Is Dave Palumbo a scammer?
He is 5th to plead guilty in the county
By Onell R. Soto
UNION-TRIBUNE STAFF WRITER
October 11, 2004
The check bounced.
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So a representative of a Spring Valley printer that produced packaging for a human growth hormone contacted the manufacturer and demanded payment.
The Swiss pharmaceutical company responded that it hadn't ordered packaging from the printer for its drug, Serostim.
And so began the unraveling of a counterfeit growth hormone ring that resulted in the conviction last week of the editor of a muscle magazine, a New York man who says he is a former medical student.
Four San Diego County men also have pleaded guilty in the case. Three of them have been sentenced to prison or probation.
Serostim contains a form of the human growth hormone somatropin.
It is an important drug. Serostim was the first growth hormone approved by the Food and Drug Administration for AIDS patients who are dangerously underweight, a condition known as AIDS wasting.
The drug retails for about $1,675 per seven-vial box, and patients take a vial daily, according to a local pharmacist.
Because of the muscle growth it stimulates, it's prized by body builders who seek a drug-induced advantage. But unless they get a prescription, they have to turn to the black market.
When the drug's maker, Serono, heard from the Spring Valley printer, it turned to the FDA.
An investigation turned up a National City father and son Ronald Nollet Sr. and Jr., who began manufacturing counterfeit Serostim in April 2002, according to court documents.
The father, posing as a Serono representative, had ordered the labels and boxes for the packaging. But his check bounced, prosecutors said.
At his house, agents found counterfeit labels and boxes. At his son's house they found vials of the phony drug and a machine to seal the drug in the vials, according to court papers.
The Nollets paid an Oregon company to make the fake medicine out of sugar, phosphoric acid and water. The vials did not contain the hormone, prosecutors said.
What's more, the process wasn't sterile. FDA scientists examining the contents found mold. The solution was highly acidic.
"The FDA is very concerned about this stuff," prosecutor Melanie Pierson said. "If it got into the hands of the intended users, which are AIDS patients, they could be seriously and perhaps fatally harmed."
She said she knew of no AIDS patient who took the concoction.
The Nollets told investigators they put together the business with Brian Mohr of San Diego, who provided the funds and told them what to do, according to court documents.
The Nollets agreed to provide the fake drug. Mohr agreed to sell it, splitting the profits with them, according to the documents.
When FBI and FDA agents raided Mohr's San Diego house in August 2002 they found $34,400 in cash, boxes of counterfeit Serostim and anabolic steroids.
Mohr told them he came up with the formula for the drug from the list of ingredients in a box of real Serostim.
He got 447 boxes of the sham Serostim from the Nollets in June. More than half of them went to Bill Young of San Diego for about $330 a box, according to the documents.
Mohr later talked with Young as agents eavesdropped. He told Young to try to get back the fake Serostim he'd distributed. As Young drove away from the meeting, he called people in Florida, New York, Los Angeles and San Diego County, according to phone records reviewed by investigators.
Young was later arrested and told investigators he shipped most of the phony Serostim he got to Dave "Jumbo" Palumbo, a bodybuilder in Long Island, prosecutors said.
In his magazine, RxMuscle, Palumbo advocates the use of muscle-growing drugs.
The magazine promises articles based on "research data, practical knowledge, and 'in the trenches' experience."
On his own Web site, Palumbo says he studied medicine for three years, has developed a training program and has grown from 168 pounds to his current 258 pounds as a result of training and a protein-rich diet.
"Overnight, I went from the crazy 'lunatic,' mad scientist, to the 'man' with all the secrets," he says on the site. "Nobody realized that the big secret was nothing more than CONSISTENCY and relentless PERSISTENCE."
In pleading guilty in San Diego federal court, Palumbo said he injected some of the fake drug he got from Young. When Young first told him there might be a problem, Palumbo said he took some and felt fine, according to court records.
About half of the 200 boxes Young shipped to him were lost in transit, a prosecutor said.
Palumbo pleaded guilty to selling 90 boxes of the fake hormone to bodybuilders who didn't have a prescription for about $63,000, or about $700 each.
He faces 10 to 18 months in jail at a sentencing scheduled for Dec. 17, according to his plea agreement.
Young, 35, pleaded guilty last year to trafficking in counterfeit goods and is scheduled to be sentenced Oct. 25.
Mohr, 31, pleaded guilty to mail fraud in 2002 and was sentenced to three months in prison.
Ronald Nollet Sr., 55, pleaded guilty to manufacturing and distributing counterfeit drugs and was sentenced to three years' probation, as was his 33-year-old son.
JohnnyB
