CVS Gets Hit With a $77.6 Million Meth Charge

Filed under: whoa, someone really needs to look at their regulatory compliance procedures


CVS Pharmacy Inc. has agreed to pay $77.6 million in fines and returned profits in a case alleging improper control in the sale of an ingredient used to make methamphetamine, federal prosecutors said Thursday.

The U.S. Attorney's Office in Los Angeles said CVS, the largest operator of retail pharmacies, repeatedly failed to properly monitor sales of pseudophedrine, which is contained in some cold medicines and is also used to make meth.

Through failing to monitor these transactions, the pharmacy helped methamphetamine traffickers in Southern California and the area around Las Vegas to get their hands on "large amounts" of pseudophedrine, the prosecutors said in a statement - adding that the sales fueled a rise in methamphetamine production in California.

As part of the pharmacy's agreement with prosecutors, CVS will pay a $75 million fine, the largest civil penalty ever paid under the Controlled Substances Act, the prosecutors said. They also said CVS will forfeit $2.6 million in profits received from illegal transactions.

Looks like CVS is going to have to arrange an even bigger sale leaseback of its stores with hungry investors. Landes Investment Group - based in Dallas - recently acquired 36 CVS properties to go with the 313 purchased by Landes affiliate LLWG Capital last year. The new deal cost Landes $110 million, hardly enough to make up for CVS's lax controls over mildly controlled substances like cough medicine.

CVS is cooperating with authorities and not expected to face criminal charges. Amazing what a few fines can accomplish when it comes to doing the right thing.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


This is pitiful and if I invested in CVS, I'd want to take the $75 million fine out of somebody's ass.

They've been keeping the Sudafed behind the counter for years -- I know; I stopped bothering even though it used to work pretty well when I had a cold -- so it's really fucking slack that CVS couldn't manage to keep track of whoever was buying it in bulk.

Of course, if I still took the stuff, I imagine I wouldn't feel quite so lazy.