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News (Media Awareness Project) - US: Web: Gaining Riches From Market's Flaws
Title:US: Web: Gaining Riches From Market's Flaws
Published On:2003-10-18
Source:Washington Post (DC)
Fetched On:2008-01-19 08:07:37
A Revolving Door

GAINING RICHES FROM THE MARKET'S FLAWS

If Marty Rubin had realized his ambition of pitching in the big leagues, he
might not have turned to fraud -- at least in the view of one of Rubin's
attorneys.

Rubin was born in Brooklyn, and "baseball was Martin's life," the attorney
said. From "neighborhood stickball games," Rubin advanced to local leagues
until finally moving to California "to try out for the Angels. The tryout
went poorly and Martin was forced to think of other job options," the
attorney wrote.

Rubin bought a drugstore but eventually shifted into a much more lucrative
business. He set up fraudulent pharmacies that ordered discounted
medications and resold them at a markup across the country. With the
profits, Rubin financed a high life: houses in Southern California and Las
Vegas, a condo in Puerto Vallarta, Mexico, and heavy gambling at casinos.

Three times since 1989, he has struck out in federal court and been
imprisoned for drug scams. Rubin, 53, is finishing a five-year sentence in
Long Beach, Calif. Drug manufacturers lost more than $12 million to Rubin
as he fed truckloads of medications into the shadow market, court records show.

Court records from the past 15 years present him as a master at probing
weaknesses in the drug distribution system. He always apologized when he
got caught.

"I apologize and will never do it again," Rubin told a judge during his
first case in Phoenix.

Yet while his jury trial in Arizona was in progress, he was already
involved in deals that would lead to his conviction in 1992 for the same
type of fraud in Kansas City, Mo., court files there show.

The Arizona judge was not pleased to learn of the Kansas City case.

"Judgment might suggest you back off a little once indicted," the Arizona
judge told Rubin. His attorney said Rubin thought he was in a legal
business. Rubin was "not an armed robber," the attorney said.

"He would have gotten less money," the judge retorted, according to a
transcript.

Rubin's attorney said his client had seen the error of his ways "with some
assistance from the jury and court."

Rubin ended up testifying for the government in the case in Kansas City. He
was imprisoned until 1994 and faced a long probation. In seeking to end the
probation, Rubin's attorney told the court that Rubin was "a consultant to
the pharmaceutical industry," where "part of his job is to educate others
about the perils of criminal conduct."

But soon Rubin was in trouble again.

While still on probation in the Kansas City case, he was running a
"one-man" consulting firm in Los Angeles "in order to disguise my
involvement in the scheme and thereby conceal my prior fraud convictions
from pharmaceutical manufacturers," he later admitted in court. He
"masterminded" the creation of a network to once again cheat drugmakers and
resell medications, he acknowledged, becoming a "silent partner" and
controlling "much of the day-to-day operations."

In 1999, Rubin was indicted in Los Angeles after New Mexico pharmacy
inspectors were tipped about an Albuquerque pharmacy called Blue Skies that
was buying large quantities of discounted medicines ostensibly for nursing
homes, hospices and HIV clinics.

David Villegas, the purchasing agent for Blue Skies, testified that he had
no experience and set up the business at Rubin's behest but was told by
Rubin never to disclose Rubin's role. An ex-convict, Villegas said Rubin
gave him $7,000 to find a warehouse for the start-up. Villegas kept a
separate phone line in the business "that was only to be used to talk with
Rubin." Villegas told the court he traveled every third Saturday to Las
Vegas to report to Rubin.
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