David Whitaker, Con Artist, Describes Google Sting Operation That Cost Company $500 Million
CENTRAL FALLS, R.I. - When federal investigators decided to look into whether Google Inc. was letting rogue pharmacies from overseas target American consumers with advertising, they turned to a convicted con artist with experience pushing pills on the Internet.
That man, David Whitaker, says he became a pill peddler to support his life on the lam — hawking placebos and tiny water vials online that became a hit with bodybuilders searching the Internet for steroids and other drugs. Now serving a prison sentence for fraud, Whitaker says he spends a lot of time thinking about "the people hurt by the pill problem in America."
In an interview with The Associated Press at a private prison in Central Falls, Whitaker, 37, described for the first time how he took up the online pharmacy business while hiding in Guadalajara, Mexico, from a federal indictment for a multimillion dollar fraud case in Rhode Island.
His experience helped federal investigators orchestrate a 2009 undercover sting that resulted in Google forfeiting $500 million last year. The forfeiture allowed Google to avoid criminal prosecution for allegations that it improperly profited from ads promoting Canadian pharmacies that illegally imported drugs into the United States. U.S. Food and Drug Administration investigators found employees helped create advertising on Google's AdWords system for products they were told were manufactured overseas and did not require customers to have a valid prescription, authorities have said.
"It really changed my life working with the agents with the FDA," said Whitaker, wearing beige, prison-issued clothing.
Businesses using AdWords select keywords for advertising. When people search on Google using a business's keyword, that ad may appear next to the search results.
Shipping prescription drugs into the U.S. is illegal, investigators have said. When the forfeiture was announced, Rhode Island U.S. Attorney Peter F. Neronha said had the case gone to trial prosecutors would have had to prove that Google helped pharmacies violate federal law.
The Internet search engine has said it banned the advertising of prescription drugs in the U.S. by Canadian pharmacies and that it should have never allowed the ads. In 2010, Google announced new restrictions for online pharmacies seeking to advertise with AdWords. A company spokeswoman declined to comment on Whitaker's account of the investigation.
Whitaker has posted a written account of the Google probe online and shares details about his jet-setting past, criminal history and bipolar disorder on a website that is maintained by his lawyer.
He also says he saw the Google representatives he was tasked with snaring as "good people," but the operation convinced him Google was creating an "urgent danger."
One Google representative in Mexico, he said, didn't bat an eye after hearing plans about advertising the prescription abortion pill RU-486. Whitaker said he thought the venture would end the investigation.
"I was actually nervous and afraid. My voice would get shaky talking to him," Whitaker said.
He was wrong. Authorities placed an ad for RU-486 including the language "no prescription needed."
Whitaker fled to Mexico in 2006 while being investigated for allegations he defrauded customers of an electronics business, according to an affidavit filed in federal court.
Even though he was accused of being involved in a multimillion dollar-fraud, Whitaker said he still needed cash while on the run.
He said he got the idea to sells drugs online while visiting a farm supply store. The store had a ceramic horse and cow out front and sold steroids inside, Whitaker said.
Whitaker launched a modest enterprise working a few days a week.
Eventually, he said he expanded by hiring a lawyer and doctors. At its peak, the business was grossing $1 million in monthly revenues, said defence attorney Joseph Balliro Jr.
Whitaker credits AdWords with helping the business take off. He recalls talking with a Google representative in Buenos Aires, Argentina, about the anti-aging, bodybuilding and weight-loss products the site was selling.
"She did not hesitate at all and wanted to start advertising it right away," said Whitaker, reading from a written account of his time in Mexico. He said he deposited $30,000 to start.
"Once they know you had the money to spend, they let you advertise," Whitaker said.
As calls came in from bodybuilders wanting muscle-growing drugs, Whitaker said he consulted with doctors working for him and made a major change, developing a placebo targeting bodybuilders. In a more brazen move, Whitaker said he started selling $1,000 millimeter vials of what he marketed as an injectable sterile liquid purporting to offer multiple health benefits, but was actually water.
Whitaker recalled being surprised by the rave reviews from customers.
"I was expecting people to say, 'This stuff doesn't work,'" he said.
Whitaker said he stopped advertising on AdWords after a few months because he didn't want the additional exposure while on the lam. But the experience became invaluable after he was arrested in 2008 and learned he was facing up to 65 years in prison for the fraud case.
Whitaker recalled getting a tepid response when he described his online pharmacy to federal agents, who were aware of his pill shop.
"Agents don't tend to give you reaction," he said. But by early 2009, he was using undercover websites to see whether Google would allow ads for illicit drugs from abroad.
Whitaker said the first site looked like the handiwork of a Mexican drug lord trading in HGH and steroids. But after a few rejections by Google and some advice from a U.S.-based representative on what revisions to make, Whitaker said the ads went live.
"You have to take the drugs off the site," Whitaker quoted the U.S. representative as saying. "We were fine with it because that meant she knew we were selling drugs."
He said investigators spent about $200,000 on Google ads. Aside from ad spending, Whitaker said Google representatives in the U.S. and Mexico were enticed by his claim that he represented a Mexican hotel chain that wanted to advertise.
In total, Whitaker put in about 1,100 hours working over four months on the sting. He was sentenced in December to nearly six years for the fraud charges and faces a Massachusetts case that hasn't been settled, Balliro said.