Website owner defies judge’s orders

07/06/2005

Warren Wolfe,
Star Tribune
July 6, 2005

Four days after a federal judge shut down a lucrative Internet pharmacy in Burnsville in May and ordered owner Christopher William Smith to refrain from selling drugs, Smith boarded a plane to the Dominican Republic and opened a new online pharmacy, authorities said Tuesday.

To do so, an FBI affidavit says, Smith traveled abroad under a false passport, used a cash card to obtain money from a bank account after it had been seized by the court, and had his wife, his girlfriend and others bring him thousands of dollars in cash.

Smith, 25, will appear today before Judge Michael J. Davis, who closed the Burnsville Internet and call-center business, Xpress Pharmacy Direct.

Smith was arrested shortly after midnight Thursday at Minneapolis-St. Paul International Airport and taken to the Sherburne County jail after he stepped off a flight from the Dominican Republic.

Christopher SmithIn ordering Smith’s arrest, Davis found probable cause that Smith violated the court order and that he had fled the country to avoid court jurisdiction.

Though not charged with a crime earlier, Smith now should be held in criminal contempt and jailed for six months, the U.S. attorney’s office recommended Tuesday.

Smith’s attorney could not be reached for comment.

In addition, after his Burnsville business was shut down, Smith obtained a list of more than 100,000 of his Xpress Pharmacy Direct customers and began soliciting business from them through the new Internet pharmacy, the FBI said.

Davis also ordered two of Smith’s associates to appear in court today.

They are Smith’s accountant and Xpress Pharmacy chief financial officer, Bruce Lieberman of New York, and Creaghan Harry of Florida, who the FBI says helped Smith set up the online pharmacy in the Dominican Republic.

Assets seized

Federal authorities began investigating Smith’s online drug business for alleged money laundering, mail fraud and wire fraud after complaints from customers and former employees.

Smith, a high school dropout, was an internationally known e-mail spammer when he started the drug business, first with at least a dozen Internet sites and last year adding a call center with about 85 employees, authorities said.

Federal authorities raided Xpress Pharmacy and Smith’s home on May 10 and seized his passport and more than $4 million in assets, including a $1.1 million house in Prior Lake owned by Smith and his wife, Anita, and luxury vehicles valued at $1.8 million.

FBI and other investigators said the firm earned more than $18 million in the past year.

Authorities concluded that Smith had been selling medicines to customers without proper prescriptions and selling drugs without a license.

‘Large sums of cash’

Smith appeared in federal court May 20, but on May 24 left for the Dominican Republic, according to a memorandum filed Tuesday by the U.S. attorney’s office.

Since then, the FBI affidavit said, Smith has “avoided contact with many friends, family and associates” and frequently changed cell phones “to keep his whereabouts and his plans secret.”

The court documents said that by June 21, he had used aliases to set up two new Internet sites and was selling medications without prescriptions online and through a new phone center set up in the Dominican Republic, and that he expected “$4 million in sales immediately.”

At a casino in the Dominican Republic, Smith used a cash card to make two $1,000 withdrawals from a bank account seized by federal authorities, the FBI said.

He also “arranged to have large sums of cash brought to him” there by his wife, his Minnesota girlfriend and several others, the court documents said.

And last month, the FBI said, federal authorities intercepted about $53,000 that former Smith employees sent by Federal Express to two associates of Smith.