Utah authorities gave ‘green light’ to CEO accused of illegally receiving coronavirus drug, his lawyer says

Elected officials knew about actions by Meds in Motion founder Dan Richards, says defense attorney Greg Skordas.

A Utah pharmacist accused of illegally receiving a controversial coronavirus drug “had a green light from a lot of very prominent Utah authorities to do exactly what he did,” his defense attorney asserts.

Dan Richards, founder and CEO of Draper-based Meds In Motion, has evidence that supports his account of what elected officials knew about how he obtained hydroxychloroquine, said defense attorney Greg Skordas.

Richards was charged Monday with a federal misdemeanor for allegedly receiving drugs mislabeled as an herbal extract from a Chinese manufacturer that wasn’t registered with the federal Food and Drug Administration.

Skordas, a recent Democratic candidate for Utah Attorney General, declined to describe the evidence or name the leaders he said were aware of Richards’ actions, beyond describing them as communications and conversations with elected and public officials.

He said the information provided by Richards impacted the Utah U.S. Attorney’s decision about what charge to file. Skordas said he and Richards were in regular contact with prosecutors since investigators executed a search warrant several months ago at the company’s Draper headquarters.

“The U.S. Attorney’s Office recognized that Meds In Motion and Dan were doing everything they could to assist the state and make the product available to Utahns as soon as possible,” Skordas said. “That’s why what would have been more serious was only charged as a misdemeanor.”

Federal prosecutors say Richards received more than 500 kilograms of hydroxychloroquine and 50 kilograms of chloroquine in a shipment from China labeled as herbal Boswellila serrata extract, also known as Indian frankincense.

An initial hearing is slated for 1 p.m. Friday, when Richards could enter a guilty plea because a deal with prosecutors is largely negotiated, Skordas said. He declined to disclose the terms.

The maximum punishment for the charge of receiving misbranded drugs in interstate commerce, if convicted, is up to one year in prison and a $100,000 fine, a spokesman for Utah’s U.S. Attorney said Tuesday.

The spokesman declined to comment on the case, which is being prosecuted by attorneys in the financial crimes unit who coordinate public corruption and health care fraud cases. The case was investigated by the FDA with assistance from the FBI, both of which referred a request for comment to the U.S. Attorney’s Office.

In the early days of the COVID-19 pandemic, prominent Utah leaders and elected officials turned to Richards and asked him to procure hydroxychloroquine as soon as possible, Skordas said. The malaria drug was hailed by President Donald Trump as a “miracle” treatment for coronavirus before the FDA in April warned against its use for COVID-19.

Richards launched Meds In Motion in 2013. In late March, he secured an $800,000 no-bid state contract to obtain hydroxychloroquine and chloroquine and was poised to sell another $8 million of the drugs to the state.

The federal charge does not specify whether the mislabeled drugs were related to the state contract, but it alleges Richards received the shipment on or about April 8, around the same time emails show the state was planning the purchase.

“Dan ultimately is responsible for the way it was done,” Skordas said. “But he was working under the understanding that procuring the product was very important at the time.”

Skordas said he believes Richards’ intentions were good. “If hydroxychloroquine had turned out to be what the president and others said it was,” Skordas said, “Dan would have been lauded as a hero.”

Utah ultimately canceled the contract and Richards refunded the money without delivering the drugs.

Joe Dougherty, a spokesman for the state’s COVID-19 response, also declined to comment on the federal prosecution. Asked whether officials inquired how Richards was able to get the sought-after drugs, Dougherty wrote in an email that “no public officials would have been aware of such a specific detail related to an individual contract.”

“I don’t believe any of the senior officials from the last administration would have been involved to a level that would have led to a deep dive on the supply chain,” he said.

Dougherty emphasized that the state was buying many products through emergency procurement early in the pandemic, and hydroxychloroquine was just one of the supplies it was seeking.

But with at least one press conference involving several high-ranking officials — including Utah Senate President Stuart Adams — who highlighted the hydroxychloroquine deal with Meds In Motion, few procurements were as high profile as the purchase of the drugs.

Meds In Motion is not licensed by the FDA to be a wholesale distributor of drugs. It does have a state license to compound medication, which means it can fill tailored prescriptions for individual patients but not on a mass scale, according to federal records.

The state Division of Occupational and Professional Licensing, which falls under the Department of Commerce, is reviewing the federal allegation against Richards, Skordas said. He added, however, that the licensing agency doesn’t typically take action against an individual license for a misdemeanor conviction.

Meds In Motion does have a history of problems identified by the state, including serious violations at its Draper operation that put its license at risk in 2020, KUER reported. Richards said in May that he had addressed those issues and Meds in Motion was in compliance. A spokesman for the Department of Commerce declined to comment on whether the federal case puts Richards’ license at risk.