate business, like Amazon.

However, Cannon earned a tongue-lashing from the bench when he took the comparison a step further, suggesting Safescripts, like the online book seller, sought to comply with federal, not state, regulations.

"I don't know if there's going to be evidence of Amazon in this case," Breyer said tartly. "I'm instructing the jury to disregard that statement."

Napoli, computer systems manager Daniel "DJ" Johnson and prescribing physician Joseph Carozza are charged with distributing controlled substances without a legitimate medical purpose between 2004 and 2006. The main drug sold by Safescripts was phentermine, a prescription diet drug.

Defense lawyers have taken an aggressive approach to the case, insisting their clients had good reasons to believe they were complying with the law. In their opening statements, each defense attorney referenced advice their clients sought and received from lawyers on the legality of their business, setting the stage for an advice-of-counsel defense.

Napoli and Johnson also face a money laundering charge for contracting with an overseas company to provide credit card processing.

Brown is trying the case with Assistant U.S. Attorney Kirstin Ault.

"This is a case about selling drugs online, illegally, for one reason — money," Brown told jurors.

Brown acknowledged that Safescripts did not sell highly addictive narcotics like heroin or cocaine, but she added, "they sure weren't selling things like blood pressure medication or allergy pills."

On the Safescripts website, customers picked their own drug, dosage and number of pills without receiving any advice from a doctor. Customers with a valid credit card had a 97 percent chance their order would be approved, she said.

One of Carozza's lawyers, Nicole Howell Neubert of Clarence Dyer & Cohen, countered that her client, a New York physician, denied thousands of prescription requests he reviewed for Safescripts.

"Was this different than a traditional doctor's office visit? Sure," she said. "But was it criminal? No."

Defense lawyers said federal law at the time did not require doctors to perform a face-to-face evaluation before prescribing medications. In 2008, Congress passed such a mandate, but by then, the men were out of the business.

The defendants followed the legislative debate closely and consulted with lawyers. They each paid taxes on their earnings, according to the defense.

"They were not a bunch of drug dealers. They were legitimate businesspeople," Cannon said.

Johnson's lawyer, solo practitioner Martín Sabelli, told jurors that Johnson would take the stand and testify about the legal advice he received while involved with Safescripts.

"For every millisecond, he believed in the legality of what he was doing," Sabelli said.

The Safescripts case stems from an investigation where Bay Area drug enforcement agents placed undercover orders for prescription pills and received shipments from several Internet pharmacies.

Prosecutors won convictions against two related defendants in a jury trial before Breyer earlier this year. Four others pleaded out, one defendant died following indictment and another remains a fugitive.

Trial is expected to continue through mid-November.