LawFuel.com – Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and William J. Bratton, Commissioner of the New York City Police Department (“NYPD”), announced today additional criminal charges filed in Manhattan federal court against CARLOS PANIAGUA (“CARLOS PANIAGUA”), JOSE OSVALDO PANIAGUA, JR., (“OSVALDO PANIAGUA JR.”), and JOSE RAFAEL PANIAGUA (“RAFAEL PANIAGUA”), who operated a massive prescription drug ring out of the Joaquin Grocery & Deli Store (the “Joaquin Grocery”) in the Bronx, New York, for orchestrating the October 2010 near-fatal shooting of a rival prescription drug trafficker. CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA, along with three other defendants, were initially arrested in June 2014 and charged with trafficking in oxycodone, HIV medication, and other prescription drugs. Concurrently with their arrests, and with the assistance of the New York City Law Department, the doors to the Joaquin Grocery were padlocked pursuant to a judicial order from Bronx Supreme Court. The case is assigned to U.S. District Judge Andrew L. Carter.
In addition, two additional members of the conspiracy to distribute oxycodone – VICTOR LUNA, and RAMON PICHARDO – were arrested this morning pursuant to the Superseding Indictment returned yesterday. As alleged, LUNA and PICHARDO distributed oxycodone to and with the individuals who operated the Joaquin Grocery.
Manhattan U.S. Attorney Preet Bharara said: “As with traditional drugs, prescription drug trafficking is a gateway to violence and a plague on the neighborhoods in which it is carried out. As alleged, the defendants not only turned their store into a drug market that took advantage of impoverished Medicaid beneficiaries, but were willing to, and nearly did, kill to maintain their illegal business. My office will continue work with our partners at the FBI and NYPD to investigate and vigorously prosecute these and other alleged prescription drug traffickers for their illegal drug businesses and for any resulting violence.”
FBI Assistant Director-in-Charge Diego Rodriguez said: “Second-hand medications pose significant risks to consumers, and the business of trading prescription drugs for money often encourages people to resist the treatment they need. Engaging in the illegal distribution of prescription drugs is a slippery slope, especially when criminals pick up the prescription pad. The additional charges in this case, which were announced today, detail the violence that often coincides with backdoor drug deals. The FBI and our partners are eternally committed to exposing these markets and shutting them down once and for all.”
Police Commissioner William J. Bratton said: “Thanks to the continued efforts of our investigators, our federal law enforcement partners, and the prosecutors involved in this case, these individuals will now be held accountable for not only allegedly taking part in this illegal prescription drug ring but also for plotting a murder.”
According to the allegations contained in the Complaint unsealed in June 2014, the Indictment unsealed in September 2014, the Superseding Indictment returned yesterday in Manhattan federal court, and statements made in court:
Until June 2014, CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA operated Joaquin Grocery, a grocery store at 598 Morris Avenue in the Bronx, New York. In addition to selling grocery products, the Joaquin Grocery operated for years as a marketplace for Medicaid beneficiaries to sell their Medicaid-reimbursed prescription medication, including Oxycontin, Percocet, and expensive HIV medications. The drug transactions at the Joaquin Grocery typically took place in a small room behind a door at the back of the store, where Medicaid beneficiaries provided their pill bottles to the defendants for cash. With respect to non-controlled medication such as HIV medication, the defendants removed the patient labels from the medication bottles with lighter fluid, which contains toxic substances, so that the bottles appeared brand new and could eventually be re-sold to pharmacies. With respect to controlled medication such as Oxycontin, the defendants amassed large quantities of pills and re-sold them on the street.
In 2010, a competitor in the prescription drug trafficking business (the “Competitor”) began poaching customers on the same street as the Joaquin Grocery. Ultimately, CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA planned to have the Competitor killed, and hired individuals from New Jersey to travel to the Bronx to carry out the murder. On October 13, 2010, while standing in front of a store on the same block as the Joaquin Grocery, the Competitor was shot twice, including once in the head, by one of the individuals hired by the defendants. The Competitor was taken to a nearby hospital and ultimately survived.
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CARLOS PANIAGUA, OSVALDO PANIAGUA JR., and RAFAEL PANIAGUA are
each charged with one count of engaging in a conspiracy to distribute and possess with the intent to distribute a controlled substance (Count One); one count of engaging in a conspiracy to commit the unlawful misbranding, adulteration, and wholesale distribution of prescription drugs (Count Two); one count of engaging in a conspiracy to commit murder for hire (Count Three); and one count of aiding and abetting the use of a firearm in connection with the murder-for-hire conspiracy (Count Four). They each face a mandatory minimum sentence of 10 years in prison on Count Four and maximum sentences of 20 years in prison on Counts One and Three, five years in prison on Count Two, and 10 years in prison on Count Four.
LUNA and PICHARDO are each charged with one count of engaging in a conspiracy to distribute and possess with the intent to distribute a controlled substance. They each face a maximum sentence of 20 years in prison.
The previous charges against two other defendants, Osvaldo Paniagua Sr. and Joan Torres, remain unchanged.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Bharara praised the investigative work of the FBI and NYPD, and thanked the New York City Law Department for its assistance.
Mr. Bharara also thanked the FBI’s Health Care Fraud Task Force for their work in this investigation, which he noted is ongoing. The New York FBI Health Care Fraud Task Force was formed in 2007 in an effort to combat health care fraud in the greater New York City area. The task force comprises agents, officers, and investigators from the FBI, the NYPD, the New York State Insurance Fraud Bureau, the U.S. Department of Labor, the U.S. Office of Personnel Management Inspector General, the U.S. Food and Drug Administration, the New York State Attorney General’s Office, the New York State Office of Medicaid Inspector General, the New York State Health and Hospitals Inspector General, the New York City Human Resources Administration’s Bureau of Fraud Investigation, and the National Insurance Crime Bureau.
This case is being handled by the Office’s Violent and Organized Crime Unit. Assistant U.S. Attorney Russell Capone is in charge of the prosecution.
The charges contained in the Superseding Indictment, the Indictment, and the Complaint are merely accusations and the defendants are presumed innocent unless and until proven guilty.