EBay To Pay $59 Mln To Settle U.S. Charges Over Illegal Sale Of Pill Presses And Machines

(RTTNews) - eBay Inc. (EBAY), an e-commerce company headquartered in San Jose, California, has agreed to pay $59 million to settle U.S. allegations that thousands of pill presses and encapsulating machines were sold through its website, the U.S. Department of Justice said in a statement on Wednesday.

eBay confirmed that it reached a settlement with the U.S. Department of Justice. But the company denied the DOJ's allegations and the settlement does not include any admission of wrongdoing.

The U.S. Department of Justice alleged that Pill presses and encapsulating machines can be used by criminals to manufacture illegal drugs. When used with a mold, stamp, or die mimicking commonly prescribed controlled substances, pill presses are capable of producing counterfeit pills that appear indistinguishable from legitimate pharmaceutical drugs, including pills that are sometimes laced with fentanyl.

The Controlled Substances Act (CSA) regulates certain pharmaceutical manufacturing equipment, including pill presses and encapsulating machines, by requiring identity verification of purchasers, record-keeping, and reporting to the Drug Enforcement Administration (DEA). The requirements are designed to prevent individuals who intend to use these machines illegally from obtaining them and to ensure that the machines are traceable to the end user.

The United States alleged that eBay did not comply with the CSA requirements for thousands of pill presses and encapsulating machines that were sold through its website, including high-capacity pill presses capable of producing thousands of pills per hour.

The United States' investigation also found that hundreds of eBay's pill press buyers also purchased counterfeit molds, stamps, or dies, allowing them to produce pills that mimicked the products of legitimate pharmaceutical companies, and that many of eBay's pill press buyers have been successfully prosecuted in connection with trafficking illegal counterfeit pills.

In addition to the monetary settlement, eBay has agreed to maintain and enhance its compliance program with respect to its prohibited and restricted items policy as it pertains to sales of pill presses, counterfeit molds, stamps, and dies, and encapsulating machines.