eBay, the online marketplace giant, has agreed to pay $59 million to settle allegations that it violated the Controlled Substances Act by allowing the sale of thousands of pill presses and encapsulating machines through its platform without proper oversight.
These devices are commonly used by drug traffickers to manufacture counterfeit pharmaceuticals, including fentanyl-laced pills.
The settlement, announced by the Department of Justice on Wednesday, resolves a federal investigation which found eBay failed to adequately verify purchasers’ identities, maintain sales records, or report suspicious transactions to the Drug Enforcement Administration (DEA), as required by law for sellers of regulated drug paraphernalia.
“Counterfeit pills laced with fentanyl are a significant contributor to the deadly overdose epidemic,” said Associate Attorney General Vanita Gupta.
“The Department is committed to using all available enforcement measures to ensure that companies involved in selling the equipment that makes it possible to create these dangerous pills comply with the Controlled Substances Act.”
Mass Producing Deadly Counterfeit Drugs
Pill presses enable users to mass produce pills, while encapsulating machines allow powder drugs like fentanyl to be shaped into pill form. When used with fake molds or stamps, these devices can mimic prescription opioids or other medications, potentially containing lethal doses of illicit substances.
The DOJ said hundreds of eBay pill press buyers were found to have also purchased counterfeit molds and dies enabling them to create knockoff pills indistinguishable from legit pharmaceuticals. Many customers went on to be prosecuted for drug trafficking.
Fueling the Fentanyl Crisis
Authorities warn counterfeit fentanyl pills have become a major contributor to the epidemic of opioid overdose deaths over the past decade. More than 150 Americans die every day from synthetic opioid overdoses, largely driven by fentanyl and similar compounds.
“Americans deserve to be protected from the dangers of counterfeit prescription pills,” said Principal Deputy Assistant Attorney General Brian M. Boynton.
“The Civil Division will continue to work with our law enforcement partners to ensure that all those involved in the sale of counterfeit pills and the equipment used to manufacture counterfeit pills are held accountable.”
Lax Oversight Allowed Suspicious Sales
The Controlled Substances Act requires strict regulation of pill presses, encapsulators, and other pharmaceutical manufacturing equipment. Sellers must verify buyers’ identities, keep sales records, and report suspicious transactions to the DEA.
Federal prosecutors say eBay failed to properly vet buyers or report sales of these devices, including industrial-capacity pill presses capable of pumping out thousands of counterfeit pills per hour.
Many eBay customers who purchased presses were later arrested on drug charges. But in violation of the law, eBay had not reported their suspicious activity to authorities.
“Through its website, eBay made it easy for individuals across the country to obtain the type of dangerous machines that are often used to make counterfeit pills,” said U.S. Attorney Nikolas P. Kerest.
eBay Agrees to Enhanced Compliance
Along with the $59 million settlement, eBay has pledged to improve its monitoring of restricted items like pill presses and encapsulators. The company will implement more robust verification procedures and reporting to authorities.
The settlement underscores online marketplaces like eBay have a responsibility to prevent the sale of regulated items to bad actors. Other tech and e-commerce platforms are likely taking notice to ensure their compliance programs are up to par.
“This settlement holds eBay accountable for its compliance lapses, serves as a reminder to other e-commerce companies that the Justice Department will enforce these requirements, and will help keep these items out of the hands of criminals moving forward,” said U.S. Attorney Henry C. Leventis.
As the fentanyl epidemic continues to claim scores of lives, authorities are ramping up efforts to choke the supply chain and distribution of the extremely potent synthetic opioid. The eBay pill press settlement represents a major step towards cutting off drug traffickers from vital manufacturing equipment.