The Straw Man

SALESMAN FELL INTO A SHADOW MARKET

Sam Whatley Jr., a salesman for a Baltimore pharmaceutical distributor,
scoured the list of licensed drug wholesalers in Florida. For a salesman
who relied on cold calls, the list was an opportunity: If he made a big
sale or landed a new account, the commission could help him top his
best-earning year of $26,000.

Florida had 1,399 wholesalers -- a big pool. Whatley turned to the A
listings and started dialing.

He hit pay dirt in the B's. BTC Wholesale LLC of Kissimmee, Fla., placed
its first order and said it wanted to keep doing business. For Whatley, 48,
that call last year was blind luck -- until it proved bad luck.

Through BTC, Whatley was lured to run a firm in Odenton, Md., that is now
alleged to be one of several shell companies in a multimillion-dollar fraud
operation. The operation sold hundreds of thousands of doses of medications
that were diluted, stolen, relabeled or illegally imported, a Florida
indictment states. The drugs were stored in everything from duffel bags to
car trunks.

Whatley, who has not been charged, said he thought he was throwing in with
reputable and rich men who could help secure his future.

"I know I've been called a straw man, and I guess that's about right. I'm
learning I was very, very naive," he said. "I swear to you, if I had known
these guys were out there peddling false and diluted stuff, I wouldn't have
had anything to do with it."

The man behind the fraud was Michael Carlow, according to the indictment
filed in Fort Lauderdale, Fla., in July against Carlow and 17
co-conspirators. Despite a 1973 robbery conviction, Carlow, 51, managed to
obtain a pharmaceutical wholesaler's license. In 2000, he lost that license
after he was caught loading $83,000 worth of the chemotherapy drug Neupogen
from a car trunk into his van in a Miami parking lot midafternoon in June.
Neupogen requires refrigeration and is not supposed to be shaken.

Carlow received probation, yet by the time of the July indictment he was at
the hub of at least 12 pharmaceutical wholesaling operations in seven
states, prosecutors say. The licenses were in the names of Carlow
associates and relatives. Investigators contend that many of the drugs came
from suspicious sources and flowed into the laundry room and garage of
Carlow's $1.3 million home in the gated community of Weston, Fla.

Carlow's attorney, John Howes, said, "The state has far-fetched ideas about
what happened and doesn't have the hard evidence and proof to establish
what they say."

When Whatley called BTC, he spoke with Thomas Atkins Jr., Carlow's
brother-in-law. Whatley said the two men soon offered him a job, sending
him an express mail letter with plane tickets to Florida and beachfront
reservations in Fort Lauderdale.

During his nearly 30 years as a pharmacy technician and in sales, Whatley
said in an interview, "nobody had ever sent me anywhere, never flown me
anywhere. These guys were first class." To Whatley, Carlow's house "was
like a castle. Classy, grand. And Michael is a short, dumpy guy like me who
seemed to have gotten fortunate. I saw myself getting there."

Carlow or his wife owned a yellow $87,000 Dodge Viper, a $249,000 Ferrari
convertible and a 36-foot Sea Ray boat named "Delicious," investigators said.

Whatley's first step was a $30,000-a-year sales job plus commission with
G&K Pharma, a licensed pharmaceutical wholesaler in a strip mall on Piney
Orchard Parkway in Odenton. Whatley helped open the business, and Atkins
was president. Whatley later said he thought the business was selling
pharmaceuticals obtained from other legitimate wholesalers and drug
manufacturers.

"I was really trying to make something of it," he said.

He landed a few new accounts. But then Atkins and Carlow told him all he
needed to do was check the mail and pick up an occasional package, Whatley
said. G&K was merely a front, one of the licensed companies Carlow needed
for an appearance of legitimacy, the indictment and investigator records
allege.

According to an account he gave to investigators and The Washington Post,
Whatley's job became hawking pharmaceuticals that Atkins and Carlow had in
Florida. But the drugs' pedigree papers -- records that are supposed to
allow every drug sale to be tracked -- showed the Florida drugs coming out
of Maryland.

Whatley said the discrepancy "didn't make red flags go off for me, because
this was only my second wholesale job. I was just getting my feet wet when
I went to G&K."

A shipment of counterfeit drugs finally brought the operation down.

On Sept. 27, 2002, Whatley received Procrit in an overnight package. He
later recalled that it "looked just perfect, right off the factory line."
The boxes of the injectable drug, which fights fatigue in HIV and cancer
patients, had the 3-D watermark on the label and the anti-tampering seal in
place.

It was, investigators later acknowledged, very good counterfeit.

Kevin Kulik, Atkins's attorney, said his client did not know that some of
the product may have been doctored.

Whatley sent out feelers for buyers, including to a middleman in Miami he
had met through Carlow and Atkins. From a drugstore on Miami's North
Flagler Street, there was a nibble.

At going rates, a box of the high-strength Procrit was selling for $1,731.
The price offered the drugstore: $1,693. Before he agreed to the deal, the
pharmacist asked to see the drug's pedigree paperwork. He became suspicious
because the papers appeared to be boilerplate and did not seem to match the
order.

He alerted state investigators to the offer. At their behest, the sale was
arranged for 129 boxes of Procrit for $218,397.

When the middleman arrived, the drugs were seized. The pedigree papers --
claiming the drug had moved from Ohio to Maryland to Indiana and then Miami
- -- were false, investigators said. Many of the boxes also contained only
one-twentieth of the strength on the label, making them counterfeits,
investigators said in a search warrant affidavit.

Whatley was at a grocery store on Oct. 1, 2002, when he received a cell
phone call. Federal agents working with Florida authorities wanted to meet
him. They told him that the shipment had been seized and that it was
counterfeit. He agreed to cooperate. Two weeks later, Whatley received a
termination letter from Atkins: G&K was suffering financially and no longer
needed his services.