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Posted on Thu, Mar. 23, 2006

Note to self: Jail phone is tapped

Prior Lake online millionaire accused of trying to arrange a hit in call from behind bars

BY SHANNON PRATHER

Pioneer Press

Christopher William Smith, a high school dropout from Burnsville who rose to riches selling painkillers online, was accused Wednesday of trying to bump off a witness in the federal criminal case against him.

A year ago, the millionaire was enjoying his fortune, living in a $1 million house in Prior Lake and driving luxury cars. His empire crashed in May when federal prosecutors accused Smith of illegally dispensing prescription drugs.

Prosecutors say Smith, who is awaiting trial at the Sherburne County jail, used his phone privileges to arrange a hit on a witness and the witness' family. A federal grand jury indicted Smith on Wednesday on one count of conspiracy to tamper with a witness and one count of endeavoring to obstruct justice.

Smith, now 26, is accused of calling a friend on the outside March 4 and discussing how he could intimidate and possibly kill a prosecution witness

The pair discussed hiring a private detective to photograph the witness' family and ways they could find and track witnesses, according to the complaint filed. Jailers at the Elk River facility recorded the conversations.

"The United States Attorney's Office takes matters of witness intimidation very seriously," said U.S. Attorney Rachel Paulose in a news release. "Any person who threatens a government official will be prosecuted to the fullest extent of the law."

Prosecutors did not identify the witness or Smith's friend, whom they called an unindicted co-conspirator. Smith's attorney Joe Friedberg declined to comment.

Smith built his pharmacy by setting up a series of Internet sites and telemarketing call centers in Minnesota, Canada and the Dominican Republic. The operation sold high volumes of prescription drugs.

As the business grew, Smith hired an attorney, an accountant and others to help run the expanding Web empire. Smith eventually hired a New Jersey doctor to authorize more than 70,000 prescriptions over the Internet.

Smith used spam e-mail to market his business, attracting customers from around the world. His operations, including Burnsville-based Xpress Pharmacy Direct, netted more than $20 million from 2004 to 2005.

Meanwhile, Smith was living the high life. According to court proceedings, he had a wife and girlfriend, and bought a $1.1 million estate, BMWs, Hummers, a Ferrari, a Jaguar and a Lamborghini.

Federal authorities shut down Xpress Pharmacy Direct and confiscated Smith's cars, house and case in May. Authorities say Smith then traveled to the Dominican Republic and tried to rebuild his online pharmacy outside of U.S. jurisdiction.

In August, Smith and several business associates were indicted on charges of continuing criminal enterprise, conspiracy to distribute and dispense controlled substances, wire fraud, misbranding drugs and conspiracy to commit money laundering. Smith posted bail but was sent back to jail in September for violating the terms of his release.

Prosecutors alleged Smith imported drugs from foreign counties and dispensed them to customers without the proper doctor's approval. Smith contracted with and misled small, independent pharmacies to fill prescriptions, according to the indictment.

Smith also is accused of charging customers' credit cards multiple times without delivering the drug and shipping a drug that was not the medicine purchased.

If convicted on the witness tampering charge, Smith faces a maximum of life in prison and $250,000 fine. His trial on the charges in the August indictment is scheduled to begin in October.

Shannon Prather can be reached at sprather@pioneerpress.com or 651-228-5452.