STATE OF FLORIDA DEPARTMENT OF HEALTH DEPARTMENT OF HEALTH, through its BUREAU OF PHARMACY SERVICES, Petitioner, - Case No: vs. (DOH: 01-04784) CRYSTAL COAST, INC., a Florida Corporation, Respondent. ADMINISTRATIVE COMPLAINT Notice is hereby provided that Petitioner, Department of Health by and through its Bureau of Pharmacy Services (the "bureau”), intends to impose against Respondent, Crystal Coast, Inc., Crystal Coast’), a Florida corporation an administrative fine in the amount of twenty-nine thousand six hundred dollars ($29,600), pursuant to section 499.066(3), Florida Statutes, and revoke the prescription drug wholesaler permit number 22:01158, that authorizes . Crystal Coast to operate as a prescription drug wholesaler in Florida. In support of the intended fina! agency action the bureau states: (1) Petitioner, Department of Health (hereinafter “the Department”), through the Bureau of Pharmacy Services (‘the Bureau”), 2818-A Mahan Drive, Tallahassee, Florida, 32308, is the state agency charged with implementing and enforcing the provisions of the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes (“F.S.”), including the regulation of the acquisition and. distribution of prescription drugs in Florida as well as the permitting of entities to engage in this activity. The prescription drug wholesaler permit is established under the Florida Drug and Cosmetic Act, Chapter 499, F.S. (2) Respondent, Crystal Coast, Inc., is a Florida registered corporation whose principle place of business is 2700 S.W. 37" Avenue, Suite 2, Miami, Dade County, Florida, 33133. Respondent is permitted as a prescription drug wholesaler (permit number 22:01158) pursuant to the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes. This permit will expire on January 31, 2001. Respondent’s principal’s include Elenore K. Walker, is the President of Crystal Coast and is a 50% owner of Crystal Coast; William P. Walker is a Director of Crystal Coast and has been involved in the prescription drug wholesale operations of Crystal Coast; Sheldon L. Kresler is a Director of Crystal Coast and has been involved in the prescription drug wholesale operations of Crystal Coast; and Karen Malten Kresler is a 50% owner of Crystal Coast. (3) On or about April 9, 2001 (invoice DT520); April 17, 2001 (invoice 523AQ); April 19, 2001 (invoice 524AQ); April 23, 2001 (invoice 525AQ); April 25, 2001 (invoice 526AQ); May 15, 2001 (invoice 527AQ); and May 23, 2001 (invoice 528AQ) Crystal Coast sold NutropinAQ under its prescription drug wholesaler permit to Diversified Trading, Inc., a. permitted prescription drug wholesaler located at 3590 N.W. 54" Street, Suite 2 & 3 in Ft Lauderdale, Florida. . (4) As to the transactions alleged in paragraph (3), Crystal Coast produced documentation to the federal Office of Criminal investigations reflecting the source of the Nutropin AQ z as California cw (Gary Strydom) located at 4091 Redwood Avenue, Marvista, California, 90065 and Life Extension NV, located at Kaya Toni Kunchi #51 in Curacao, Netherlands Antiles. This historical documentation for previous distributions of prescription drugs is commonly referred to as a “pedigree paper.” A pedigree paper is a record required by S. 499.0121(6)(d), F.S., to be provided by a prescription drug wholesaler distributing a prescription drug to another prescription drug wholesaler when the distributing wholesaler is not the authorized distributor of record for the prescription drug which is the subject of the transaction. (5) Crystal Coast is not an authorized distributor of record for the Nutropin AQ sold in paragraph (3). (6) In addition, Crystal Coast produced copies of purchase records to the. federal Office of Criminal Investigations that indicate the Nutropin AQ wholesaled by Crystal Coast as alleged in paragraph (3) was purchased from Life Extension, located at Kaya Toni Kunchi #51 Q in Curacao, Netherlands Antiles. | (7) California CW (Gary Strydom) located at 4091 Redwood Avenue, Marvista, California, 90065, is not currently and has not been permitted under Chapter 499, F.S., at any time relevant and material to the transactions alleged in paragraph (3), to engage in the wholesale distribution of any prescription drug from, in or into the State of Florida. California CW would have been required to hold a valid permit as an Out-of-State Prescription Drug Wholesaler as provided by s. 499.012, F.S., to engage in the wholesale distribution of prescription drugs prior to selling or physically distributing any prescription drug to Crystal Coast in Florida. (8) Furthermore, neither California CW, Gary Strydom, or any person or company located at 4091 Redwood Avenue, Marvista, California, is permitted with the California Board of Pharmacy to engage in the wholesale distribution of prescription drugs in or from California. (9) Life Extension NV, located at Kaya Toni Kunchi #51 in Curacao, Netherlands Antiles is not currently and has not been permitted under Chapter 499, F.S., at any time relevant and material to the transactions alleged in paragraph (3), to engage in the wholesale distribution of any prescription drug from, in or into the State of Florida. Life Extension would have been required to hold a valid permit as an Out-of-State Prescription Drug Wholesaler as provided by s. 499.012, F.S., to engage in the wholesale distribution of prescription drugs prior to selling or physically distributing any prescription drug to Crystal Coast in Florida. (10) When Crystal Coast acquired the Nutropin AQ from either California CW (Gary Strydom), or Life Extension, it purchased or received a prescription drug from a person that is not authorized under Chapter 499, F.S., to distribute prescription drugs and thereby violated s. 499.005(14), F.S. (11) Furthermore, since California CW (Gary Strydom) was not permitted to engage in the wholesale distribution of prescription drugs in Florida or California, and Life Extension was not permitted to engage in the wholesale distribution of prescription drugs in or into Florida, the Nutropin AQ which is the subject of this order was adulterated pursuant to s. 499.006(2) and (3), F.S. Therefore Crystal Coast purchased and received adulterated drugs in violation of ss. 499.005(3) and (4), F.S. (12) As a result, when Crystal Coast sold and distributed the prescription drugs pursuant to the transactions identified in paragraph (3), it sold and distributed adulterated prescription drugs in violation of ss. 499.005(1), (3), and (4), F.S. (13) One of the required elements on a pedigree paper is inclusion of the quantity distributed by lot number per Rule 64F-12.012(3), Florida Administrative Code. Crystal Coast’s pecigree papers referenced in paragraph (4) do not include lot numbers. Specifically the pedigree paper associated with invoice 524AQ dated April 19, 2001, does not include lot numbers for the Nutropin AQ distributed in that transaction. Therefore Crystal Coast violated s. 499.005(18), F.S., and Rule 64F-12.012(3), Florida Administrative Code. (14) Business records prepared by Diversified Trading documenting the receipt of ‘Nutropin AQ in invoice 524AQ dated April 19, 2001, document its receipt of 17 vials of Nutropin AQ, with lot number L9504A3 and expiration date December 2001. (15) Nutropin AQ with lot number L9504A3 and expiration date December 2001 is a counterfeit prescription drug. (16) On June 1, June 28, and June 29, 2001, an agent with the Bureau attempted an inspection of Crystal Coast pursuant to the authority under s. 499.051, F.S., during the designated business hours communicated by Crystal Coast to the department in its application. No one was present at Crystal Coast to allow for a physical inspection of the permitted te ae ee Le pe establishment or the inspection of records related to prescription drug wholesale activity. The failure to allow inspection as provided under s. 499.051, F.S., constitutes the constructive refusal to allow the department to enter or inspect an establishment in which drugs are sold, brokered, or held and to allow inspection of any records of that establishment related to prescription drug wholesale activity. This constructive refusal to allow inspection of the establishment and prescription drug wholesaling records is a violation of s. 499.005(6)(a) and (b), F.S. (17) On June 1, 2001, the Bureau's agent left a written request at Crystal Coast's permitted establishment and at Crystal Coast's attorney's office since no responsible person was physically present at Crystal Coast, to produce by June 4, 2001, records of all acquisitions of prescription drugs and all distributions of prescription drugs for the preceding two years. This request was made pursuant to s. 499.051, F.S. Furthermore, Crystal Coast is required to maintain these records and make them available for inspection by the Bureau under s. 499.0121 (6), F.S., and Rule 64F-12.012, Florida Administrative Code. (18) on June 4, 2001, the Bureau's agent presented herself at the permitted éstablishment of Crystal Coast for the production of records per the written request referred in paragraph (12). The records were not produced. (19) - The Bureau sent an email request on June 8, 2001 to the attorney of Crystal Coast reiterating the request for records referenced in paragraph (17). This communication resulted in a second request by the bureau for production of these records and a production date of Monday, June 12, 2001 was scheduled. — . (20) On June 12, 2001, the Bureau’s agent presented herself at the time and place scheduled for production of the requested records as set forth in paragraph (19). A representative of Crystal Coast produced records of Crystal Coast’s distribution of prescription drugs but did not produce any records. documenting the purchase or other acquisition of prescription drugs by Crystal Coast. (21) To date, Crystal Coast has not produced any records of its purchases of prescription drugs to the Bureau as required under Chapter 499, F.S. (22) As a result, Crystal Coast has failed to maintain records as required by ss. 499.001-499.081 and rules adopted under those sections, which is a violation of s. 499.005(18), FS. . (23) Furthermore, Crystal Coast has failed to produce records as required by chapter 499, F.S., and therefore has violated s. 499.005(6)(b), F.S. (24) The violations of Chapter 499, F.S., by Crystal Coast as set forth in this complaint constitute sufficient grounds for DOH to impose an administrative fine of twenty-nine thousand six hundred dollars ($29,600) or impose any other penalty authorized by chapter 499, F.S. and chapter 64F-12, Florida Administrative Code against the Respondents. (25) The intended fine is within the limits prescribed for such violations by section 499.066(3), F.S. and Rule 64F-12.024, Florida Administrative Code due to the threat to public health posed by these violations. In particular, Respondent's violations jeopardize public health because (a) Crystal Coast purchased or otherwise acquired and distributed adulterated prescription drugs, (b) Records indicate that some of the prescription drug Nutropin AQ that was wholesaled by Crystal Coast was counterfeit, and (c) Crystal Coast repeatedly failed to allow inspection of the physical establishment and records it is required to maintain and produce under Chapter 499, F.S., related to the wholesale distribution of prescription drugs. (26) Rule 64F-12.024 (4), Florida Administrative Code sets the range of the penalty for violations of the Florida Drug and Cosmetic Act, Chapter 499, F.S. as follows and the bureau intends to impose the fines and action as noted. (a) the purchase of a prescription drug from an unauthorized source is $250 to $1,000 per violation per day (intended fine: 7 transactions at $1,000 each = $7,000), (b) - refusing entry and inspection or make records available is $500 to $5,000 per violation per day and suspension or revocation of the permit with a fine (intended fine and agency action: one occurrence at $500 + two occurrences at $5,000 = $10,500 and revocation of the permit), . (c) the sale or delivery of an adulterated or adulterate and counterfeit prescription drug is $250 - $5,000 per violation per day and suspension or revocation of the permit with a fine (intended fine and agency action: 6 transactions at $1,000 each + one counterfeit transaction at $5,000 = $11,000 and revocation of the permit), and (d) failing to maintain records by omitting lot numbers in pedigree papers is $250 - $5,000 per violation per day and suspension or revocation of the permit with a fine (intended fine: 6 records at $100 each + 1 record at $500 for the counterfeit transaction = $1,100). Crystal Coast’s sources of the prescription drug Nutropin AQ that is the subject of this complaint were not permitted in their resident states to engage in the wholesale distribution of prescription drugs in interstate commerce in the United States. Therefore the purchase of prescription drugs ‘from these sources is a more serious violation than purchasing prescription drugs from a source that is permitted to wholesale prescription drugs in its resident state but has not yet obtained an Out-of-State Prescription Drug Wholesaler permit from the State of Florida to wholesale prescription drugs as counterfeit. Finally, the repeated refusal to allow inspection of records warrants the department to impose the upper level of the range of penalty for the violations. (27) Section 499.067(1), Florida Statutes (FS), authorizes the department to deny, suspend, or revoke a permit if it finds that there has been a substantial failure to comply with ss. 499.001-499.081 or chapter 465, chapter 893, or chapter 501, or the rules adopted under any of those sections or chapters. (28) In addition, s. 499.067(3)(c), F.S., authorizes the department to deny, suspend or revoke a permit if the permittee has violated any provisions of ss. 499.001-499.081 or rules adopted under those sections. (29) The violations alleged in this complaint evidence a substantial failure to comply and are substantial violations of the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes. The unlawful acquisition practices of Crystal Coast facilitated the distribution of adulterated and counterfeit prescription drugs. Additionally, the purchasing and distribution practices of prescription drugs by Crystal Coast as well as the repeated failure to allow inspection of records related to the wholesale distribution of prescription drugs present a public health threat and the continued authority to engage in the wholesale distribution of prescription drugs poses a danger and is not in the best interest of the public health, safety and welfare. Finally, the practices of Crystal Coast as alleged in this complaint represent a substantial disregard for the regulatory scheme regarding the wholesaling of prescription drugs and undermines the regulatory structure established by federal and state law for the protection of the public health that warrant revocation of the authority to engage in the wholesale distribution of prescription drugs under permit 22:01158. (30) You have the right to request an administrative hearing pursuant to sections 420.569 and 120.57, F.S., if you wish to challenge the imposition of the administrative fine and the intended agency action to revoke permit 22:01158. Such proceedings are governed by Rule 28-106, Florida Administrative Code.. (a) In order to obtain a formal proceeding under section 120.57(1), F.S., your request for an administrative hearing must conform to the requirements of Rule 28-106.201, Florida Administrative Code, and must state which issues of material fact you dispute. Failure to dispute material issues of fact in your request for a hearing may be treated by the department as an election by you of an ‘informal proceeding pursuant to section 120.57(2), F.S. _ (b) A petition for administrative hearing must be in writing and must be received by Mr. Theodore M. Henderson, Agency Clerk for the Department, within twenty-one (21 ) days from the receipt of this complaint. The address of the Agency Clerk is 4052 Bald Cypress Way, BIN # A02, Tallahassee FL 32399-1703. The Agency Clerk’s facsimile number is 850-410- 1448. (c) Mediation is not available as an alternative remedy. (d) Your failure to submit a petition for hearing within 21 days from receipt of this compiaint will constitute a waiver of your right to an administrative hearing, under Florida Administrative Code Rule 28-106.111 and this complaint shall become a "final order". (e) Should this complaint become a final order, a party who is adversely affected by it is entitled to judicial review pursuant to section 120.68, Fla. Stat. Review proceedings are governed by the Florida Rules of Appellate Procedure. Such proceedings may be commenced by filing one copy of a Notice of Appeal with the Agency Clerk of the Department of Health and a second copy, accompanied by the filing fees required by law, with the.Court of Appeal in the appropriate District Court. The notice must be filed within 30 days of rendition of the final order. (31) The undersigned certifies that a true copy of this administrative complaint was _ sent by U.S. Certified Mail, Return Receipt Requested, to Louis J. Terminello, Esquire, the registered agent and attorney for Crystal Coast, Inc., at 2700 S.W. 37" Avenue, Miami, Florida, 33133-2742, this ott “_ day of July, 2001. WA Jefry Hill, RiPh., O.Ph. Chief of Pharmacy Services 2818-A Mahan Drive _ Tallahassee, Florida 32308 Telephone: (850) 922-5190 Copy also furnished to: Counsel for the Department: Robert P. Daniti Senior Attorney 4052 Bald Cypress Way, Bin A02 Tallahassee, Florida 32399-0700 (850) 413-4021; (850) 413 8743-Fax Florida. Bar No. 191599

Docket for Case No: 01-003108