SAN FRANCISCO — Aside from their low price, the weight-loss pills that a Texas emergency room doctor ordered online looked like the real thing until he took them and nearly died.
The blue capsules were supposed to be an over-the-counter drug but were loaded with sibutramine, a prescription drug the Food and Drug Administration had warned was linked to heart attacks and strokes and subsequently pulled off the market.
FDA investigators say a Chinese national named Shengyang Zhou sold them through a middleman in the United States, where small-time retailers resold them on eBay. At least five other people were injured by the pills, according to court documents.
Fake pills like those are part of a large, and growing, global trade in counterfeit products that are bought and sold online — some of them hazardous or even deadly. The anonymity of the Internet — including what's known as the "Dark Web," where the purveyors conceal their identities using encrypted communications — makes it a prime market for these goods, which endanger consumers, undercut brand names and befuddle law enforcement.
A USA TODAY examination found a wide variety of knockoffs including exploding air bags that spew flames and chain saws whose handles can fall off, exposing the owners to rotating blades. Or seat belts that easily unfasten and flammable lithium batteries that act, unintentionally, as "pyrotechnic devices."
"I thought (the counterfeit market) was all about fake Louis Vuitton purses," says Andy Shuttleworth, intellectual property unit chief for the National IPR Center. "But, wow, I quickly learned the dangers of this stuff."
A worldwide raid of 700 counterfeit websites by U.S., European and Hong Kong government authorities created a splash last December. But it has hardly made a ripple in what has turned into one of the most lucrative criminal enterprises on Earth. The virtual emporiums gird an underground economy that robs U.S. businesses of $250 billion a year in potential revenue and 750,000 jobs, the FBI estimates.
The fake blue pills, sold as the weight-loss drug Alli, were "amazingly good counterfeiting," said the former ER doctor, who asked that his name not be used in order to protect his privacy.
In 2009, he bought some at "an incredibly inexpensive price," took a few and wound up in the hospital after having several small strokes. "I was within a few minutes of seizing and dying," he says. "If it hadn't been for the ER doctor, I would have died."
It took federal agents almost a year to find and stop Zhou, 31, who is now in federal prison serving a seven-year term for trafficking in counterfeit drugs.
The criminals behind such fake goods come from all over the world. There are counterfeit violin and guitar strings made in Asia, so well known in music circles that companies like D'Addario Strings in Farmingdale, N.Y., post detailed instructions on how to tell real strings from knockoffs.
In January, the FDA charged two Turkish nationals with shipping fake cancer drugs to the United States, some of which authorities say were only vials of water and mold. In New York City, the FBI arrested three men for selling counterfeit brake pads from China as coming from Ford and General Motors. Some were then sold to stores in Saudi Arabia.
A Frenchman, Didier De Nier, sold more than $2.6 million worth of counterfeit batteries to the Navy for nuclear aircraft carriers and submarines, going so far as to use chemicals to remove the "Made in China" markings from the fake batteries, the U.S. Attorney's Office for the Central District of California said in a release. De Nier was arrested last year on his yacht in the U.S. Virgin Islands and convicted of defrauding the U.S. government on April 16 of this year.
About half of the drugs sold on illegal websites that conceal their geographic locations are counterfeit, according to the World Health Organization. Up to 10% of the global pharmaceutical market is bogus, with percentages significantly higher in certain African, Asian and Latin American countries where there is less regulation, health care giant Sanofi estimates. Drugmaker Pfizer says its pills are faked in at least 107 countries.
U.S. authorities first got wind of the counterfeiting operation that sickened the former ER doctor on March 31, 2009, when Customs and Border Protection intercepted a package from China at a San Francisco airmail facility.
The large, brown, cardboard box was wrapped in yellow plastic tape with two white binding straps. It contained 204 green boxes labeled in Chinese. Inside were 6,000 capsules marked as "Super Slim" and another 120 labeled "Meizitang."
The FDA had previously found that products with those names contained sibutramine, a controlled substance that at the time could legally be sold only with a prescription. Sibutramine was removed from the market after clinical trial data showed a 16% increase in the risk of heart attack, stroke or death in patients who took it.
The first breakthrough in the case came on April 3, 2009, when Special Agent Trevor Helderop at the Department of Homeland Security's Office of Immigration and Customs Enforcement in Denver was given the package and launched a long hunt to determine who was sending counterfeit drugs to the United States.
Federal agents put a mobile tracking device on the box from China and put it back into the mail stream. That led them to Broomfield, Colo., where an individual identified only as J.K. in court documents took delivery of the package. J.K. agreed to cooperate, telling them he bought diet pills from a Chinese distributor he knew only as "Tom" and sold them online at the site Best2DayDiets.com.
Helderop took over the e-mail accounts J.K. was using and began trading e-mails with "Tom" at a Chinese Yahoo address.
Buying was simple. "Tom" offered Helderop 500 boxes of pills for $3,000 and said "he could ship without any problems across the United States borders and would resend the order if there were problems with customs," Helderop said in court documents. "Tom" told the agents to say the payment was for "clothes or something else" in the payment forms.
On Aug. 31, 2009, "Tom" told them they could send a Western Union payment to a Mr. Shengyang Zhou in Kunming, China, to buy 500 boxes of diet pills.
Using Homeland Security databases, Helderop found that Zhou had come to the United States using a tourist visa on July 6, 2009. From Zhou's visa application, Helderop was able to find his age, birthplace and employer.
One of "Tom's" customers, Khalil Sarwar, bought what he thought were 100 bottles of Alli from a site called 2daydietshopping.com and then resold it on eBay, court documents show. When the FBI contacted Sarwar, he told them he'd deposited his payment into a Bank of America account in the name of Shengyang Zhou.
On Feb. 21, 2010, Russell Hermann, an agent with the FDA's Office of Criminal Investigations, flew to Bangkok to meet with Zhou, posing as a potential client. Zhou boasted that he had been in the counterfeit drug business for five years, putting his master's in business administration to good use. He was "already a millionaire," he told the agent, and owned an Audi Q7 "worth about $250,000."
Zhou also told Hermann that he'd bought an authentic box of Alli at a Walmart in Texas for $62 and was using it as a template so he could make better fakes. He said he had a three-story factory in Kunming, where he paid 20 employees about $300 a month and could produce up to 3,000 boxes of fake Alli a day.
Meanwhile, people who took the pills were beginning to fall ill. In Los Angeles, Masis Mirzakhani bought two bottles of pills on eBay for $10 less than he usually paid and within a few days had "heart palpitations, numbness within his left arm, severe eye pressure/headache, profuse sweating and chills," he told an FDA agent.
The former ER doctor was fooled by the pills as well. But it was an easy mistake to make. When Agent Helderop sent samples of the so-called Alli capsules to GlaxoSmithKline, the company said the packaging, labeling and markings "were substantially indistinguishable from the registered trademarks" for the real thing.
But when the pills were tested, instead of the fat-uptake inhibitor orlistate, they contained 9.29 milligrams of sibutramine. On Jan. 18, the FDA sent out a warning notice saying "a counterfeit and potentially harmful version of Alli" had been discovered.
HIDING IN PLAIN SIGHT
Legal authorities and counterfeit experts say many counterfeit goods are traded on popular consumer sites like Alibaba, eBay and Amazon.com, which are finding it increasingly difficult and expensive to differentiate between legit and bogus sellers.
In June, Alibaba, social-media giant Tencent Holdings, search provider Baidu and 18 other Internet firms in China, vowed to cooperate to fight counterfeiting and fake advertisement scams, under the auspices of China's Ministry of Public Security.
"Alibaba Group is highly committed to the protection of intellectual property rights and the fight against counterfeiting," company spokeswoman Ashley Zandy said. EBay says it has beefed up security to stop fraudulent sites. Amazon had no comment.
Law enforcement has been scrambling to fight the problem as well. About 250 of the 7,000 agents at ICE are trained and classified as computer agents, many of whom investigate counterfeit pharmaceuticals.
For consumers, the real issue is that there is "no easy way to validate the authenticity of goods," says Phil Montgomery, chief marketing officer of Identiv, a global-security company. "And people are losing trust in what they are buying."