INDIAN COPS BUST NETWORK TRAFFICKING PRESCRIPTION DRUGS TO

UNCLAS SECTION 01 OF 02 CHENNAI 000349

DRUG ENFORCEMENT ADMIN HQ WASHINGTON DC

SIPDIS

E.O. 12958: N/A
TAGS: SNAR ETRD PTER IN
SUBJECT: INDIAN COPS BUST NETWORK TRAFFICKING PRESCRIPTION DRUGS TO
UNITED STATES

1. Summary: India's Narcotics Control Bureau (NCB) has made three
arrests in South India as a part of a wider effort to prevent
illegal export of controlled pharmaceuticals, primarily to the

United States, by so-called "net pharmacies." The NCB's
investigation has revealed a network comprised of foreign brokers,
call center workers, and shippers sending oxycodone and hydrocodone
without prescription to the United States. The NCB has also noticed
changes in the narcotics trade in India. Both cocaine and ketamine
are increasingly popular in India's big cities. Heroin prices have
risen dramatically, forcing traffickers to ship the drug in smaller
consignments. End summary.
NCB busts network sending oxycodone to United States
--------------


2. NCB South Zonal Director S. Davidson Devasirvatham told post
that the NCB arrested two people on August 31 based on a lead.
According to Davidson, the two suspects, Imran Khan and Venkatesh
Rao, worked at a "pharmaceutical processing" call center in
Hyderabad. Khan was the owner of the call center, and Rao who is
said to be fluent in English and technologically proficient, acted
as a liaison with their foreign associates. The third suspect, Rama
Patel, was arrested in Mumbai, where he procured the drugs and
redirected shipments to customers in the United States. From
interviews and a thorough examination of instant messaging records,
the NCB has determined that the operation began when the suspects
met a foreign national known only as "Paul" through an internet
message board. Paul is understood to be an American and to be
operating either in the United States or Australia. According to
Davidson's account, the suspects acquired lists of potential
customers who had registered on the website usdatacorporation.com as
being interested in purchasing the drugs. Rao and other call center
workers would then contact the potential customers directly and take
their orders. The customers would then be referred to Paul, to whom
they would make payments for their orders by credit card. Local
media reports have also linked the call center to the website
www.indianpharmaceuticalsmanufactures.com.


3. Davidson said that Patel, located in Mumbai, procured the drugs
from sources he has so far identified only as "local traders" and
sent them to Khan and Rao in Hyderabad. As they received customer
orders, the two Hyderabad suspects repackaged the drugs in plain
packaging and sent the packages via postal mail to Mumbai, where
Patel then shipped them on to the United States. In all, the NCB
seized over 100,000 pills from the suspects, including hydrocodone,
oxycodone, diazepam and other prescription medications. Davidson
said there is some evidence to suggest that the drugs were rerouted
in the United States in a manner such that they appeared to the
recipients to have originated there rather than in India. Davidson
also said he believed Paul's role in the operation was, in addition
to receiving payments, to make customers feel more comfortable and
that they were not making payments to someone overseas.


4. The export of semi-synthetic opioids such as hydrocodone and
oxycodone is illegal under Schedule I of India's Narcotic Drugs and
Psychotropic Substances Act, which requires a license for
international trade. Davidson said the two "boys" in Hyderabad
claimed ignorance of any wrongdoing; they thought they were merely
exploiting a loophole that allowed them to profit from the drugs'
availability in India. Davidson said the illegal sale of drugs
abroad through web-enabled distribution centers operating in India
is becoming increasingly common. It is lucrative and relatively low
risk: opioids and other drugs that require prescriptions in the
United States and Europe are more readily available at low cost in
India. Young, tech-savvy IT professionals are usually at the center
of the operations. Davidson said traffickers gradually acquire
inventory by buying in small quantities to avoid detection. Buyers
pay in dollars through the internet by credit card.

5. According to Davidson, the United States is the primary
destination for pharmaceuticals smuggled through South India. The
NCB's recent investigations have indicated that the foreign brokers
using India's internet pharmacies also source opioids from
Bangladesh, Nepal, and Pakistan, where, like in India, they are
easily and inexpensively available over the counter. Davidson said
that associations like that between the Hyderabad suspects and Paul
often begin with postings on internet message boards. He said he
had seen postings on the website www.callcentersindia.com that
appear to be from people based in the United States attempting to
find partners in India for procurement of opioids. He asked for
cooperation from U.S. authorities to help curb the phenomenon.

6. NCB has been working to sensitize courier companies to
suspicious content as part of its efforts to crack down on illegal
pharmaceuticals. "Thus, many more seizures are expected in near
future," said Davidson. Last year the NCB intercepted shipments of
nearly 40 kilograms of illegal tablets bound for the United States
at the Chennai airport, largely based on suspicious or non-existent
return addresses.
Cocaine and ketamine growing more popular, heroin more expensive
--------------


7. Davidson also discussed the status of domestic narcotics
trafficking. He said cocaine is becoming increasingly popular in

CHENNAI 00000349 002 OF 002


1. Summary: India's Narcotics Control Bureau (NCB) has made three
arrests in South India as a part of a wider effort to prevent
illegal export of controlled pharmaceuticals, primarily to the
United States, by so-called "net pharmacies." The NCB's
investigation has revealed a network comprised of foreign brokers,
call center workers, and shippers sending oxycodone and hydrocodone
without prescription to the United States. The NCB has also noticed
changes in the narcotics trade in India. Both cocaine and ketamine
are increasingly popular in India's big cities. Heroin prices have
risen dramatically, forcing traffickers to ship the drug in smaller
consignments. End summary.
NCB busts network sending oxycodone to United States
--------------

bigger cities like Chennai. Cocaine is available for between USD 65
and 110 per gram on Chennai streets. This, Davidson said, is a sign
that rising affluence among urban elites in Chennai is creating a
demand for "party" drugs. The NCB has also seen a rise in the use
and trafficking of ketamine, which at USD 540 per kilo can be had
for a fraction of the cost of heroin. Ketamine, indicated for use
in humans and animals as an anesthetic, is also commonly used
illicitly as a "party drug" with hallucinatory effects. Ketamine is
not prohibited in India, and while its export is controlled through
the Customs Act, illegal export of Ketamine is a "bailable offense"
with a much lighter potential sentence than narcotics trafficking.



8. Turning to the heroin trade, Davidson said the NCB is seizing
smaller quantities than in the past. Davidson attributes this to
the increase in the street value of the drug, which has risen from
USD 2,175 to USD 4350 per kilogram to more than USD 10,800 to USD
21,600 per kilogram. Traffickers have been less willing to risk
shipping large quantities at one time as the cost per kilogram has
risen. Davidson attributes the rise in street value to the
reduction in licensed poppy cultivation area in India from 20,000
hectares to 6,000 hectares. Since much of the heroin found on the
street in India begins as "leakage" from these areas of legal
cultivation, their reduction has led to a price increase.


9. Comment: Davidson, who oversees anti-narcotics efforts in the
four South Indian states (whose combined population exceeds 220
million),was forthcoming with sensitive law enforcement information
and expressed eagerness to cooperate with the U.S. Drug Enforcement
Agency (DEA). He invited DEA to come to Chennai to discuss
potential collaboration on the case. We conveyed the invitation to
DEA New Delhi, which has responded favorably. Davidson's eagerness
to cooperate with DEA is representative of many local officials in
South India, who are often more open to ties with U.S. law
enforcement authorities than central government authorities. End
comment.

SIMKIN