A major black market operation that diverted and illegally sold essential prescription medications potentially put innocent patients at risk and defrauded the U.S. government of millions of dollars, according to federal charges revealed on Wednesday.

The illegal operation was allegedly orchestrated, facilitated, and supported by numerous pharmacy owners and employees in Puerto Rico, as well as a medical facility procurement employee who "misused his position" to steal legitimate medications from the warehouse before they reached the market and resell them at a "significant discount" to individual pharmacy owners, according to an indictment .

The 27 people indicted in the scheme include a onetime Olympic basketball player, officials at the U.S. Department of Health's Office of Inspector General told
. Of those indicted, one has already pleaded guilty, officials said.

Eddin Orlando Santiago-Cordero, aka "Guayacan," allegedly served as one of the dozens of unlicensed wholesale distributors, according to an indictment. Decades before facing charges in the scheme, he was on Puerto Rico's Olympic roster, a spokesperson for the HHS-OIG told
.

Early Wednesday, federal authorities apprehended some of the individuals allegedly involved in the operation across the island of Puerto Rico and in Florida as well, the HHS-OIG spokesperson stated.

Over 100 different medications – many of critical importance to the individuals who rely on them – were part of the drug diversion scheme, the charging documents said. These medications include multiple HIV+ treatments, insulin, thyroid medication, antipsychotic / schizophrenia medication, alcohol and opioid addiction medication, blood thinners, asthma and COPD medication, IV antibiotics to treat serious infections like meningitis or sepsis, hormone replacement therapy estrogen, malaria medication, popular obesity / diabetes drugs including Ozempic and Mounjaro, as well as medication used for erectile dysfunction and enlarged prostate.

These medications were seized before they reached stores, often packaged in resealable plastic bags without labels – and crucially, without the necessary conditions to maintain the safety and efficacy of certain medications, according to the charging documents. One example cited in the court papers is insulin, which needs to be refrigerated.

"Once these medications are diverted, it becomes challenging, if not impossible, for regulatory bodies such as the FDA, law enforcement, or end-users to confirm whether the prescription drug package actually contains the correct drug or dosage," court documents stated. "Law enforcement officers, regulators, and end users would have no way of knowing if the prescription drug has been tampered with, stored improperly, or had its potency compromised."

The alleged scheme involved nearly $21 million in fraudulent funds – almost $14 million of which came from illegal sales of misbranded and diverted prescriptions and over $7.6 million from false Medicare and Medicaid claims – according to court documents.

The alleged operation is part of an "alarming" and a "growing" trend, HHS-OIG's special agent in charge of the New York Regional Office Naomi Gruchacz told
in an exclusive interview ahead of the takedown she helped lead.

"The motivation behind these schemes is often driven by greed," Gruchacz said. "They are seeking financial gain. The greed takes over, and even though the community is put at risk, it's overlooked – even though they are often operating in the same community that these healthcare providers should be serving."

Because these syndicates operate outside of official channels' regulations, it's nearly impossible to track if the drugs are diluted or even what they are supposed to be – it's also difficult to trace where exactly the diverted prescriptions end up, and into whose hands, an HHS-OIG spokesperson said.

The conspirators in this operation "sold prescription drugs in resealable clear plastic bags without any labels or proper instructions," paid each other in cash, and sent shipments of diverted drugs through the United States Postal Service "as well as private and commercial carriers using fake names and addresses," according to the charging documents.

"In previous investigations, we've observed that sometimes these medications are sold on legitimate, wholesale distribution websites," Gruchacz said.

Syndicates like this one have sometimes collected drugs from patients who ration and sell their own prescriptions in exchange for a cut of the profits, she said.

"We're talking about patient harm, both on the front end – the patient who should be taking the medication, and on the back end if a patient unknowingly receives a diverted medication," Gruchacz said. "We don't know how it's being stored. We don't know if it's expired."

Legal representation for Santiago-Cordero and the other accused individuals was not immediately accessible.