Prosecutors allege former Rochester Drug Cooperative CEO ignored mounting toll of opioids

In a historic criminal case, former Rochester Drug Cooperative Chief Executive Office Laurence Doud III is scheduled for trial this week on allegations that he and his company were significant players in a deadly opioid pipeline.

A wholesale distributor, Rochester Drug Cooperative, or RDC, was in the middle of the opioid pipeline, shipping drugs to pharmacies. Evidence shows that RDC moved tens of millions of dangerous opioids — fentanyl and oxycodone pills among them — while ignoring mounting proof of the company's role in fueling the nation's opioid crisis.

Doud personally brushed aside clear signs that some pharmacies were flooding the streets with opioids, and he pushed for continued business with pharmacies under scrutiny by the Drug Enforcement Administration, prosecutors allege.

Former Rochester Drug Co-Operative CEO Laurence Doud III stands outside U.S. District Court in Manhattan on Tuesday, April 23, 2019. Prosecutors allege Doud ignored red flags to turn his drug distributor into a supplier of last resort as the opioid crisis raged.
Former Rochester Drug Co-Operative CEO Laurence Doud III stands outside U.S. District Court in Manhattan on Tuesday, April 23, 2019. Prosecutors allege Doud ignored red flags to turn his drug distributor into a supplier of last resort as the opioid crisis raged.

As RDC grew into one of the nation's largest wholesale distributors of controlled substances, Doud personally benefited with contracts tied to that very explosive expansion, records show.

In April 2019, federal prosecutors brought felony charges against the company, Doud, and another executive — the first time a distributor was accused of crimes in connection with the epidemic. The company, which has since gone into bankruptcy, reached an agreement with prosecutors, while the other RDC official, former compliance officer William Pietruszewski, pleaded guilty to conspiring to distribute controlled substances.

Pietruszewski is expected to testify against Doud.

Doud's trial is scheduled to start Tuesday, Jan. 18, in a Manhattan federal court, and is expected to last up to three weeks. A jury was selected Wednesday.

Attorneys for Doud declined to comment before the trial. They have maintained that Doud has been the scapegoat for the failure of others at RDC who did not intervene when opioid sales suspiciously soared.

"Mr. Doud is being framed," one attorney, Robert Gottlieb, said earlier. "In this case, the government just got it wrong."

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Doud was fired from the company in 2017 as the DEA intensified an investigation into RDC's opioid shipments. He sued RDC, and company officials responded with similar charges against Doud as prosecutors now do.

RDC officials alleged in court papers that "Doud urged RDC compliance staff and others to disregard RDC’s policies and procedures concerning the sale of controlled substances."

Michael Paulsen, who owned a Staten Island pharmacy and has admitted to illegal distribution of oxycodone, is expected to be one witness against Doud, court records show.

Paulsen was not a registered pharmacist, but used his job to distribute tens of thousands of oxycodone pills, authorities said. RDC was a significant distributor to the operation, Regal Remedies.

Paulsen will testify "that he was running a pill mill," federal prosecutors said at a pretrial hearing. Prosecutors want to show the jury a photo of a sleeping pharmacist at Regal; they allege that Paulsen hired the pharmacist, but the individual did little work and often slept on the job.

Family lawsuit against RDC continues

RDC has faced multiple lawsuits since the criminal charges, and successfully sought bankruptcy protection to sell off its properties and help with its debts. However, Rochester-based Bankruptcy Judge Paul Warren allowed one lawsuit to continue, outside the confines of bankruptcy protection. That lawsuit is from the family of Sarah Fuller, a New Jersey woman who died of an opioid overdose.

Sarah Fuller
Sarah Fuller

Fuller died in 2016 from an overdose of Subsys, a prescription fentanyl spray that was originally intended for pain-ridden cancer sufferers and is considered 100 times more powerful than morphine. She had suffered injuries after two car accidents and was seeking pain relief.

Subsys manufacturers bribed medical practitioners to distribute the opioid when medically unnecessary, and Fuller's family contends that RDC was a distributor to the pharmacy that provided Fuller with the fatal doses. Lawyers for the family think the Doud trial will reveal that RDC did not question suspicious demands for Subsys from the pharmacy.

RDC lawyers are seeking to dismiss the lawsuit, saying the Fuller attorneys have not drawn distinctive links between RDC and the deadly Subsys.

RDC "could have stopped it," Richard Hollawell, a New Jersey attorney for the Fuller family, said of Fuller's death. "They knew that these orders were not legitimate orders for legitimate medical purposes.

"They're a very important actor in what happened to Sarah Fuller. They could have reported the pharmacy to the DEA ... and the whole scheme could have been over prior to Sarah getting the Subsys."

Contact Gary Craig at Follow him on Twitter at gcraig1.

This article originally appeared on Rochester Democrat and Chronicle: Trial of former Rochester Drug Cooperative CEO Laurence Doud III to start Tuesday