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Lexington Doctor Found Guilty of Engaging in International Money Laundering Scheme, Importing Illegal Merchandise and Receipt and Delivery of a Misbranded Drug

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Department of Justice
U.S. Attorney's Office
District of Massachusetts
 
FOR IMMEDIATE RELEASE
February 9, 2024 

Defendant falsified documents to obtain drugs from Hong Kong that are not FDA-approved

BOSTON – A Lexington, Mass. doctor was convicted today following a 14-day jury trial in connection with an international money laundering scheme involving importing illegal, misbranded drugs.

Rahim Shafa, 66, was convicted of international money laundering, illegally importing merchandise contrary to law and receiving and delivering misbranded drugs. U.S. District Court Judge Margaret R. Guzman scheduled sentencing for May 15, 2024. The defendant was indicted by a federal grand jury in August 2020 and subsequently charged in a superseding indictment in June 2021.

“For roughly a decade, this defendant manipulated and exploited our healthcare system. He circumvented the FDA approval process for drugs from overseas – systems established to protect and support public health and safety,” said Acting United States Attorney Joshua S. Levy. “This conduct jeopardized patient safety and undermined the very foundation of our regulatory system. Such conduct will never be tolerated.”

“U.S. consumers rely on the FDA to ensure that the medications they take are safe and effective. Unlawful, misbranded medical drugs put consumers’ health at risk,” said Special Agent in Charge Fernando McMillian, FDA Office of Criminal Investigations’ New York Field Office. “We will continue to pursue and bring to justice those who place profits above consumers’ health.”

“This defendant orchestrated a scheme that jeopardized the health of vulnerable patients seeking help with their addiction,” said Special Agent in Charge Roberto Coviello of the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). “As this conviction demonstrates, HHS-OIG and our law enforcement partners will continue working together to protect both public safety and our health care system.”

Shafa was a psychiatrist who owned and operated Novel Psychopharmacology. From approximately January 2008 through January 2018, Shafa engaged in an international money laundering scheme to purchase naltrexone pellet implants as well as disulfiram pellet implants and injections from Hong Kong. Naltrexone and disulfiram are approved by the U.S. Food and Drug Administration (FDA) in certain forms for the treatment of alcohol dependence and alcohol and opioid dependence, respectively. However, the implantable pellet form of the drug that Shafa purchased are not approved by the FDA. Shafa falsified shipping documents to conceal that the packages containing the drugs were shipped from Hong Kong to Shafa in Massachusetts. For example, packages containing naltrexone pellet implants were falsely declared as ‘plastic beads in plastic tubes’ in shipping documents. Shafa sold these drugs to patients of Novel and implanted them into patients bodies, without fully understanding the risks of the drugs. Patients testified at trial regarding infections and complications they experienced from the pellet implantation procedure.

The charge of money laundering provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of importing merchandise contrary to law provides for a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of receiving and delivering a misbranded drug with provides for a sentence of up to one year in prison, one year of supervised release and a fine of $1,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and statutes which govern the determination of a sentence in a criminal case.

Acting U.S. Attorney Levy, FDA SAC McMillan and HHS-OIG SAC Coviello made the announcement today. Valuable assistance was provided by the Massachusetts State Police, the Milford Police Department and the Lexington Police Department. Assistant U.S. Attorneys John T. Mulcahy, Howard Locker and Kaitlin J. Brown of the Criminal Division are prosecuting the case.

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