$850K Fine and 10 Years in Prison for Perryville Pharmacist

PERRYVILLE, Ark. (News release)-  Christopher Grant Watson, 44, of Perryville, a
former pharmacist and owner of Perry County Food and Drug Store, will be spending the
next 10 years in federal prison.

United States District Court Judge James M. Moody sentenced Watson to a
statutory maximum 120 months’ imprisonment for Watson’s lead role in a conspiracy to
unlawfully distribute prescription opioid pills from his drug store, his participation in a
scheme to defraud Medicare/Medicaid, and a structuring offense. Watson was also
ordered to pay a monetary judgement in the amount of $850,000 representing unlawful
proceeds from the offense, which includes $54,000 in restitution to Medicare/Medicaid.

On October 5, 2016, Watson pleaded guilty to conspiracy to dispense
hydrocodone without an effective prescription, healthcare fraud (resulting from falsely
billing Medicare Part D for patients’ claims), and structuring bank account cash deposits
to avoid bank reporting requirements. Judge Moody sentenced Watson to the statutory
maximum on all three charges—60 months on the drug conspiracy and structuring
charges, and 120 months on the healthcare fraud—and ordered the sentences to run

“Christopher Watson was a trusted local pharmacist upon whom his community
depended,” Harris said. “Instead, he helped spread poison and addiction in his
community. His criminal actions contributed to one of the largest health epidemics
Arkansas is facing. This office is committed to rooting out all bad actors in the health-care industry, and we will continue to aggressively pursue investigations into crimes such
as Watson’s.”

In July 2014, as part of the national effort, the DEA New Orleans Field Division
launched an aggressive campaign that targeted the largest sources of illegally diverted
pharmaceuticals in Arkansas, Louisiana, Mississippi, and Alabama. This effort, dubbed
Operation Pilluted, involved the extensive investigation of rogue practitioners,
pharmacists, and other DEA Registrants, as well as the aggressive pursuit of more
traditional criminal organizations involved in the distribution of pharmaceuticals. Under
the auspices of Operation Pilluted, concerted efforts were initiated to heighten
community awareness concerning the perils of prescription drug diversion and the
strategic implementation/strengthening of associated diverted pharmaceutical laws.

On May 6, 2015, a Grand Jury returned a superseding federal indictment against
Watson and 27 others following a year-long investigation initiated by the DEA and the
Arkansas State Police (ASP). Watson and his father, Tommy Watson, owned and
operated the Perry County Food and Drug store, and Christopher Watson was the
managing pharmacist at that location. Christopher Watson sold tens of thousands of
Schedule II, III, and IV pills and other pharmaceuticals from the pharmacy shelves after
hours and forged prescriptions to account for the missing pills, and filled fraudulent
prescriptions presented by pharmacy customers.

A pharmacy audit showed more than 49,000 oxycodone pills missing and more than 72,000 hydrocodone pills missing.

Tommy Watson, 68, pleaded guilty to misprision of a felony (concealing
knowledge of a felony from authorities) on February 1, 2017, and on August 30, 2017, he
was sentenced to two years’ probation and a $50,000 fine.

“The abuse of prescription drugs remains a significant problem in communities
across the nation, including here in the Eastern District of Arkansas,” said Azzam,
Special Agent in Charge of the DEA New Orleans Field Division, which includes the
Little Rock District Office. “For the health and safety of our citizens, the DEA will
continue to target the illegal diversion of these pharmaceuticals, which can destroy lives.

It is particularly appalling when the perpetrator of such illegal acts is a health care
professional, like this pharmacist, responsible for ensuring that potentially dangerous
drugs are dispensed properly. We hope that the sentence Christopher Watson received in
this case serves as a reminder to anyone who might illegally divert pharmaceuticals that
they will be held accountable for the harm they cause.”

The operation resulted in the issuance of an Immediate Suspension Order to the
Perry County Food and Drug store by the Administrator of DEA on the grounds that the
pharmacy constituted an imminent danger to public health and safety. The employees of
the pharmacy were prohibited from possessing and/or dispensing controlled substances
pending a federal administrative hearing. Following the hearing, the pharmacy’s DEA
Registration was permanently revoked on January 26, 2015.

“Watson used his position as a pharmacist, a position of trust, to illegally
distribute drugs to members in his community,” Upchurch said. “It’s this kind of illegal
activity that allows the opioid epidemic to metastasize throughout our country. I am
proud of and appreciate the work conducted by the FBI, U.S. Attorney’s Office for the
Eastern District, DEA—Little Rock Tactical Division Squad, Conway Police
Department, IRS, Arkansas State Police, and our other law enforcement partners as they
continue to investigate and bring to justice individuals conducting this type of illegal

The $850,000 judgment represents proceeds Watson received from his illegal sales
of hydrocodone and other pharmaceuticals, at the price of $2 per hydrocodone pill and
$15 per oxycodone pill. Additionally, Watson received $54,000 from Medicare after
billing Medicare patient accounts for high dollar pharmaceuticals which the patients
never received.

“The role of IRS-CI in narcotics investigations is to follow the money and unravel
complex financial transactions,” said Tracey D. Montaño, Special Agent in Charge, IRS
Criminal Investigation. “Mr. Watson executed a scheme to defraud the Medicare system
for his own personal financial gain, and while doing so illegally distributed narcotics into
the community, contributing to a growing and concerning epidemic. IRS Criminal
Investigation is proud to provide its financial expertise as we work alongside our law
enforcement partners to bring criminals to justice.”

Of the 28 original defendants, 23 have pleaded guilty. Charges were dismissed on
five defendants.


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