LOS ANGELES - Two brothers were arrested today on federal drug trafficking and money laundering charges that allege they used a bogus pharmacy to obtain and distribute large quantities of prescription narcotics, including OxyContin, to black-market customers.
The two Brentwood men are charged in a 40-count indictment that alleges the operators of Global Compounding Pharmacy in West Los Angeles also illegally imported large quantities of anabolic steroids.
The two men arrested this morning are Berry Kabov, 44, and his brother, Dalibor Kabov (also known as “Dabo"), 32. The indictment that charges the Kabovs, which was unsealed this morning, also names Global Compounding, LLC, as a defendant.
Berry and Dalibor Kabov are expected to be arraigned on the indictment this afternoon in United States District Court in Los Angeles.
A search warrant also unsealed today details how the Kabov brothers used Los Angeles as a base to sell bulk shipments of prescription drugs - including oxycodone, which is commonly sold under the brand name OxyContin - to black market customers across the country. Investigators seized parcels containing thousands of hidden oxycodone pills that the Kabov brothers attempted to ship to customers in and around Columbus, Ohio, according to the search warrant affidavit, which states that the customers in turn made cash deposits into Kabov-controlled bank accounts or simply shipped bulk cash to the brothers in Southern California. During recorded calls with an informant that are described in the affidavit, Berry Kabov coordinated the shipments and explained that he could sell oxycodone in New York for as much as $50 per pill.
The court documents unsealed today allege that the Kabov brothers operated Global Compounding as a bogus pharmacy to facilitate the acquisition of prescription drugs from the wholesale market. DEA administrative records show that, between June 2012 and January 2014, the Kabov brothers purchased massive quantities of drugs, including nearly 100,000 in oxycodone pills, as well as tens of thousands of pills of hydrocodone (commonly sold under the brand name Vicodin) and hydromorphone (commonly sold under the brand name Dilaudid).
DEA administrative records show that Global Compounding was the top purchaser of oxycodone among all pharmacies in the Los Angeles area in 2014, and that it ordered three times more oxycodone than the second-largest purchaser. Surveillance of Global Compounding has shown that few, if any, people who appear to be customers ever go the pharmacy.
The affidavit also described an inspection at Global Compounding by the California Board of Pharmacy in January 2014 that led investigators to conclude “that Global Compounding is not a legitimate pharmacy and in fact is a façade for a drug trafficking operation." In coming to this conclusion, the state investigators noted a lack of over-the-counter drug products ordinarily carried by legitimate pharmacies and records indicating that many of the prescriptions purportedly being filled by the pharmacy were for patients outside of the Los Angeles area, according to the affidavit.
The indictment also alleges that the brothers engaged in money laundering and the structuring of cash transactions to avoid federal reporting requirements. The search warrant identifies more than $1.5 million in structured cash deposits into multiple bank accounts controlled by the Kabov brothers. The affidavit details extravagant expenditures, including private jets from the Los Angeles area to Las Vegas and other luxury items.
In addition to the charges related to oxycodone, the indictment alleges that the brothers illegally imported anabolic steroids purchased from a wholesale drug distributor located in Hubei, China. The indictment details how the brothers used the pharmacy to illegally order bulk quantities of testosterone, oxandrolone and nandrolone.
If convicted of the charges in the indictment, Berry Kabov and Dalibor Kabov each would face a statutory maximum sentence of 430 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
The investigation into the Kabov brothers and Global Compounding is being conducted by the Drug Enforcement Administration, the United States Postal Inspection Service, the Los Angeles Police Department and the California Board of Pharmacy.
Source: U.S. Department of Justice, Office of the United States Attorneys
