2 sentenced to prison for charity scam

MIAMI (AP) -- The head of a charity with a straightforward name, African Christian Relief, was sentenced Friday to more than five years in prison for reselling on the domestic market deeply discounted pharmaceuticals intended for humanitarian aid.

An accomplice with a record received more than six years.

In different schemes, federal investigators also tied Charles Williams to Angolan conflict diamonds and the sale of cosmetics donated by Avon and clothing from The Church of Jesus Christ of Latter-day Saints.

Williams, 49, received a sentence of five years and three months on guilty pleas to wire fraud and money laundering.

William Walker, a Norwegian citizen with drug and stolen good convictions on his record, received 6 1/2 years after admitting he helped arrange the domestic drug sales.

Both were ordered to pay nearly $1.8 million restitution as part of their sentences. Calls to their attorneys were not immediately returned.

Williams was accused of turning the charity based in Tucson, Ariz. into a piggybank with help from Walker and two fugitives, who helped move the drug shipments through a Miami wholesaler.

The heavily discounted drugs were sold on the domestic market instead of sent to their intended overseas destinations.

Avon's corporate security took its goods back, and the LDS Church cut off bulk supplies of clothing donated to the charity, federal prosecutors said.

Williams was running the charity when he made nearly a $1.8 million profit by buying $6.3 million worth of drugs intended for foreign consumption at a discounted price of nearly $2.4 million, prosecutors charged.

The charity was created in 1992 to supply donated medical supplies and goods to needy people in Africa. Williams joined the group in 1993 and became its executive director in 1995.

He placed orders with the humanitarian aid division of Schein Pharmaceutical Inc., a Florham Park, N.J., company that is now part of Corona, Calif.-based Watson Pharmaceuticals Inc., for drug deliveries to Angola and Peru in late 1999 and early 2000, investigators found. Schein reported its suspicions, and the Food and Drug Administration investigated.

Prosecutors claimed eight shipments wound up staying in the U.S. market, routed through a Miami freight forwarder to look as if import-export traffic was involved. Williams dealt with Crystal Coast Inc., a Miami drug wholesaler and broker that was not licensed until after the deals. Walker, who also uses the name Per Loyning, was Crystal Coast's vice president.

The first purchase of an intravenous iron-boosting drug started small at $8,800. By the fourth order three weeks later, the price tag was up to $414,656.

In a bizarre twist to the case not covered by the indictment, a witness told investigators that Williams put up $20,000 in profits from the illicit pharmaceutical sales for a diamond deal that fell through. A 1997 letter from Williams to an Angolan contact outlined plans for setting up a diamond concession.

One shipment of raw diamonds was delivered, but a Scottsdale, Ariz., broker found them to be worth less than advertised. The intermediary paid back $23,000 fronted for a second purchase and the low value of the first.

So-called blood diamonds help fund wars in Angola, Sierra Leone, Congo and Liberia. Forty-five countries have signed an agreement requiring every diamond to be accompanied by a certificate of origin so blood diamonds will see limited circulation.

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