On October 12th, 2018

Sacramento Family Sentenced for Illegal Foreign Pharmaceuticals Scheme A California DOJ and TRaCE task force investigation

SACRAMENTO – On October 11, 2018, the California Attorney General’s Office announced the sentencing of a family of three – Serhiy Kybych, 55, his wife Svitlana Kybych, 52, and their son Oleh Kybych, 31, all of Sacramento – for the possession of unregulated pharmaceuticals and counterfeit merchandise intended for sale. The Kybychs own three businesses in the greater Sacramento area.

According to the plea agreement, Svilana Kybych and Serhiy Kybych will pay a total of $79,902 in restitution to the State of California. The defendants will pay: $49,947 in unpaid sales tax and $6,609 in unpaid use tax to the California Department of Tax and Fee Administration; and $23,346 to the Tax Recovery and Criminal Enforcement (TRaCE) Task Force. The defendants will pay an additional $10,000 in restitution to the counterfeit merchandise trademark holders. Both defendants will serve 120 days in county jail and will be placed on three years of probation. Defendant Oleh Kybych will be placed on three years of probation.

“This case is an example of law enforcement agents, investigators and officers from various areas of expertise and departments, working together to investigate criminals who put the lives, and the health, of others at risk,” said California Statewide Law Enforcement Association (CSLEA) President Alan Barcelona.

“The Kybychs put lives at risk by selling illegal foreign pharmaceuticals to enrich themselves,” said Attorney General Xavier Becerra. “In California, we take seriously criminal activity that imperils public safety and erodes trust in our healthcare system. Criminals like the Kybychs will be held accountable.”

The sentencing comes after a two-year long investigation by the California Department of Justice’s Bureau of Investigation and the multi-agency Tax Recovery and Criminal Enforcement (TRaCE) Task Force. The investigation discovered that the Kybychs marketed the illegal pharmaceuticals, which had not been approved by the Food and Drug Administration, such as phenobarbital and antibiotics including Augmentin, Flemoxin, Amoxil, and erythromycin. The Kybychs purchased and imported these illegal pharmaceuticals from Russia and not only sold them but administered them to unsuspecting customers. The investigation also discovered the Kybychs possessed hundreds of items of counterfeit merchandise intended for sale.

The TRaCE Task Force is comprised of investigators and special agents from multiple agencies working together to investigate, prosecute and recover revenue lost to the underground economy. These agencies include the California Department of Justice - Bureau of Investigation, California Department of Tax and Fee Administration, California Franchise Tax Board, California Employment Development Department, California Department of Motor Vehicles, Federal Bureau of Investigation, the Department of Homeland Security - Investigations, and the Internal Revenue Service - Criminal Investigation. The memorandum of understanding facilitating interagency work is set to expire on December 31, 2018.

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