eBay has agreed to pay $59 million after the US Department of Justice accused the online marketplace of selling thousands of pill presses and encapsulating machines, some of which were used by rings trafficking in illegal counterfeit pills.
It’s the fourth largest settlement under the Controlled Substances Act (CSA) and the first-ever settlement with an e-commerce company, a DOJ press release noted.
“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,” Nikolas Kerest, US attorney for the District of Vermont, said. “Our investigation revealed that some of these machines were even sold to individuals who were later convicted of drug-related crimes.”
eBay has denied wrongdoing, pointing to its long history of assisting law enforcement investigations that it said “prevented tens of thousands of potentially problematic listings from appearing on our marketplace.”
“Maintaining a safe and trusted marketplace for our global community of sellers and buyers is a fundamental principle of our business,” eBay said. “eBay is proud of its well-recognized, proactive, and voluntary efforts to remove the products that were the subject of the government’s inquiry from our marketplace. While eBay acted lawfully and denies the DOJ’s allegations, we determined that this agreement is in the best interest of the company and its shareholders as it avoids the costs, uncertainty, and distraction associated with protracted litigation.”
Under the CSA, all sales of pharmaceutical manufacturing equipment like pill presses and encapsulating machines must be reported to the Drug Enforcement Administration (DEA). But the DOJ alleged that eBay skirted these requirements and did not maintain records identifying buyers and sellers of equipment regulated to keep counterfeit drugs like fentanyl off the streets.
This included “high-capacity pill presses capable of producing thousands of pills per hour” allegedly sold on eBay, as well as “hundreds” of “counterfeit molds, stamps, or dies” that purchasers could use to produce counterfeit drugs—sometimes laced with fentanyl—that mimic “products of legitimate pharmaceutical companies.”
In one example specified in the settlement agreement, the DOJ alleged that “multiple eBay buyers” purchased “pill presses and counterfeit dies bearing the imprint ‘M30,’ which is the marking associated with 30 mg oxycodone hydrochloride pills manufactured by a legitimate pharmaceutical company.”
The DOJ crackdown comes years after Bradley Woolard, the leader of a “prolific fentanyl trafficking ring,” was sentenced to 20 years in prison in 2021 after the DOJ found that he had “bought a pill press and mixing materials from websites such as Amazon and eBay and taught himself how to make homemade pills.” Ultimately, Woolard’s operation produced “more than 2.5 million pills containing fentanyl and furanyl fentanyl.”
Since then, “many of eBay’s pill press buyers have been successfully prosecuted in connection with trafficking illegal counterfeit pills,” the DOJ said.
Between 2019 and 2021, deaths from drug overdoses rapidly spiked in the US, peaking at more than 100,000 deaths annually. Last year, the White House Office of National Drug Control Policy (ONDCP) Director Rahul Gupta announced that this trend had flattened through 2022 and 2023 due to efforts to “urgently and aggressively” address the opioid epidemic. Most of the 109,940 predicted overdose deaths between 2022 and 2023 were “caused by illicit synthetic drugs like clandestinely manufactured fentanyl and methamphetamine, often in combination with other drugs,” the White House said.
Associate Attorney General Vanita Gupta, who chairs the Justice Department’s Opioid Epidemic Civil Litigation Task Force, said that because “counterfeit pills laced with fentanyl are a significant contributor to the deadly overdose epidemic,” the DOJ remains “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.”
According to the settlement agreement, eBay must pay the $59 million fine by February 13.
The company also agreed to “maintain and enhance” its CSA “compliance program with respect to its prohibited and restricted items policy as it pertains to sales of pill presses, counterfeit molds, stamps, and dies, and encapsulating machines.”
This includes investing in updates to internal controls, as well as regularly providing the DEA with “seller identification, buyer identification, listing information, and transaction information associated with any listings with sales that have been removed or any purchased items identified as violating eBay’s new Pill Press, Die, and Mold Policy.”
US Attorney Henry Leventis for the Middle District of Tennessee alleged that eBay’s failure to comply with the CSA allowed “private citizens to set up pill factories” in the US “without detection.” DEA Administrator Anne Milgram said that detecting drugs laced with fentanyl remains a top priority.
“Fentanyl—pressed into fake pills that look like real prescription medications—is killing Americans,” Milgram said. “Drug traffickers buy the tools to make fake pills, like pill presses, online. eBay and other e-commerce platforms must do their part to protect the public. And when they do not, DEA will hold them accountable.”