According to The Wall Street Journal, Regulators and industry watchdog groups repeatedly warned Google that it was taking ads from rogue online pharmacies in violation of federal law.
Last week Google took a $500 million charge in its recent quarter to cover potential charges related to resolving an investigation by the Department of Justice.
CNET is reporting at the same time Google was being praised by the White House for cracking down on illegal Internet pharmacies the Justice Department was investigating the company for selling ads to the illegal Internet pharmacies.
The Wall Street Journal is also reporting that federal prosecutors are investigating whether Google employees “knowingly accepted business from illegal drug sellers.” which would open the company up to criminal charges of aiding illegal online activities.
The Journal is also reporting that the FDA conducted a sting operation on Google, posing as “representatives from rogue Internet pharmacies.”
According to the Journal, Google had been warned as early as 2003 that illegal online pharmacies were using its advertising system to place ads on Web pages and in 2009, a California Western School of Law professor published a report, finding that Google and others were profiting from illicit online pharmacy ads. “On the basis of our analysis, I think they were turning a blind eye,” the professor, Bryan Liang, told the Journal.
It was also in 2009 that the U.S. Attorney in Rhode Island subpoenaed the third-party pharmacy verification service, PharmacyChecker.com, the company’s vice president, Gabriel Levitt, told CNET. He confirmed that regulators were asking questions about Google’s selling ads to illegal Internet pharmacies.
In December 2010, company executives of Google were at the White House, with executives from Microsoft, Yahoo, Go Daddy, to announce the creation of a nonprofit organization to facilitate sharing information about illegitimate online pharmacies in order to shut them down.
Google is now working to settle the case with the Justice Department.
There was a fascinating article the other day about a report which concluded that payment processing for most illicit pharma purchases go through three – count ’em three – payment processors.
It’s funny how nobody wants to touch the banks on this stuff, when the money trail is a cleaner choke point.