Two Owners of West L.A. Pharmacy Who Made Millions Illegally Distributing Prescription Drugs Sentenced to over a Decade in Prison

          LOS ANGELES – Two brothers who owned a West Los Angeles pharmacy and were convicted of illegally selling prescription opioids and other narcotics to black market customers across the United States were sentenced late Wednesday, with each man being ordered to serve 121 months in federal prison.

          Berry Kabov, 48, and his brother Dalibor “Dabo” Kabov, 35, both residents of Brentwood, were sentenced by United States District Judge Dolly M. Gee. The Kabov brothers operated Global Compounding Pharmacy, a pharmacy that was located in West Los Angeles.

          Following a three-week jury trial in early 2017, the brothers were convicted of illegally selling the opioid narcotics oxycodone, hydromorphone and hydrocodone. The wide-ranging conspiracy, which also illegally imported anabolic steroids, resulted in the Kabov brothers earning more than $3 million and cheating the Internal Revenue Service by failing to report $1.5 million on their federal tax returns.

          “It is disturbing that both defendants claim to have done nothing wrong. That is a mirage. There was overwhelming evidence of guilt,” Judge Gee said at Wednesday’s hearing, adding that the Kabov brothers showed “no remorse” for their crimes.

          The Kabov brothers were found guilty of conspiracy to distribute narcotics, distribution of oxycodone, conspiracy to import controlled drugs, importation of anabolic steroids, money laundering and subscribing to false tax returns.

          “In the midst of a national opioid epidemic, these defendants used a seemingly legitimate pharmacy as a front to flood the black market with dangerous opioids for their own personal profit,” said United States Attorney Nick Hanna. “The lengthy sentences imposed should send a resounding message that medical and pharmacy professionals who seek to profit from the spread of opiate addiction will be met with severe punishment.”

          “Our nation is facing what is arguably the worst drug crisis in American history, in large part due to the ravenous greed of illicit prescription drug traffickers like the Kabov brothers,” said DEA Special Agent in Charge David J. Downing. “Their sentences should serve as a warning to others that would defraud and exploit the public. The DEA and its law enforcement partners will not tolerate creative rackets that profit from the opioid epidemic.”

          Prosecutors argued in court documents that the Kabovs orchestrated a “years-long scheme to exploit the nation’s epidemic-level addiction to powerful prescription opioids,” and that the brothers “rose from mail-order drug dealers – sending drug parcels to Ohio for cash – to owners of a Los Angeles pharmacy that sold millions of dollars of oxycodone, hydromorphone, and hydrocodone on the black market.”

          The Kabov brothers used Global Compounding to sell bulk quantities of oxycodone to customers across the country. During the investigation, authorities seized shipments containing thousands of oxycodone pills sent by the Kabov brothers to customers in and around Columbus, Ohio. These customers in turn made cash deposits into Kabov-controlled bank accounts or simply shipped bulk cash to the brothers in Southern California.

          The evidence also included recorded calls between Berry Kabov and a cooperating informant, during which Berry Kabov described oxycodone pills as “gold” selling for as much as “50 bucks a pill” in areas like New York. Berry Kabov offered to ship as many as 4,000 oxycodone pills per week to the informant, bragging that “we have a thing that we can move easy.”

          After drug wholesalers cut off Global Compounding, the Kabovs began manufacturing their own opioid pills after obtaining a $20,000 pill press from China and acquiring enough bulk powder to make 100,000 maximum-strength pills. “In total, from the wholesale orders and on-site manufacturing, the Kabovs disseminated over 300,000 pills of opiates to the black market during the conspiracy, which accounts only for what they sold after opening Global Compounding,” prosecutors wrote in their sentencing brief.

          To conceal the black market drug sales that brought them approximately $3 million, the Kabovs conspired with a doctor to create fraudulent prescriptions in the names of identity theft victims. The Kabovs also reported false information to California authorities making it appear that drugs had been dispensed to those identity theft victims. Prosecutors said in court documents that planting that fraudulent information “ma[de] the victims falsely appear to be narcotic addicts,” thus putting them at risk of being denied necessary treatment from a legitimate physician checking their prescription histories. Global Compounding also failed to report sales of 98,000 pills of opiates to California authorities who track prescription drug sales.

          As part of the scheme, the brothers also used the names of other identity theft victims – members of a longshoremen labor union’s health insurance plan – to submit fraudulent claims that generated another $2.6 million from the plan, prosecutors said in court papers. In October 2017, the owner of a Long Beach “medi-spa” involved in the fraud scheme, Erica Carey, pleaded guilty to a federal wire fraud charge and admitted conspiring with the Kabovs in exchange for more than $300,000 in kickbacks.

          In addition to the charges related to oxycodone, the brothers were found guilty of illegally importing anabolic steroids purchased from a wholesale drug distributor located in Hubei, China. The brothers used the pharmacy to illegally order bulk quantities of testosterone, oxandrolone and nandrolone. Those drugs were shipped in parcels that were falsely labeled to make the drugs appear to be industrial powders.

          On federal tax returns, the Kabovs understated their income by approximately $1.5 million. They falsely claimed to have suffered net losses in 2011 and 2012, while they were flying in private jets, staying in penthouse suites, and purchasing new luxury cars, including a $100,000 Corvette.

          In addition to the prison sentences, Judge Gee ordered the Kabovs to pay $350,834 in restitution to the Internal Revenue Service, with each brother being ordered to pay just over $175,000.

          Global Compounding was found guilty of 17 counts including drug trafficking, drug importation, and tax fraud. Judge Gee sentenced the now-defunct pharmacy to a one-year term of probation.

          The investigation into the Kabov brothers and Global Compounding was conducted by the Drug Enforcement Administration, IRS Criminal Investigation, the United States Postal Inspection Service, the Los Angeles Police Department, and the California Board of Pharmacy.

          The case is being prosecuted by Assistant United States Attorney Benjamin R. Barron of the Organized Crime Drug Enforcement Task Force, and Assistant United States Attorney Matthew O’Brien of the Environmental and Community Safety Crimes Section.