Miami businessman Lazaro Hernandez was arrested in mid-June on charges of directing a $230 million scheme to distribute “adulterated and misbranded” HIV prescription drugs through a network of wholesalers and pharmacies to unsuspecting patients nationwide.
Hernandez, 51, was released just before the Fourth of July holiday weekend on a $1.4 million bond and faces a mid-July arraignment in a federal indictment accusing him of conspiring to defraud the U.S. Food and Drug Administration by selling falsely labeled drugs to the unsuspecting patients.
His defense attorney, Marc Seitles, overcame strong opposition by federal prosecutors to the defendant’s bond, which was granted by Magistrate Judge Jonathan Goodman. Hernandez was released from the Federal Detention Center on June 30, records show.
“This is not the court of assumption. This is a court of law,“ Seitles said at Hernandez’s detention hearing in Miami federal court. “You cannot proceed just on the evidence of prosecutors banging their chest. You have to present evidence of risk of flight and danger to the community, and they have not presented one shred of it.”
The indictment accuses Hernandez and unnamed co-conspirators of illegally acquiring large amounts of HIV medication and creating false drug labels to make it appear that they were purchased legitimately between 2019 and 2021. Prosecutors allege the HIV prescription drugs were actually bought from people who had stolen them, ripped them off in burglaries or obtained them through healthcare fraud.
Hernandez and the others set up licensed wholesale drug distribution companies in Florida, Connecticut, New Jersey and New York, the indictment says. The Hernandez-led network then used those companies to sell the adulterated HIV drugs at steep discounts to other operators of wholesale pharmaceutical distributors in Mississippi, Maryland and New York.
In turn, those distributors then resold the adulterated HIV drugs to pharmacies, which billed health insurers, including Medicare, while dispensing them to patients, according to the indictment.
Prosecutors with the U.S. Attorney’s Office in Miami and Justice Department said in a news release that the “wholesale pharmaceutical distributors paid Hernandez and his co-conspirators more than $230 million for the illegally acquired and adulterated prescription drugs.”
The indictment further accuses Hernandez of laundering those proceeds through several corporations in Miami. If convicted, Hernandez faces a maximum penalty of more than 100 years in prison.
The case was investigated by U.S. agents with Health and Human Services and the Federal Deposit Insurance Corporation.