Chapter 8
DEA Headquarters, 2010
In the fall of 2010, Joe Rannazzisi summoned hundreds of agents and investigators stationed across the country to DEA headquarters. His deputies had prepared a detailed PowerPoint presentation singling out the companies responsible for shipping the largest quantities of pain pills to Florida. Jim Geldhof, the supervisor in charge of the DEA’s Detroit field division, noticed that some of the companies highlighted in the presentation were based in his backyard. He fumed as he took in the staggering numbers and saw how they lined up with the escalating death toll across the country.
Geldhof, a thirty-eight-year veteran of the DEA, grew up in Detroit despising drugs, a hatred he shared with his father, a Chrysler tool and die factory worker. They had seen firsthand how heroin, crack cocaine, and pills hollowed out the once-thriving neighborhoods of the city. But rather than join his father on the factory floor like so many kids of his generation, Geldhof was looking for a way to confront the scourge, and in 1972 he joined the Bureau of Narcotics and Dangerous Drugs, renamed the Drug Enforcement Administration the following year.
A burly man with a shock of white hair, a thick Michigan accent, and little patience for incompetence, Geldhof wanted to be in the middle of the action at the new agency created by President Nixon. He saw his share, working cases in New York City and Newark during the 1970s and early ’80s, a time when syringes littered public parks and pimps and drug dealers populated Times Square.
In 1986, Geldhof was promoted, returning to Detroit as a DEA supervisor of diversion investigators for the Midwest. In the fourteen years he had been away, Detroit had been ravaged. Blocks of abandoned houses and boarded-up storefronts blighted the city. Decimated by the loss of auto industry jobs, Detroit was awash in drugs and guns and murders. Prescription opioids were quickly rising in popularity, joining heroin, crack, and crystal meth. Among the prescription drugs, Dilaudid, an opioid normally prescribed to cancer patients, was the most popular pill on the street, followed by brand-name opioids Percodan, Percocet, and Vicodin.
In 2000, the year Geldhof returned to Detroit, the city recorded 637 homicides, including the deaths of 43 children under the age of sixteen, making it the murder capital of the United States. The deluge of drugs fueled the homicide rate. In the years following the introduction of OxyContin in 1996, the drug scene shifted dramatically in Detroit, as it did in many other cities and towns across the country. Purdue’s blockbuster painkiller set off a tsunami of misuse, and OxyContin and generic tablets of oxycodone and hydrocodone swept through the city.
Geldhof directed his three dozen DEA investigators in Detroit, Cleveland, Columbus, Cincinnati, Louisville, and London, Kentucky, to pursue doctors who were writing illegal prescriptions. But his investigators were overmatched. They could hit rogue doctors every day, sending some of them to jail, and not make much of a difference. As soon as one went out of business, another would pop up.
As Geldhof watched Joe’s presentation at DEA headquarters, he was happy to see his friend in a position of real power at the agency. He always liked Joe. The two had become friends in Detroit during the ’80s and ’90s, when Joe was working drug-related murders and knocking over meth labs.
After the presentation, Geldhof returned to Detroit and assigned some of his best investigators to examine the drug distribution companies singled out by Joe. One of them was James Rafalski, who was already on the trail of a company in Michigan called Harvard Drug, which had off-the-charts amounts of business in Florida. (The company had no connection to the university.) Rafalski was the Joe Friday of the Midwest regional office, a just-the-facts DEA investigator with cropped hair, a manicured mustache, and intense brown eyes that never seemed to blink. Nicknamed “Ralph,” he loved diving into the minutiae of cases, piecing together disparate bits of information from documents and sources, working the edges, slowly and methodically closing in on the targets of his investigations.
Rafalski had once considered an engineering career in the auto industry and even followed his father to the Ford Motor Company, working on a shock absorber assembly line after high school. But the U.S. auto industry was reeling in the early ’80s and Rafalski decided to join some of his friends who had found steady work in law enforcement. Once out of college, he became a guard at a county jail before joining the police department in the town of Romulus, a Detroit suburb. After twenty-one years, Rafalski had risen to the rank of executive lieutenant and could have retired, but he wanted to stay in the game. At forty-nine, he joined the DEA.
Harvard Drug was based in Livonia, another suburb of Detroit. Most of the oxycodone the company was shipping to Florida came from one manufacturer: Mallinckrodt. Rafalski began by looking at the numbers. He was floored by what he found in the DEA database. The Automation of Reports and Consolidated Orders System, a mind-numbing bureaucratic name for one of the DEA’s most potent weapons, collects sales data from every drug manufacturer and distributor in the country. Known by the acronym ARCOS, the database revealed that Harvard had distributed thirteen million tablets of oxycodone across the country between March 2008 and March 2010, nearly half of them going to Florida. Rafalski spotted another red flag: Doctors purchased the vast majority of the pills. Normally, drug distributors sent pills directly to pharmacies.
Rafalski knew he had a case and began to dig deeper. He noticed that one of Harvard’s biggest customers was the South Florida Pain Clinic in Broward County. It was run by twin brothers, twenty-seven-year-olds Christopher and Jeffrey George. Rafalski quickly learned that the brothers were already under investigation by the DEA and the FBI in South Florida for drug trafficking. The twins had recruited doctors on Craigslist and opened their first pain clinic in Wilton Manors, a small city three miles north of Fort Lauderdale. Customers could visit the clinic, see a doctor, fill their prescriptions, and head back the same day to Kentucky or West Virginia or Ohio, flush with pain pills. The brothers soon expanded, opening a chain of clinics, each bringing in as much as $50,000 a day. They spent their riches on lavish homes, Rolex watches, and fast cars, including a Lamborghini Murciélago worth nearly $400,000.
On June 10, 2010, Rafalski and a team of nine DEA investigators and forensic computer specialists raided the offices of Harvard inside a large warehouse the size of a Home Depot. The seventy-six employees of the company sat in silence as members of the raid team pulled thousands of records documenting every sale of oxycodone—customer files, company notes, and internal order records. They also mirrored Harvard’s servers, capturing every keystroke made on a company computer.
When he started to go through the records, Rafalski saw that Mallinckrodt was supplying the company with oxy 30s through its leading salesman, Victor Borelli. He also discovered from internal sales documents that Harvard was supplying other pain clinics run by the George brothers. The case was starting to come together, the targets coming into focus.
Rafalski began to interview employees of Harvard; he was surprised that they answered his questions without lawyering up. Rafalski let his subjects talk, rarely interrupting them. Sometimes they would implicate themselves or unwittingly reveal key pieces of information. He liked to ask deceptively simple questions. Why did you do it? Or, besides you, who else was involved? He was constantly amazed by what people told him, often against their own self-interest. At one point, he sat down with Harvard’s top compliance officer, Samir Shah. He asked Shah about the pills the company had purchased from Mallinckrodt and shipped to Florida. Shah told him that Mallinckrodt executives knew exactly where every one of their pills had gone. That was startling news to Rafalski. Drug manufacturing executives had claimed to him and other DEA officials that they didn’t know where their pills went once they shipped them.
Rafalski’s heart raced, but he tried to remain impassive. “How do they know?” he asked. Shah told him his company and other drug distributors provided their sales information to Mallinckrodt in exchange for a rebate on drug purchases. It was called a “chargeback,” a term Rafalski had never heard before. In other words, Mallinckrodt was aware of—or should have been—the identities of all of Harvard’s customers, including the George brothers.