EDMONDS — Year after year his bosses praised his good work and showered the Edmonds pharmacist with awards.
All the while Milton W. Cheung was stealing money and doling out expired and second-hand medications to customers at the TOP Food and Drug pharmacy in Edmonds.
Cheung, 55, of Lynnwood, pleaded guilty Friday in U.S. District Court in Seattle to acquiring controlled substances by deception and misbranding drugs, both felonies. He faces up to four years in a federal prison and a $250,000 fine.
After discovering Cheung’s criminal activities Haggen Inc. issued a recall in September for prescriptions filled at the pharmacy between June 1 and Sept. 1. Haggen operates the Edmonds grocery store, along with 32 other supermarkets in Washington and Oregon.
Investigators believe Cheung, the pharmacy manager, used an elaborate scheme as a cover to rip off the store for at least a year.
Cheung solicited doctors, hospices, clinics and even TOP customers to donate expired and unused drugs for a philanthropic mission. He told donors he would provide the drugs to less-developed countries, according to investigators.
He collected thousands of pills but instead of shipping them overseas, he added them to the pharmacy’s inventory and handed out the medications to unsuspecting customers, investigators reported.
Many of the drugs were expired and all of them had been handled by other people.
Investigators believe Cheung used the extra inventory to make his pharmacy look profitable; meanwhile he was pocketing cash, making phony merchandise returns and cashing gift cards, assistant U.S. Attorney Ronald Friedman said.
His scheme worked for awhile. Cheung had been named Pharmacy Manager of the Year since 2003.
“He looked like an all-star,” Friedman said. “He was doing it all to mask the thefts. It was a fraud and a public health risk.”
Most expiration dates are fairly conservative and rarely would an expired medication be toxic, said Eric Werttemberger, the director of pharmacy services for Providence Regional Medical Center in Everett.
The larger concern is that expired medication is no longer effective, he said.
“We spend a lot of resources to make sure we remove expired drugs off our shelves. We don’t dispense expired drugs,” Werttemberger said. “You just don’t do that.”
Federal regulations require pharmacies to discard expired prescription medications.
Customers also should have the right to assume that their medication has been properly acquired and distributed, Friedman said.
“He was giving people medication that already had circulated publicly,” he said. “Who knows where it had been.”
Haggen officials replaced the pharmacy’s entire stock as a precaution.
“This has been a devastating event for us as we value the trust relationship we have with our customers,” Haggen’s Chief Executive Jeff Wood said as part of the company’s recall.
Cheung is scheduled to be sentenced in February.
Reporter Diana Hefley: 425-339-3463 or hefley@heraldnet.com.
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