By Shereen Siewert
A Wausau health insurance broker who ran a scheme to import and distribute misbranded drugs from India will spend six months in prison after pleading guilty to mail fraud and money laundering, federal officials said Friday.
Kenneth Zipperer, 54, was also ordered to pay a $150,000 fine and $483 in restitution costs.
In January 2019, at least five agents were seen carrying boxes out of Zipperer Financial, 115 Forest St., Wausau, and placing those boxes in vehicles. The agents wore jackets identifying them as IRS CID officials.
Zipperer Financial offered supplemental Medicare plans, advantage plans and Part D pharmaceutical plans.
Investigators declined to comment on the investigation for more than 18 months. But in November 2020, federal officials announced that Zipperer had been indicted on 26 federal charges stemming from a scheme involving an unlicensed pharmacy. Zipper initially faced five counts of mail fraud, ten counts of wire fraud, two counts of distributing misbranded prescription drugs without a written prescription or license to administer such drugs, five counts of concealment money laundering, and four counts of promotional money laundering.
According to the indictment, Zipperer imported foreign-sourced prescription drugs from an internet pharmacy company in India via the U.S. Mail and Express Mail Service, and none of the drugs were approved by the U.S. Food & Drug Administration for human consumption in the U.S. Prosecutors say Zipperer was not licensed to dispense or prescribe prescription drugs, and that he used his company staff, computers, and office space to order prescription drugs from India, break down bulk shipments into quantities for individual clients, store the drug inventory, issue invoices for payment, and deposit drug customer checks into the company’s business bank account, officials said.
Zipperer requested his prescription drug customers to pay him in cash to avoid creating a paper trail of the financial transactions associated with his underground pharmacy’s operations and that he conducted financial transactions knowing they represented the proceeds of unlawful activity, prosecutors said. He typically distributed the drugs to insurance clients in person, primarily at his downtown Wausau office.
On Friday, Zipperer was convicted of one count of mail fraud and one count of money laundering, said Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin. U.S. District Judge William M. Conley presided over the case.
O’Shea said distributing unapproved prescription drugs is not only illegal but puts consumers’ health at risk.
“In order to protect public health and safety, our office works closely with our law enforcement partners to identify and prosecute those who seek to profit from selling unapproved prescription drugs,” O’Shea said.
Federal officials caution against taking foreign, unapproved prescription drugs that can put patients at serious risk of harm. Unapproved drugs have no guarantees of safety or efficacy and can harm those who use them, said Special Agent in Charge Lynda M. Burdelik, FDA Office of Criminal Investigations Chicago Field Office.
“We will continue to investigate and bring to justice those who put public health at risk,” Burdelik said.
The charges against Zipperer were the result of an investigation conducted by the U.S. Postal Inspection Service, U.S. Food & Drug Administration – Office of Criminal Investigations, IRS Criminal Investigation, and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations. Assistant U.S. Attorney Daniel Graber handled the prosecution.