Pensacola businessman alleged to be 'leader' in HIV drug counterfeit ring, lawsuit says

A Pensacola businessman was named as a defendant in a sprawling lawsuit seeking to halt an alleged expansive criminal HIV drug counterfeiting network.

Last month, Gilead Sciences named John Levitan, along with more than 50 other defendants, in a lawsuit that alleges Levitan was a "leader" in a network that sold more than $230 million in counterfeit HIV drugs.

Levitan is a partner in Streamline Boats of Northwest Florida, which holds a lease with the Port of Pensacola to rehabilitate two port warehouses and set up a boat manufacturing company at the port.

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The lawsuit was filed in July, but many of the defendants remained anonymous until Sept. 28, when an amended complaint was unsealed in the U.S. District Court of Eastern New York.

In August, the federal court in New York froze the assets of many of the defendants in the lawsuit, including Levitan.

What the Gilead Sciences lawsuit claims happened

Gilead manufactures several HIV drugs that treat or prevent the spread of the deadly virus.

The company alleges in its lawsuit that the counterfeit network was set up to illegally buy Gilead-manufactured drugs off the street, taking advantage of low-income and homeless people. The drugs were then repackaged and, in some cases, relabeled and sold to pharmaceutical suppliers through "fly-by-night" shell companies across the country.

The suit alleges that bottles of the powerful antipsychotic drug Seroquel were sold in bottles labeled as anti-HIV drugs.

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The complex scheme involved forging documents, known as pedigrees, that federal law requires to go along with drugs to prove the legal chain of custody back to the manufacturer, according to the lawsuit.

In at least one case, federal prosecutors said during a court hearing in July in an ongoing prosecution of one of the "kingpins" in the conspiracy, that a woman took what she believed was an HIV drug but turned out to be Seroquel and had difficulty walking and nearly lost consciousness, according to court documents.

Connections to Streamline Boats and South Palafox Group

Gilead identified two "kingpin" defendants it said were at the top of the conspiracy, Lazaro Hernandez and Armando Herrera, both Florida residents.

Hernandez was a former corporate officer of Streamline Performance Boats and a business partner with Levitan.

Levitan partnered with Hernandez and others to form Streamline Boats of Northwest Florida, a sister company of the Miami-based Streamline, and is the company that holds the lease at the Port of Pensacola.

Levitan was also a principal in the South Palafox Group, a local investment firm that was in control of the infamous Rolling Hills landfill in Wedgewood.

Questions over the ownership of Streamline arose earlier this year when its Miami landlord moved to foreclose on the Hialeah factory, and the company's two founders were removed from corporate filings with the state of Florida.

Hernandez had been delisted as a corporate officer in public filings with the company a year earlier, and in the same 2021 filing, Levitan was added as an executive vice president at the Hialeah company.

In July, Hernandez was arrested and charged with conspiracy, wire fraud and money laundering by federal law enforcement in connection to the HIV drug counterfeiting scheme.

While Hernandez is the only individual charged in connection with the counterfeiting scheme so far, much of the court document in the case remains under seal.

It appears that his case will head to a trial after the holidays.

Hernandez is also facing another federal indictment in a similar but separate drug counterfeiting scheme in South Florida with 14 other people who federal prosecutors say ran from 2013 to 2019. Eight people, in that case, have pleaded guilty.

Lawsuit alleges Levitan was involved in managing supply of counterfeit drugs

Gilead's lawsuit labeled Levitan as one of two "leader" defendants who managed the flow of counterfeit drugs between suppliers and distributors involved in the conspiracy, and Levitan was the only one of the dozens of defendants who knew the true identity of Hernandez.

"Levitan and Kingpin Defendant Hernandez know each other well, and both serve or served as executives of the same Florida-based boat company," the lawsuit said. "In fact, Levitan is responsible for introducing Hernandez – known only as 'Rob' to everyone else – to Distributor Defendants Safe Chain and Worldwide Pharma."

Levitan was not immediately available for comment Monday.

The complaint points out that Levitan has already been convicted of money laundering once in the 1990s when an undercover Internal Revenue Service agent busted Levitan in a scheme to launder $1 million in illegal narcotics profits.

The complaint notes that since his release from prison in 2007, Levitan has been listed as a corporate officer in more than 40 different Florida corporations.

The complaint alleges that Levitan was directly involved in managing the supply of the counterfeit drugs and quotes from emails where Levitan asked for more "inventory." In another email, another defendant sent Levitan a draft of a forged pedigree that would be used to sell the drugs, noting the correct addresses would be added later.

What has happened since lawsuit was filed

A seizure order for all material related to Gilead from the defendants' homes was issued on Aug. 11. The court authorized federal law enforcement to execute the seizure order. Levitan's Pensacola home was included on the list.

On Aug. 19, Levitan was removed as a corporate officer in filings with the state of Florida on at least two companies he was an officer in, Streamline Boats of Northwest Florida and Invictus Holdings.

Levitan has not officially responded to the lawsuit, but court documents show he was served with the lawsuit Aug. 23.

Gilead warned consumers in January of the counterfeit drugs, saying it had discovered more than 85,000 bottles that had forged pedigrees.

The lawsuit lays out an exhaustive investigation into the network. For example, to identify Hernandez, who describes himself as a professional gambler, the company subpoenaed geolocation data of "burner" phones used as part of the conspiracy and cross-referenced that data with subpoenaed flight records of a private jet "high roller" flight offered by a Las Vegas casinos to connect Hernandez to the burner phone.

Gilead appears to be turning over much of its investigation to federal law enforcement officials.

"Gilead will continue to work closely with the U.S. Food and Drug Administration (FDA), pharmacies, and the Department of Justice to remove counterfeit and tampered medication from circulation and to prevent future distribution of counterfeit medications," the company said in a press release in September.

Jim Little can be reached at jwlittle@pnj.com and 850-208-9827.

This article originally appeared on Pensacola News Journal: Gilead lawsuit: John Levitan accused in HIV drug counterfeit ring