Two Brentwood-based brothers were found guilty Monday of federal drug trafficking and money laundering charges for creating a bogus pharmacy to obtain and distribute large quantities of OxyContin and other prescription narcotics to black market customers.
Berry Kabov, 46, and his 33-year-old sibling, Dalibor “Dabo” Kabov, were convicted in Los Angeles federal court of being at the center of a scheme that illegally sold bulk shipments of prescription opiate painkillers — including oxycodone, which is commonly marketed under the brand name OxyContin.
The Kabovs were found guilty of conspiracy to distribute narcotics, distribution of oxycodone, conspiracy to import narcotics, importation of anabolic steroids, money laundering and subscribing to false tax returns.
As a result of the verdicts, the brothers face decades behind bars at sentencing March 29 by U.S. District Judge Dolly M. Gee.
“These defendants used their pharmacy as a front for drug dealing, and they used multiple bank accounts to conceal their illicit proceeds,” said U.S. Attorney Eileen M. Decker.
“Prescription drug abuse is an epidemic in this country that causes immense harm, and the use of the pharmacy allowed the defendants to increase greatly the volume of their business and distribute narcotics around the nation.
In addition to operating as de facto drug dealers, these defendants cheated the U.S. tax system by failing to report approximately $1.5 million in income while living a life of luxury.”
According to evidence introduced at trial, the Kabov brothers used Global Compounding in West Los Angeles to sell quantities of drugs to customers across the country.
During the investigation, authorities seized shipments that contained thousands of hidden oxycodone pills that the Kabov brothers had shipped 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.
To conceal those black market drug sales, the Kabovs used their pharmacy to generate records that falsely indicated that prescriptions had been filled in the names of identity theft victims.
From June 2012 through December 2014, the pharmacy ordered nearly 100,000 oxycodone pills, yet it reported only half of those pills to state authorities who track prescription drug sale.
There was a 15-month period with no reporting at all, and there were shortfalls in the tens of thousands of pills when the pharmacy did file reports.
“These individuals engaged in one of the most egregious, fraudulent acts we’ve seen on the part of a DEA registrant,” said Drug Enforcement Administration Special Agent in Charge Steve Comer. “They completely exploited the system to acquire dangerous and addictive prescription drugs by legal means with the primary intent of selling them on the black market.
This conviction should serve as a warning to others so inclined to abuse the system. In the midst of a nation-wide opioid epidemic that is taking 90 lives a day, we’re leveraging all of our resources to bring illicit prescription drug traffickers like these to justice.”
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 indictment details how the brothers used the pharmacy to illegally order bulk quantities of testosterone, oxandrolone and nandrolone.
On federal tax returns, the Kabovs understated their income by about $1.5 million. They falsely claimed to have suffered net losses in 2011 and 2012, while they were flying in private jets, staying penthouse suites, and purchasing new luxury cars, such as a $100,000 Corvette.
“After amassing large quantities of cash from the black market sale of prescription drugs, the Kabov brothers attempted to legitimize these ill-gotten profits through the use of their pharmacy and financial institutions,” said Aimee Schabilion, acting special agent in charge of IRS Criminal Investigation.
Evidence showed that at one point, Global Compounding was the top purchaser of oxycodone among all pharmacies in the Los Angeles area, ordering three times more oxycodone than the second-largest purchaser.
–City News Service
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