Feds settle with eBay for $59 million over unauthorized sales of pill presses

(CN) — The U.S. Department of Justice announced a $59 million settlement with eBay on Wednesday after investigators found the e-commerce company sold thousands of pieces of unauthorized pharmaceutical manufacturing equipment on its website.

The announcement of the settlement reveals that the federal government investigated eBay for violating the Controlled Substance Act by allowing its users to purchase thousands of pill presses and encapsulating machines capable of producing counterfeit pills and drugs laced with fentanyl.

The investigation, the feds say, found that eBay failed to comply with the act’s regulations for selling the equipment by skipping its requirements for purchaser identity verification, record-keeping and reporting to the Drug Enforcement Administration. The government also found that many of the same eBay users purchasing the equipment had ordered counterfeit molds, stamps or dyes capable of producing pills that mimic brand-name drugs.

“Through its website, eBay made it easy for individuals across the country to obtain the type of dangerous machines that are often used to make counterfeit pills,” said U.S. Attorney Nikolas Kerest, from the District of Vermont, in a statement. “Our investigation revealed that some of these machines were even sold to individuals who were later convicted of drug related crimes.”

Kerest said that the $59 million settlement is an important step to ensure e-commerce platforms comply with regulations that protect the public. As such, eBay has also committed to enhancing its compliance program for the sale of regulated items like pill presses, encapsulating machines and counterfeit molds.

“Americans deserve to be protected from the dangers of counterfeit prescription pills,” said Brian Boynton, principal deputy assistant attorney general from the Justice Department, in a statement. “The Civil Division will continue to work with our law enforcement partners to ensure that all those involved in the sale of counterfeit pills and the equipment used to manufacture counterfeit pills are held accountable.”

In a statement Wednesday, eBay maintained it acted lawfully and denied the government’s allegations. But it said the settlement is “in the best interest of the company and its shareholders as it avoids the costs, uncertainty and distraction associated with protracted litigation.”

“EBay’s actions to remove products that could be used for counterfeit pills — including dies, molds and pill presses — prior to any request from the DOJ or other authorities, and years before the government turned its attention to these products, prevented tens of thousands of potentially problematic listings from appearing on our marketplace,” eBay wrote. “Government officials have repeatedly commended eBay for our partnership with law enforcement and efforts to support investigations into illegal pill press usage.”

Follow @alannamayhampdx