United States Attorney Richard B. Roper
Northern District of Texas

MAN PLEADS GUILTY TO CONSPIRACY AND MONEY LAUNDERING
CHARGES IN INTERNET PHARMACY CASE

Sherman Ted Solomon Agrees to Forfeit Nearly $5.7 Million in Cash and Funds
Plus Millions of Dollars of Exclusive Properties in Orange County, Florida

DALLAS— In federal court yesterday, Sherman Ted Solomon, 64, currently of Plano, Texas, pled guilty before U.S. District Judge Jorge A. Solis to one count of conspiracy to distribute Schedule III and IV controlled substances and one count of conspiracy to launder the illegally obtained proceeds, in relation to his operation of an Internet Facilitation Center (IFC) website, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. An IFC operates store front websites to facilitate the distribution of controlled substances to Internet customers. The maximum penalties the Court can impose on Solomon are a 25-year sentence, a $750,000 fine and restitution. Sentencing has been set for June 25, 2008.

In documents filed in Court today, Solomon also agreed to forfeit nearly $5.7 million in funds, a vehicle and two pieces of real property in Orange County, Florida. In addition, as part of the plea agreement, the government and Solomon have agreed that a sentence of not longer than 84 months is an appropriate disposition of the case. In the event the Court imposes a longer sentence, Solomon will be given the option of withdrawing his guilty plea.

In 2003, Solomon began discussing with others selling controlled substances over the Internet through an IFC. Two of these individuals operated MS Network as a call center that telephonically conducted “medical consults” with the Internet customers of IFCs. By March 2004, Solomon’s company, Solandra Group, L.L.C. operated and IFC, using discountrx.com; e-discountrx.com; and legitimatesources.com. Initially, Solomon operated Solandra Group/IFC from his residence in Kissimmee, Florida, but from April 2004 until May 2005, he operated it from his residence in Orlando, Florida. From May 2005 until September 21, 2005, Solomon operated it from his residence in Windermere, Florida. In addition to the sites mentioned above, Solomon also distributed controlled substances through affiliated websites, such as oneworldpharmacy.com; medstomail.com; 1medweb.com; rxhomedelivery.com; andprivacyfirst.com. Each of the affiliated websites were “owned” by other individuals who agreed to offer controlled substances for sale through the Internet, and then redirect the customers to Solomon’s IFC.

In the late summer or fall of 2003, Dr. Bill McArthur and others created a call center in Cleveland, Mississippi called Delta Network, Inc. McArthur was the Medical Director; his father, Frank McArthur, was the operations manager. In Spring 2004, Delta became known as Managing Associates Co. and Frank McArthur became its sole proprietor and ran its daily business operations until September 2005.

Solomon admitted that from May 2004 through September 2005, he conspired with the McArthurs, the affiliate owners, the pharmacy owners, and others to distribute controlled substances over the Internet trough Solandra Group/IFC without the issuance of legitimate prescriptions, that is, outside the scope of professional practice and not for a legitimate medical purpose. Solomon also admitted that during the same time period, he conspired with them and would wire transfer the proceeds from and related to the sale of the controlled substances to the participants in the conspiracy for their part in facilitating the distribution of controlled substances. From October 2004 through September 21, 2005, Solomon’s IFC and affiliates received approximately $13,139,535 from Internet customers fro the distribution of controlled substances.

From at least November 2004 through September 2005, Solomon conspired with Rakesh Johar Saran, the owner/operator of more than 20 pharmacies in the Northern District of Texas, to fill the drug orders from the e-discountrx.com (and affiliated websites) internet customers. Saran handled the pharmacies’ finances through his companies Carrington Health Care Services and/or Infiniti Services Group. Between October 21, 2004, until September 15, 2005, Solomon wire transferred approximately $901,527 to Rakesh Johar Saran’s bank as payment to Saran’s pharmacies for filling the e-discountrx.com customers’ drug orders.

Rakesh Johar Saran pled guilty in November 2006 to several charges related to his role in the conspiracy. He has not yet been sentenced. Dr. Bill McArthur pled guilty to a drug conspiracy charge pursuant to a Rule 20 transfer to the Southern District of Georgia and is to be sentenced next week. Frank McArthur pled guilty to a drug conspiracy and a money laundering conspiracy in December 2007 and is scheduled to be sentenced on May 9, 2008.

Solomon admitted that during the conspiracy, 90% or more of the controlled substances sold by e-discountrx.com was hydrocodone; the remaining 10% included alprazolam and phentermine. Hydrocodone is a Schedule III controlled substance; alprazolam and phentermine are Schedule IV controlled substances.

Solomon also admitted that the physicians didn’t conduct telephone consultations with Internet customers nor did they review the medical records or online questionnaires of the internet customers. The physicians didn’t verify the identities of the Internet customers; theydidn’t establish a diagnosis; didn’t discuss risks and benefits and didn’t attempt to provide appropriate follow-up care.

According to the documents filed in Court, during the pendency of the conspiracy and while Solomon was a participant in the conspiracy, the government can readily prove that Solomon could reasonably foresee the possession with intent to distribute or the distribution in excess of two million hydrocodone pills.

U.S. Attorney Roper praised the investigative efforts of the Drug Enforcement Administration, the Internal Revenue Service - Criminal Investigation, the Federal Bureau of Investigation and the Food and Drug Administration. The case is being prosecuted by Assistant U.S. Attorneys Candy Heath, Mark Penley and John DeLaGarza.

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