Case 4:14-cr-00285-JST Document 338 Filed 05/15/20 Page 1 of 4
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DAVID L. ANDERSON (CABN 149604)
United States Attorney
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HALLIE HOFFMAN (CABN 210020)
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Chief, Criminal Division
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FRANK J. RIEBLI (CABN 221152)
Assistant United States Attorney
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1301 Clay Street, Suite 340S
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Oakland, California 94612
Telephone: (510) 637-3680
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FAX: (510) 637-3724
Frank.Riebli@usdoj.gov
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Attorneys for United States of America
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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OAKLAND DIVISION
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UNITED STATES OF AMERICA,
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Case No. CR 14-285 JST
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Plaintiff,
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MOTION TO REVOKE SUPERVISED RELEASE
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v.
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JEREMY DONAGAL,
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Defendant.
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I.
Introduction
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The government hereby moves to revoke Jeremy DONAGAL’s term of supervised release. As
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described below, almost immediately after being released from prison to supervised release, DONAGAL
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began work setting up a new counterfeit drug operation. He set up a laboratory and pill press operation
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to manufacture the counterfeit pills, and he established a dark web vendor site to sell the pills
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nationwide. He also established vendor pages on dark web criminal marketplaces like Samsara and
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Empire. On May 14, 2020, agents executed search warrants at DONAGAL’s residence and warehouse
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and seized pill presses, punch-dies designed to produce counterfeit drugs, and that packaging materials
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in the same brand name he used on the dark web marketplaces. That same day, agents arrested him. On
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May 15, 2020, a magistrate judge signed a federal criminal complaint charging DONAGAL with
MOT. TO REVOKE SUPERVISION
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unlawful possession of punches and dies designed to produce counterfeit drugs, in violation of 21 U.S.C.
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§ 843(a)(5), and possession of counterfeit drugs, in violation of 21 U.S.C. § 331(i)(3). DONAGAL’s
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criminal activity constitutes a clear violation of several terms of his supervised release. For these
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reasons, the government asks that the Court revoke his supervision.
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II.
Background
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DONAGAL was the “Xanax King.” He manufactured and distributed counterfeit Xanax tablets.
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On April 10, 2015, DONAGAL pleaded guilty to the manufacture, distribution and possession with
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intent to distribute controlled substances, in violation of 21 U.S.C. §§ 841(a)(1) and (b)(1)(C), the sale
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of counterfeit drugs, in violation of 21 U.S.C. § 331(i)(3), and international money laundering, in
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violation of 18 U.S.C. § 1956(a)(2)(A). On September 25, 2015, the Court sentenced DONAGAL to 70
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months’ imprisonment, followed by three years of supervised release. DONAGAL was released to
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supervision on June 27, 2018.
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DONAGAL’s terms of supervised release include the following:
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Mandatory Condition
The defendant shall not commit another federal, state or local crime.
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Standard Condition
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The defendant shall work regularly at a lawful occupation, unless excused by the
probation officer for schooling, training, or other acceptable reasons.
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III.
Discussion
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The Court may revoke a term of supervised release if the Court finds, by a preponderance of the
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evidence, that the defendant has violated a condition of his supervised release. 18 U.S.C. § 3583(e)(3).
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In determining whether to revoke supervision, the Court considers the factors set forth in 18 U.S.C.
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§§ 3553(a)(1), (a)(2)(B), (a)(2)(C), (a)(2)(D), (a)(4), (a)(5), (a)(6), and (a)(7). Id. § 3583(e).
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Consideration of those factors supports revocation here.
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First, DONAGAL began work establishing a criminal enterprise immediately after he was
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released from prison. And it was the same type of criminal enterprise that had sent him to prison once
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already. He was released to supervision on June 27, 2018. Less than six months later, he signed a lease
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on a warehouse in Concord, CA. He signed as the CEO of a company that he said was for dietary
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supplements & personal training. DONAGAL’s wife set up the company in January, 2018, before he
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was released from prison. DONAGAL signed documents declaring himself to be the company’s sole
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manager in September, 2018, just three months after he was released to supervision. The warehouse
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DONAGAL leased became his laboratory and pill manufacturing site. At the same time, he began
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wiring money to a recipient in China. DONAGAL also set up post office boxes at multiple UPS stores
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using fake IDs. He used those boxes to receive shipments from China.
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In February, 2019, he received shipments of large parcels that contained equipment used to
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manufacture tablets, including at least one commercial pill press. Agents posing as delivery drivers
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delivered the equipment to DONAGAL’s Concord warehouse. He tipped them $60 for their labor.
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DONAGAL also established a dark web presence on the TOR network,1 and established vendor
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pages on dark web criminal marketplaces. Through these sites, DONAGAL sold white, rectangular
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tablets stamped with the “GG249” imprint, which is the imprint that the Food & Drug Administration
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has authorized Sandoz Inc. to manufacture and distribute its 2 mg generic alprazolam tablets.
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DONAGAL offered these tablets for sale by the thousands.
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An undercover agent (“UC”) purchased tablets from DONAGAL’s dark web persona on multiple
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occasions, including counterfeit “GG249” tablets. The tablets were white, rectangular bars with the
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imprint “GG” and “2 4 9” separated by “|” scores. They were identical or nearly identical to the generic
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alprazolam tablets the FDA authorized Sandoz Inc. to manufacture and distribute. The agent paid for
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the tablets with the cryptocurrency Bitcoin. On one occasion, agents followed DONAGAL as he left his
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warehouse with a bin full of postal boxes and then drove around to at least two different blue U.S. Postal
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Service collection bins and deposited the boxes. The agents subsequently viewed the boxes; one of
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them was addressed to the UC and contained the same type and approximately the same number of
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tablets the UC had ordered from DONAGAL’s online persona.
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On May 14, 2020, agents searched DONAGAL’s warehouse and found multiple pill presses,
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punch-dies with the “GG249” pattern, thousands of tablets with the “GG249” imprint, and packaging
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and shipping materials in the name of DONAGAL’s dark web persona. DONAGAL was also operating
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1 The TOR network is the portion of the internet accessible only through The Onion Router
(“TOR”) anonymizing browser. I have not disclosed the online persona DONAGAL used because the
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search of those accounts is still ongoing.
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a full-scale laboratory with chemicals, solvents, hotplates, stirrers, a condenser, a drying cabinet, and
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other equipment.
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DONAGAL’s conduct evinces a deliberate attempt to carry on the same illegal enterprise he
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operated previously and which led to his federal conviction and prison term. Evidently, he spent his
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time in custody working out how best to skirt the law and evade detection. He operated through dark
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web marketplaces and a dark web private vendor site that are only accessible through anonymizing
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software, and he used fake IDs to set up PO boxes and send money wires, all to conceal his identity and
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evade detection. And he transacted in cryptocurrencies to conceal his identity and make it difficult to
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trace his assets. Moreover, it appears that he focused on benzodiazepines that are not scheduled
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controlled substances, so as to avoid another 21 U.S.C. § 841 violation. Yet for all his caution and
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planning, he couldn’t resist thumbing his nose at the legitimate pharmaceutical industry. He produced
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counterfeits of generic alprazolam tablets - which enable others (especially in the quantities DONAGAL
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sold) to represent them as legitimate pharmaceuticals. And thus he finds himself charged, once again,
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with a violation of the Controlled Substances Act.
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DONAGAL’s conduct demonstrates that he is not amenable to supervision and that he will go to
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incredible lengths to commit crimes in ways that the Court is unable to detect. It also demonstrates that
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his 70-month prison term neither taught him respect for the law nor deterred him from committing
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crimes in the future. Moreover, the crimes he committed - obtaining the punch-dies to produce, and
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producing, counterfeit drugs - have victims. The victims are the drug users who buy directly from
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DONAGAL, or from the persons he supplies. Indeed, the drug users who buy from the persons
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DONAGAL supplies may not even realize that they are getting counterfeits, and all the dangers that
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come with counterfeit drugs and inconsistent dosing - overdose and death.
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The only way to protect the public from DONAGAL is to revoke his supervision and return him
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to custody to serve whatever sentence the Court imposes.
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DATED: May 14, 2020
Respectfully submitted,
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DAVID L. ANDERSON
United States Attorney
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_______/s/_________________
FRANK J. RIEBLI
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Assistant United States Attorney
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