Deep Inside the Pill Trade : To Corrupt Doctors and Drug Runners, David Hall Was a Middle-Aged Pharmacist Who Filled Prescriptions Without Asking Questions. To the Drug Enforcement Administration, He Was the Undercover Agent It Had Been Waiting For.
On a January morning in 1984, a policeman found a bloodstained Toyota pickup near the Holiday Inn in Burbank, its passenger window shattered by a bullet. The truck belonged to a 50-year-old druggist from Northridge named David Wheaton Hall. He wasn’t at home. His boss hadn’t seen him for days.
A mystery was what federal drug agents wanted. They had staged Hall’s vanishing act, Hollywood blood and all. And they had flown him away from Los Angeles, where he had spent 12 months as a civilian turned undercover operative in a state and federal investigation of prescription drug trafficking.
Hall was still “dead” 16 months later when prosecutors called a press conference to announce the filing of criminal and civil actions against 34 people caught in a “sting” called Operation Rx. They did not mention his name. Yet they now say they owe it all to Hall, a portly, gray-haired man who was leaning anonymously against a back wall.
Law enforcement hadn’t been on Hall’s agenda when, still adrift two years after a divorce and bankruptcy, he drove south from a sleepy Central California town looking for work. He stumbled into a drug underworld in South-Central Los Angeles and notified the authorities. They started him on a year of three lives: pharmacist, drug dealer, agent for the Drug Enforcement Administration.
“Hall came forward and literally put himself out there working on our behalf,” state Atty. Gen. John Van de Kamp says. “It was a tremendous sacrifice in regard to his time and a tremendous public service.”
Hall’s secretly taped adventure in urban espionage led to the convictions in federal court of seven doctors, five clinic owners, three independent drug dealers and a pharmacy owner, plus a host of state actions. There is evidence that it helped curtail illegal sales of drugs. And it is still paying off with indictments.
Hall now lives under a new identity in another state. He agreed to make his story public for the first time, he says, for some of the same reasons that he turned informer--including a thirst for excitement. He said he mostly wanted to punish people who were exploiting the profession to which he had given nearly 30 years.
State prosecutors estimate that the trade in illegal prescription drugs is worth about $1 billion a year in California. The DEA says half the drug overdoses reported by U.S. emergency rooms and coroners stem from prescription drugs, which users often boil in liquid form and inject.
The profit potential in the powerful, strictly regulated medications that command the highest prices is enormous. One tablet of Dilaudid, a painkiller popular as a heroin substitute, normally costs 50 cents at retail. Brought to a user through a network of crooked doctors, unscrupulous pharmacists, drug dealers and street people, it sells for as much as $55.
The doctors write prescriptions for the drugs and sell them for $50 to $300 to independent operators. They in turn buy the drugs in volume from pharmacists and peddle them to users. A copy of each prescription is sent to the state to account for every pill, as the law requires.
“There have been individual doctors who were prosecuted before, but that involved fraudulent prescriptions to a few individuals,” says Robert C. Bonner, the U.S. attorney for Los Angeles. “This investigation gave us a much better understanding of the whole distribution network, which goes far beyond just one sleazy doctor and a few junkies.”
With his spectacles and cherubic, florid face, Hall looks the part of the avuncular corner druggist. But the man one prosecutor called “our Walter Mitty” is not what he appears.
His hobbies have included flying, scuba diving and prospecting for gold. He says he once stopped filling prescriptions to try making a Jacques Cousteau-style movie off Baja California--only to go back behind the counter when it didn’t work out.
He speaks in nervous bursts of words. “I’ve always been really hyper,” he says. “It’s my nature. Before I quit smoking about three years ago, I smoked three packs a day. I always had one burning, or even two or three. When I do something, I do it completely. Some people might say compulsively.”
Born in Seattle, Hall grew up in Fresno, earned a pharmacy degree at Idaho State College in 1959 and went home to practice. From 1966 to 1977 he owned a drugstore in the tiny farming community of Caruthers, southwest of Fresno. He was on the school board for three two-year terms.
The drugstore failed in 1977 after the only doctor in town died. Hall didn’t have much luck with a second store he opened in nearby Clovis. By 1980 he’d declared bankruptcy and parted from his wife of 19 years.
Having soured on drugstores, Hall started an Amway home-products distributorship. It fizzled, and he went off with a friend to start a short-lived costume jewelry factory. In the summer of 1982 he returned to Clovis. He was resigned to re-entering pharmacy work somewhere. “I wanted a change in scenery,” he says. “It could have been Los Angeles. It could have been San Francisco. I just wanted something different.”
On a bright Sunday in October, 1982, he went to the Clovis library to read Los Angeles Times help-wanted ads. He jotted down a phone number in an ad that said simply, “Pharmacist needed for new drug store.”
On a two-day trip to Los Angeles, at a Bob’s Big Boy in Inglewood, he met with Josephine Brown, who said she owned the Slauson Avenue Pharmacy, on Slauson near Crenshaw Boulevard.
She said she had just taken over the 3-month-old business. She and the drugstore manager, another woman, needed a druggist to qualify their business for a state pharmacy license. “They wanted to run a pharmacy, but they didn’t really know anything about it,” Hall says. The idea of using his entrepreneurial zeal in a new business appealed to him.
He took the job, provisionally. He wanted to study the drugstore’s prospects. A week later he moved into a motel on Figueroa Street.
Hall drove his pickup around the neighborhood. It was largely black and poor, its side streets lined with small, well-kept homes with trim, tiny lawns. A Baptist church was across the street from the pharmacy. So was a restaurant that served Southern-style cooking.
It was--and is--an area plagued by drugs. The pharmacy stood on the verge of what the police call the Crenshaw Corridor--convenient to both the San Diego and Harbor freeways. The police say people from throughout Los Angeles drive there to buy drugs on street corners.
Hall, of course, had other business on his mind. “I realized there was only one other pharmacy within about six blocks,” he says. “It seemed like there were quite a few older people in the neighborhood, and that’s good for a pharmacy. I saw there were quite a few doctors’ clinics within 10 or 12 blocks.”
In the empty store, he and the women talked about a floor plan and a budget. “We were also sifting through papers, bottles, cartons and other junk left behind by the previous owners.” In drawers in a back-room desk and behind the counter, Hall found old sales records.
The pharmacy had sold some drugs at prices and quantities that seemed high. According to a 169-page federal court affidavit in which Hall describes his experience, 2,400 prescriptions had been filled in only four weeks. Most prescriptions--including those for the stimulant Preludin and various codeine-based medications that Hall knew to be widely abused--were filled for $85 to $125. That was two to four times the regular price.
“I realized that there were patients who fooled around with prescriptions for drugs they were addicted to,” Hall says. “And of course I’d heard about doctors who were crooks. But I’d never met one.”
The phone would ring with strange requests, Hall says. “Like, ‘Can I get a script busted?’ I’d never heard that phrase.” It meant getting a fraudulent prescription filled.
He told Josephine Brown about the records and calls. “She said she didn’t know what it was all about, and she really seemed shocked.”
Hall fretted. “I thought that the fact that the pharmacy had been open under the previous owner was a good base for our business,” he says. “But now I was wondering what kind of base this was.”
Hall bought a sandwich at the cafe across the street. The proprietor had had inklings about that drugstore. He said people used to line up at its back door in the evening. “He said it was an actual line, like at a movie,” Hall says. The man suspected that the store was pushing drugs into a neighborhood that already had plenty.
Alone at the pharmacy after lunch, without telling anyone, Hall dialed the state Board of Pharmacy, hoping to speak with an inspector. They were all out. He still didn’t suspect his employers. “I just thought something was wrong and somebody should know about it,” he says.
That afternoon he drove to the pharmacy board’s office on South Broadway, determined to tell his story even if he had to wait. As it turned out, an inspector was there. Better yet, he was the board’s supervising inspector for Southern California. Hall was ushered into the office of Joe Sorbello.
“I said I’m working here and I’d found this out,” Hall says. “And he said to leave and forget about the whole thing and thanked me and shuffled me out of his office. He said, ‘Go back to Clovis, get out of this area. You don’t want to be here.’ When I left his office, I was furious.”
Sorbello maintained in a telephone interview that Hall’s version is “a bedtime story” and “ridiculous.” Of Hall, the chief inspector says, “He’s a snitch.” After a couple of terse remarks, Sorbello, 61, hung up.
Back at his motel, Hall dialed the Drug Enforcement Administration and spoke to agent John Uncapher, who has specialized in prescription drug abuse for 15 years.
“I thought immediately that the guy might be legitimate and that he might be on to something,” Uncapher recalls. He invited Hall to come up to meet him and another agent.
“They acted like they believed me,” Hall says. “They said they wanted documentation. They wanted the sales receipts and the notebooks that the pharmacist had written.”
Early the next evening, Uncapher and his colleague drove in an unmarked car to a parking lot at a McDonald’s near the pharmacy. Settling onto the back seat, Hall handed the agents the previous druggist’s notebooks and an envelope stuffed with sales receipts. The DEA men thought they recognized some names, and their faces told Hall that they were intrigued.
Hall says he was afraid of being seen. But there was another sensation. “I thought it was neat,” he says. “It was exciting.”
A few days later the agents asked Hall to become a DEA pen pal.
“They said, ‘We’ll tell you what, Mr. Hall. You just stay on the job, and if you hear of anything, you let us know,’ ” Hall says. For a month he wrote them letters filled with license plate numbers, overheard snippets of conversation, names of people who visited the store.
He met Josephine Brown’s husband, Floyd, a jovial, bearlike man in his early 60s. In the affidavit he quotes Brown as saying he had financed the previous owner. A dispute had arisen, and the pharmacy was put in Josephine’s name, he quotes Brown as saying. Hall says in the affidavit that Brown told him he planned to seek kickbacks from doctors in return for filling certain prescriptions.
“It wasn’t very clear to me what he meant,” Hall says. “There were a lot of innuendoes, but the suggestion was obviously that there was a lot of money to be made at this pharmacy and I could be a part of it.”
The DEA asked him in again. Would he submit to a polygraph test? He would. “They asked all sorts of questions,” Hall says. “ ‘Do you cheat on your wife? Do you have a girlfriend?’ ” When they asked, “Do you cheat on your income tax?” Hall said no, and the machine raised an eyebrow. Hall says he doesn’t really cheat, “but the agents said everybody fails on that.”
He passed and from then on would be an official CI, a confidential informant. The agency opened a personnel file for him. It gave him a code number: 0012. (“Five better than 007,” he noted.) His code name would be Rex.
“It was Rex for Rx,” he says. “First, people around the office started knowing me as the pharmacist, but then late one night somebody started calling me Rex. It stuck.”
Hall agreed to work for the DEA without pay and live on his drugstore salary of $1,000 a week. Unpaid informants look better to jurors.
“After the polygraph test,” Hall says, “that’s when I really felt I might become a part of something that would really be important.”
The agents had also decided that they had been handed an extraordinary opportunity. “Rex is the sort of guy who only comes along once in a blue moon,” Uncapher says.
Uncapher and Hall’s other new colleagues knew the frustrations of building cases against doctors who flout the law.
Prescription-drug dealing is an elusive crime, its pursuit laborious, although less so in California and six other states with computerized systems to follow prescriptions for the most potent medicines, which are used mostly in hospitals.
Investigators can track the state-issued triplicate forms doctors must use to prescribe those drugs. The doctor keeps a copy; the pharmacist keeps one and mails one to Sacramento. A book of 100 forms lasts most doctors a lifetime. When officials detect a suspiciously prolific prescriber, they can try to make an undercover purchase. But the cases are hard to win in court, because the doctor typically argues that he diagnosed a real patient or was fooled by an addict. About 10 doctors are successfully prosecuted a year.
Some months before Hall arrived in South Los Angeles, officials in Sacramento had seen a trend. Katina Kypridakes, a staffer with the state Bureau of Narcotic Enforcement, noticed that requests for triplicate forms were pouring in from Southern California and that a handful of pharmacies in South-Central Los Angeles were filling a remarkable number of the prescriptions.
“We noticed there were a lot of prescriptions for George Washingtons and a lot of Ben Franklins and A. Lincolns,” she says. Twenty doctors were writing 10% of the triplicate-form prescriptions in California.
State and federal enforcers met in Los Angeles in April to study Kypridakes’ information. It suggested that the crime in South-Central Los Angeles had become unprecedentedly well organized. That presented a problem, because the arrests of one or two dishonest doctors might simply warn the rest. The government longed for a medical professional who could penetrate the trade.
No one came to mind. According to DEA officials in Washington, going outside to a practicing doctor or pharmacist had never been tried. Various agencies began investigations. Kypridakes says an undercover agent in one waiting room looked up and was surprised to see an operative from another agency also waiting. The effort needed focus.
Then in walked Hall. In him, agents would have a bona fide druggist already on the inside. There was no need to plant him. He would act the crook using his real name, his real past. Most of his cover story would be absolutely true.
The DEA arranged for the state to hold up the license of the drugstore until it was ready with Operation Rx. The agents assembled a task force of state and federal investigators and made assignments. Computer analysts would follow the paper trail from Sacramento. State and federal agents would protect Hall by trailing him in unmarked cars when, wired for sound, he kept dates with targets.
Hall had to be tutored. “I learned how to shake a tail,” he says. “I drove a circuitous route wherever I went. Four blocks and turn. Then you do it again and look back. Four blocks, turn, look back.”
He learned to operate midget recorders taped to his ankle. He learned to work in front of hidden cameras, maneuvering targets into the best light. Agents gave him a quick legal education, especially on entrapment.
By now Hall was living in a rented condominium in Northridge. The agents told him that he would be spending a lot of time at an apartment in Burbank. He shared it with a fictional girlfriend. She was a stewardess who flew out of Burbank airport and lived in Denver most of the time. She loved drugs, especially cocaine. A woman agent would play her, when necessary. Hall got to choose her name, so he would remember it. He picked Frances, his sister-in-law’s name.
The agents screwed extra-bright bulbs into the lights. In decorating, they favored beige. They hung a landscape over the sofa. They installed a two-way mirror in the dining room wall. From next door they drilled a hole for a camera. Hall fetched a rocking chair from Clovis, he says, “just to give the place some warmth.”
At the pharmacy, Hall was still setting things up. As he would all through his time there, he worked in a T-shirt, blue jeans and sneakers. “The sleazier I looked, the better.”
The drugstore was no prize either. Anyone looking for a big selection of chewing gum or sunglasses would have been disappointed. “We put out a lot of Kleenex. It’s cheap,” Hall says. “I stocked an entire wall with soda pop.”
The DEA told Hall to start slowly. At first he would simply keep a diary. “We didn’t know--will these doctors respond to me?” he says. “Let’s see if this apartment idea will work. It was step by step.”
In late December, the DEA told the Board of Pharmacy to issue a license to the Slauson Avenue Pharmacy. On Jan. 13, it opened for business.
The store was remarkably busy that first day. One after another, customers strode to the drug counter clutching prescriptions.
At first, Hall charged them the high but not outrageous prices that he and the Browns had worked out. Within a few days, the affidavit says, Floyd Brown was charging $100 for 60 tablets of the stimulant Preludin, up from $72. Later, it says, “he told me to tell the Preludin customers that we were out of Preludin and that our order hadn’t come in yet. Then, when the customers really wanted it bad, we could charge $120.”
Hall says of the store: “The key reason you knew it was phony was the prices. Nobody who came to the store questioned our prices.”
The rest of Hall’s introduction to the drug market was by telephone. At first he took notes. Later, agents bugged the phone.
“There was a clinic about 10 blocks away, and they started calling up every 20 minutes or half hour,” Hall says. “Someone on the other end would say, ‘This is the physician’s assistant over here, and we have some prescriptions for you to fill.’ They’d send their people in groups of three or four or five or six, and all of them had prescriptions for restricted drugs that most doctors almost never prescribe and never in the amounts that were on these prescriptions.”
One was Talwin, a painkiller that can be boiled down and injected. The affidavit quotes Brown as ordering the stockpiling of Talwin because the manufacturer was making the drug harder to “cook.”
The affidavit says Floyd Brown busily trafficked in drugs himself. He would raid the drugstore’s stock to supply customers and buy prescriptions to “cover” the medicine, the document says. He began giving Hall envelopes stuffed with hundreds of dollars as his share of the income.
Hall filled the prescriptions and kept track of the doctors they came from. He phoned the clinics to get closer to the sources.
“I made a policy that I had to talk to the doctors at the clinics,” he says. “I’d say, ‘Hello, doctor. I just want to check whether you wrote this prescription,’ and the doctor would say, ‘Yes, I wrote it. That person has a bad cough. . . . That person has lower-back pain.’ ”
He and Floyd Brown visited clinics to drum up business. “The clinics we went to in the neighborhood looked like medical places, and they’d been fixed up a little with some old medical equipment,” Hall says. “But they were run by street people who get the crooked doctors to work for them. They were fronts.”
One clinic owner was Velveteen Jackson, a heavyset woman with a stylish wardrobe who later spent six months in jail for conspiracy to acquire drugs. Hall says she prided herself on her ability to cultivate the weaknesses of the doctors, particularly the young ones, whom she had nudged toward crime. “She said to do it slowly,” Hall says in the affidavit. “She said you let the doctor do the wrong, you never suggest it to him.”
The doctors’ “patients” were usually unemployed street people known as runners. They worked for entrepreneurs called transporters.
“The transporters are independent dealers who finance the whole thing,” Hall says. They paid the clinic a fee to deal with the doctor. They paid the doctor for the prescription. They paid the runners. They sold the drugs to users.
“Most of our customers were the runners,” Hall says. “They looked poor. They’d have faded old clothes and hair that hadn’t been brushed. A lot of them were old.
“The transporters, a lot of them would come in looking like a million dollars. They’d have gold jewelry on their wrists. They wore designer clothes, some of them.
“There was this one gal who came in, and it was pathetic. She was a runner in her early 20s. Dirty. Scroungy-looking. I filled her prescription for APC 4, a painkiller with codeine. God, she looked really bad. I asked what the problem was, and she said, ‘Oh, God, I’ve got a toothache.’ And I said, ‘You should take one for yourself,’ and she said, ‘You know I can’t do that.’
“We both knew what she had to do with them. If she didn’t deliver them to the transporter, she wouldn’t get her fee for filling the prescription. Don’t forget, the transporter was paying us like $1 per pill and would sell them for $5 to $7 per pill. With that kind of money involved, she couldn’t afford the cost of a pill.”
Prescriptions were treated as order forms for large quantities of drugs in their greatest strengths. “The doctors would call up and say, ‘How many can you do for me today?’ ” Hall says.
The affidavit lists five such calls on Jan. 18. One of them, it says, was from Dr. John Berrel Barnes Jr.
Over the winter, Hall got to know Barnes. He was the 29-year-old son of a Los Angeles dentist. He had been out of Yale Medical School for three years. His undergraduate degree was from Princeton. He lived in Beverly Hills but worked in the neighborhood, mostly at Velveteen Jackson’s Mar-Vel clinic.
“Most of the doctors or clinic owners I met got their patient names out of the phone book, but not Barnes,” Hall says. “He thought he was smarter than that. He wasn’t going to get caught prescribing drugs for phony patients. When you asked Barnes for a prescription, he opened a little black book he always carried with him and which had the names of friends and people he’d written prescriptions for in the past.”
The doctor dealt mostly with Floyd Brown, coming to the drugstore to sell enough prescriptions for a $10,000 down payment on a Cadillac, the affidavit says. But he also did business with Hall--and thereby became the first doctor invited to Burbank.
Hall started pretending to moonlight as an independent dealer. He asked Barnes to sell some prescriptions on the side, to him. Barnes agreed. They set a time and place: 9 p.m. on March 18, parking lot of the Burbank Holiday Inn.
Hall was on time. Barnes was not. In their apartment the drug agents checked their watches. The camera was ready, the microphones on. Hall worried about how he would act in his new role, out from behind the counter. An hour went by. Hall gave up. “I thought, thank God I don’t have to do this,” Hall says. “I was hoping it wasn’t going to happen.
“Then there he was.”
Hall led the way to the apartment. The tape of their meeting was shown at Barnes’ trial. To see it is to be struck, as the agents repeatedly were, by Hall’s remarkable ability to act.
They walked in talking about Floyd Brown, whom it turned out Barnes didn’t like much. Barnes wore a T-shirt. His voice was flat, his speech slurred.
Barnes poured Courvoisier into a large snifter. He sat down and talked a little bit about himself. When drugs came up, he said, “I haven’t been doing this . . . long, and when I came out of medical school, I just wanted to practice medicine.” He said he was just learning how much the “dirty” stuff was worth. Hall replied, “I’m learning too.”
They sat down and did business.
“We got our license on the line,” Barnes said. “Anyway, what you want to do?”
Hall: “I’d like to get about, uh, you can tell me what’s fair, OK?”
Barnes: “All right.”
Hall: “I’d like to get, uh, say, four Quaaludes, scripts for Quaaludes, and, uh, three, say three Preludins.”
Leaning over the table, squarely in front of the mirror, Barnes put his prescription pad in front of him. Hall increased his order to 10 prescriptions, five for Preludin and five for Quaaludes. Hall suggested $75 each. Barnes wanted $100. Hall agreed: $1,000 for 10 prescriptions.
Hall produced a crumpled paper on which he had written fictional patients’ names. Barnes wrote them onto the prescription forms, the camera zooming in on his hand. Hall had a stack of government-supplied $20 bills on the table. “Here you go,” he said.
Barnes counted his money into neat piles. He counted and recounted each pile. As he left, he took a package of cookies from a bowl on a table. The girlfriend’s airline cookies.
Hall closed the door and returned. He looked into the mirror, into the camera, grinned and raised his hands triumphantly over his head.
One suspect after another gave variations of this performance. At the end of the investigation, Hall had appeared on 21 video- and 186 audio- tapes.
Barnes is serving two years in Terminal Island Federal Prison after being convicted of distributing drugs through illegitimate prescriptions. He is the only doctor in the first group of defendants who pleaded not guilty, and he is appealing.
Hall mastered the argot of script-dealing, its deliberately vague language, its hard bargaining. He learned to swear profusely. He had an impish streak. For a while, he kept a cup of Tootsie Roll Pops in the apartment. He’d give one to each doctor as he left. It was a joke--the doctor was a sucker.
Sometimes the agents would telephone from next door during negotiations. Hall was bargaining so vigorously one time that they called and ordered him to take the proffered deal. They would tell him to talk slower. At times his performance amused them so much that he could hear laughter through the walls.
The pattern was usually the same: a contact through the pharmacy and an invitation to Burbank. The doctors came from all over the Los Angeles area, from Inglewood, Gardena, Long Beach, Woodland Hills. They were young and old, black and white.
“It wasn’t that hard,” Hall says. “These people were very greedy.”
Hall says he sought to talk one doctor out of crime.
They met in her office in South-Central Los Angeles. She would sell a Preludin prescription, the affidavit says, but she seemed to have a conscience. “She said she didn’t care what happened to it, as long as children didn’t get it,” Hall’s document says. “I asked her how could we really know that children didn’t get it.” He says he told her that she “really shouldn’t do this kind of business.” In the end, investigators said, she didn’t.
Instead of a well-organized conspiracy, Hall found a subculture whose members knew about one another and traded information.
Nor did he see any violence during the year. He was on the white-smock end of the trade. But agents say they think one subject of Operation Rx was murdered, although they will say no more about it. Hall says he wasn’t personally fearful. “The only thing I was afraid of is that I might blow the thing,” he says. But he thinks at least two people would like to kill him.
He says he seemed on the verge of being uncovered several times.
Once he had to think fast when a doctor questioned him closely about his “girlfriend.” It wasn’t easy to invent details. He worked with a woman agent only two or three times, and it wasn’t even the same one each time. Mostly she was a fiction supported by details in the apartment.
Once, in a doctor’s office, he looked up to see the physician staring into his open briefcase, where a microphone lay unseen amid his papers.
Once the phone bug was nearly found. A DEA man posing as a Pacific Bell repairman had planted a microphone in the drugstore’s telephone. Hall switched it on and off by passing a magnet along the side of the phone.
About five months into the operation, the phone malfunctioned. A pharmacy assistant called Pacific Bell. Josephine Brown was in the store. Hall was frantic. The repairman walked through the door, toward the phone. In a burst of inspiration, Hall grabbed the telephone cable under the counter and yanked the wires from a junction box. Nobody saw him. The phone man had to return the next day to fix the wiring. The original problem apparently lay elsewhere in the system and never recurred.
On weekends, Hall says, he led a normal life. He left town to visit family and friends about every other week. In Northridge he paid $750 a month for his two-bedroom condo. He got to know a couple of neighbors, but not well. “I avoided talking about what I did for a living.” He shopped and saw movies at the Northridge Fashion Center. He went bowling.
In his time at the Slauson Avenue Pharmacy, Hall says, he filled only one prescription from an ordinary customer. It was for the wife of the man who owned the cafe across the street. Hall says Floyd Brown paid him $38,000 under the table, which he turned over to the government. When he began his new life, the government began paying him $4,000 a month to replace his former salary.
Those running the case in Los Angeles welcomed 1984 with the idea that dozens of cases were ripe for the picking. But with an abruptness that left a bitter aftertaste in some quarters, Hall’s undercover role was aborted by DEA higher-ups.
First, DEA officials in Washington asked to be updated on all aspects of the case. They wanted to know everything: the legal issues, the targets, the use of Hall. Four people flew back to make the presentation on Jan. 10. They were two DEA agents who worked with Hall; state narcotics agent Dale Ferranto, and Daniel Gonzalez, the assistant U.S. attorney then in charge of the legal work.
Facing 12 to 15 high-ranking agency officials, Ferranto says, the men gave a detailed description of the investigation.
One of the officials questioned Hall’s integrity, according to Ferranto. “This guy comes out and says, ‘How do you know this guy is not dealing off on the other side? Why do you trust this guy?’
“I looked at the guy and said, ‘Hey, if this guy is crooked, you can take my badge.’ I took my badge out of my pocket and put it on the table and said, ‘If he’s crooked, I quit.’ ”
Tempers cooled, but those in Operation Rx went away uneasy.
About three days later a message arrived on a DEA Telex machine in Los Angeles. Without explanation, agents say, it ordered Hall’s removal from the pharmacy. Some people are still unhappy about it.
“There was a lot that could have been done if it had continued,” says Gonzalez, who is now a private attorney. Steve Helsley, then chief of the state Bureau of Narcotic Enforcement, says, “I was unhappy it ended.”
In explanation, Ted Hunter, in charge of the DEA’s Los Angeles office, says the evidence Hall gathered was becoming overwhelming. “We have a bureaucracy here,” he says, “and I had to ask myself, are we choking ourselves with evidence?”
Another reason for removing Hall--some think it was the main reason--involved the hundreds of thousands of pills he had distributed.
Bill Marcus, a state deputy attorney general, says, “There was a worry that somebody would be injured or die as a result of drugs that the government had sanctioned putting out on the street, and that the government could be held liable for that.”
Hall says: “Sure it bothered me. These were real people who took real pills. But it would have bothered me more if I had just walked out of that job because I didn’t like what was going on.”
The order to pull out sent the agents into a panic, Ferranto says. Hall wasn’t all that had to disappear. The 10,000 prescriptions he had filled were needed to make cases. The agents wanted to retrieve their telephone bug. They didn’t want frightened suspects flying to Mexico before indictments and arrests.
On January 13, 1984, Hall was told he was going to be leaving town. He and Ferranto worked together the next night to spirit away the evidence. If their story isn’t exactly the stuff of James Bond, it was tense enough for a druggist from Clovis.
Working by candle and flashlight, the pair and another agent filled several boxes with records. Just as Ferranto parked behind the store and got out to start loading, a police helicopter appeared overhead, its searchlight raking the ground. “I felt like an escaped prisoner,” Ferranto says. “I was banging on the door, but they didn’t know who it was. I said it was me. Finally they let me in.” After the chopper faded away, the agents got in the car with the records. Hall locked up and walked to the corner.
He realized he had a problem. “I didn’t remember what kind of car we came in,” he says. A car paused in traffic, and he started to get in. It was the wrong one. “I said, ‘I’m sorry about that,’ and backed up,” Hall says. “I was laughing so hard I had tears in my eyes. I saw the car I really wanted pull up, and I got in laughing. It was a nervous laughter.”
Next morning, agents drove him to Los Angeles International Airport.
A few days later a number of people associated with the Slauson Avenue Pharmacy received phone calls from a Burbank police detective. He said he was investigating the disappearance, perhaps the murder, of David Hall.
A police sergeant named Don Goldberg had obligingly driven the Toyota truck to a firing range in the Verdugo Hills to set up the deception. “I fired a shot into it and put in some fake blood,” Goldberg says.
The truck was left at Angeleno Avenue and 1st Street, to be “found” shortly thereafter. The appropriate paper work for the bogus case was entered in the files of the Burbank police. Hall’s clothes were left hanging in his Northridge condominium.
Some unidentified callers did inquire about Hall. They were told the matter was under investigation.
The government began building cases from the mountain of evidentiary raw material. Gonzalez was replaced by Joyce Karlin as the Operation Rx prosecutor. Indictments were handed down but kept sealed until the public announcement. The separate cases began their fitful journeys through the legal system.
Prison terms for the 16 people convicted in federal court ranged up to six years. A 17th defendant is at large. State prosecutors began civil procedures against most of those 17 and against 17 other people. The state also took steps to revoke the licenses of more than two dozen doctors, clinic owners, nurses and others. The Slauson Avenue Pharmacy stayed open for about a year with new pharmacists, then closed. Today it is a fish market.
Prosecutors filed civil charges against Floyd and Josephine Brown, alleging that they illegally dispensed and trafficked in controlled substances. Those cases are pending. Brown is under investigation by the U.S. attorney’s office, according to his lawyer, Robert Corbin. In a brief interview, Josephine Brown said neither she nor her husband had committed a crime. Prosecutors say Floyd Brown’s role made him central to the investigation, but they gave higher priority to the doctors.
In the month after Operation Rx made headlines on May 16, 1985, officials in Sacramento believed they saw its impact. The number of triplicate-form prescriptions fell to 76,000, a 14% drop that led to the conclusion that the news had frightened some doctors out of the trade. The monthly number has never reached the previous levels, the state says.
Users can still buy bootleg medicine in South Los Angeles. “I think it’s harder, but it’s not yet at all impossible,” says Karlin, the prosecutor. Rodney Bowles, a counselor with the Asian American Drug Abuse Program, says: “From my knowledge, use of prescription drugs is less prevalent, and it’s because of the busts for sure. It’s slowed down considerably, but it’s still there.”
“I think we know most of the doctors that are doing it,” Karlin said a few days before the indictment on April 30 of Dr. Leonard Breslaw, 61, of Century City. He is accused of 120 counts of illegal prescription-writing. The indictment was to be the start of a new series of prosecutions. As many as 15 are in the works, Karlin said.
The drug agents used their contacts to build Hall another identity. He got a new name and a new Social Security number, a new driver’s license, a new pharmacy license. He testified against Barnes, and he helped with another “sting” operation for a while. He won’t say where, only that it’s over.
A few months ago he visited the Burbank Police Department to retrieve his Toyota. He washed out the remnant of Goldberg’s false bloodstains and covered the shattered window with a sheet of plastic.
He drove it for many hours, to a small town in another part of the United States, where he had the plastic replaced with glass. He still drives the pickup. His new town, he says, is smaller than Clovis. An ocean is close enough to feel the breeze. The air smells of pine. He works part time in a drugstore with a soda fountain. No one knows about his past. The job is not nearly as interesting as the one on Slauson Avenue.
“It hasn’t really happened yet, but I can see myself missing the excitement,” he says. “It has me scared. When that happens, I don’t know what I’m going to do.”
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