WASHINGTON - Two physicians have pleaded guilty to conspiracy for their participation in an Internet pharmacy business that generated more than $126 million in gross revenues from the illegal sale of prescription pharmaceuticals, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney Karen P. Hewitt for the Southern District of California has announced.

Chandresh Shah, M.D., 51, of Smyrna, Ga., pleaded guilty today in San Diego before U.S. District Judge Irma E. Gonzalez to one count of conspiracy to illegally distribute controlled substances and agreed to forfeit $16,674.

On July 8, 2008, Gerald Morris, M.D., 37, of Houston, also pleaded guilty before Judge Gonzalez to one count of conspiracy to illegally distribute controlled substances and agreed to forfeit $52,446.
Shah and Morris were indicted on July 27, 2007, with 16 other defendants for their role in a conspiracy to operate an international online pharmaceutical distribution network known as Affpower. According to the indictment, the Affpower enterprise sold controlled and non-controlled prescription drugs through numerous affiliated Web sites to customers who lacked prescriptions for the drugs from a personal physician. From August 2004 to June 2006, the Affpower enterprise allegedly received more than one million Internet orders for controlled and non-controlled prescription pharmaceuticals from customers in all 50 U.S. states.

In their plea agreements, both Morris and Shah admitted that they and other doctors issued drug prescriptions, not in the course of diagnosing and treating medical conditions, but to facilitate the sale of prescription pharmaceuticals pre-selected by customers and for the doctors' own personal profit. Morris and Shah also admitted Affpower enterprise doctors conducted no physical or mental examinations before issuing prescriptions, had no contact with customers and had no physician-patient relationship with any customer for whom the doctors prescribed drugs. Morris and Shah also admitted that Web sites advertising the Affpower enterprise's business contained materially false representations, including inaccurate assurances that the enterprise met or exceeded all regulations governing prescription pharmaceuticals sales.

At sentencing, Shah and Morris both face a maximum of five years in prison and $250,000 fines for conspiracy to illegally distribute controlled substances. Morris is scheduled to be sentenced on April 13, 2009. Shah's sentencing is scheduled for April 20, 2009. Seven other defendants named in the 313-count indictment have previously pleaded guilty. Trial for the remaining defendants is set for Feb. 24, 2009.

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