A Zionsville pharmacist has been fined $50,000 after pleading guilty to federal charges of wire fraud for falsely obtaining prescription drugs from international companies.
Hongxing “Harry” Zhang, 47, was sentenced last week to two years of probation for one count of wire fraud and one count of filing misleading export information. The sentences are to run concurrently.
His state pharmacist license had been summarily suspended while the State Board of Pharmacy awaited his sentencing in U.S. Court for the Southern District of Indiana.
According to court documents, Zhang lives in Zionsville where he had operated H3 Direct LLC, a global direct pharmacy service, since 2009.
He reportedly made $2.6 million from a scheme in which he offered “original research prescription drugs” from the United States at prices reduced by as much as 30 percent compared to similar drugs, according to federal court documents.
He obtained prescription drugs from companies in Germany, Switzerland and Canada by representing that the drugs were for individual patients with legitimate medical needs. However, the scheme also involved falsely representing people as patients.
An area physician had agreed to write prescriptions for individuals who were not her patients after relying on information from Zhang.
Not all of the drugs were falsely obtained; some went to pharmaceutical companies in China or imported into the U.S. and then to China before being sold through H3.
Zhang had also been a pharmacist for CVS beginning in 2013, but that relationship ended by mid-2015, according to records.
Initially, Zhang was indicted in December 2016 in federal court for wire fraud. On April 10, his license was summarily suspended by the pharmacy board for 90 days.
On April 19, 2017, a new indictment was filed in U.S. District Court for Southern Indiana charging Zhang with six counts of wire fraud; three counts of identity theft; seven counts of money laundering; three counts of failure to file or submitting false export information; and two counts of fraud and making false statements.
In early October, he entered a guilty plea to one count of wire fraud and faces a maximum of 20 years in prison and up to a $250,000 fine. He also entered a guilty plea to one count of failure to file export information with a penalty of up to five years in prison and a $10,000 fine.