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TIMEFRAME: Beginning around the issuance of the Arent Fox June 5 2002 letter
to general counsel Mel Hewitt and Darren Traub 1
2002
4/24/2002: [ARENT FOX INTERNAL EMAIL]
¾ “devise strategy” and “write‐up format” for state laws/regulations
4/24/2002: [ARENT FOX INTERNAL EMAIL]
¾ Reveal lawyers discussed and considered “risk”
¾ opted to allow us to continue [“the level of risk the company faces and
should any action be taken other than waiting”]
04/25/2002: [ARENT FOX INTERNAL MEMO]
¾ Extensive revising of the “Patient Responsibility Statement” and “Informed
Consent” utilized in every transaction.
05/14/2002: [ARENT FOX INTERNAL EMAIL]
¾ “Relative statutory and regulatory language” provided in “HIGH, MEDIUM,
or LOW RISK scale”
05/22/2002: [PARKER & ARENT FOX]
¾ Conference call with Buddy Parker
05/22/2002: [PARKER]
¾ Parker instructs Arent Fox during a conference call they can “assist in future
endeavors” but “clear matters with him”
05/28/2002: [ARENT FOX INTERNAL EMAIL]
¾ Reiterates advice provided to Buddy Parker
1
Government used as an Exhibit in their last motion]
Page 1 of 7
06/20/2002: [ARENT FOX EMAIL TO ESCRIPTS GENERAL COUNSEL]
¾ “strongly recommend eScripts discontinue doing business in Nevada”
(immediately complied)
07/02/2002: [ESCRIPTS GENERAL COUNSEL MEMO]
¾ Arent Fox phone call with general counsel Traub reveals no references to
an illegal business or stopping the business. They do request final written
proposal on new business model so they can “bless it”
08/2002: [SEYFARTH SHAW] INVOICE # 810467
¾ Research sales tax requirements for prescription pharmaceutical sales and
income tax filing requirements
¾ Prepares memo on sales tax on pharmaceuticals in specific states
08/23/2002: [ESCRIPTS GENERAL COUNSEL TRAUB TO PARKER, GILLEN, &
FROELICH]
¾ Traub informs Parker, Gillen, and Froelich via letter a statement he issued
to Marietta Daily Journal that stated “eScripts complied to with all State
and Federal laws.”
09/09/2002: [KILPATRICK STOCKTON ‐ BERTSCHI]
¾ criminal attorney Buddy Parker is on record stating that he believed
“nothing would come of the criminal investigation” 2
11/2002: [KILPATRICK STOCKTON] INVOICE # 10592172
¾ Review and discussions with Buddy Parker regarding Marietta Daily Journal
article
11/2002: [SEYFARTH SHAW] INVOICE # 826794
2
IMPORTANT: this was approx three months after receiving the letter from Arent Fox of the “real risk of
enforcement” a conference call with Arent Fox
Page 2 of 7
¾ Cunningham conducts live training for accepting orders via phone
¾ Cunningham conference call with Arent Fox attorneys to discuss accepting
orders via phone
¾ Works from our office
¾ Deliver Arent Fox internet medical law state surveys to Traub
¾ Cunningham assist in prepared statement for press
¾ Conference call with Arent Fox about compliance related issues
12/2/2002: [PARKER]
¾ Parker informs an attorney for a competitor that “I told him the issue was
not you, but whether the doctors were lawfully practicing medicine”
2003
01/15/2003: PHARMACY BAGGAGE LANGUAGE (APPROVED BY ARENT FOX)
¾ IMPORTANT: READ THIS: BY OPENING THIS PACKAGE, YOU INDICATE
THAT YOU HAVE READ THE CUSTOMER RESPONSIBILITY STATEMENT
AND THE INFORMED CONSENT AGREEMENT, HAVE ACCEPTED THE
TERMS AND CONDITIONS THEREIN, UNDERSTAND THAT THEY ARE
LEGALLY BINDING ON YOU, AND HAVE TRUTHFULLY COMPLETED THE
MEDICAL QUESTIONNAIRE. IF YOU DO NOT AGREE WITH THE ABOVE
RESPONSIBILITY STATEMENT – PLEASE CONTACT OUR CUSTOMER
CARE REPRESENTATIVES TO RETURN THIS PACKAGE
¾ Good reason to believe this was not presented to the Grand Jury
01/13/2003: GENERAL COUNSEL TRAUB TO PARKER
¾ Letter referencing a subpoena by a pharmacy who had contracted with us
in relation to a order that was denied by a physician based upon a
customer’s BMI (body mass index)
01/30/2003: [KILPATRICK STOCKTON] INVOICE # 10592172
¾ Co defendant Sobert approves and issues check for $3,991.59
02/26/2003: FAX SENT TO BUDDY PARKER AT GILLEN, PARKER, & WITHERS
Page 3 of 7
¾ Referencing this provision in the Informed Consent: “e‐Scripts will take
reasonable steps to insure that its Participating/ Providers and affiliate‐
pharmacies comply with any applicable laws or regulations imposed by
state or federal government.”
02/27/2003: DRUG MANUFACTURE REBATES
¾ Letters from LRA Marketing for Amide Pharmaceuticals
03/06/2003 : [TRAUB]
¾ [PROVIDES LEGAL DESCRIPTION OF BUSINESS] 3
¾ Terminology provided by general counsel and forwarded to Parker and
Arent Fox
06/10/2003: [ARENT FOX] INVOICE #915241
¾ Review and provided updates to the affiliate marketing legal agreements
06/17/2003: [ARENT FOX]
¾ “this is how the staff responds to questions or concerns about the
medication.”
3
Virtual Wellness Network, Inc. (“VWN”) is a management service organization that has service contracts with
VWN eMedical Group, LLC, which has contacts with U.S. licensed physicians, VWN ePharmacies, LLC,
which has contacts with U.S. licensed pharmacies, and Customer Care Solutions, an all inclusive call center. VWN
offers use of all of these services to e‐Scripts.MD, LLC. E‐Scripts, through its proprietary website, www.escripts‐
md.com, assists on‐line patients find licensed U.S. physicians to review a physician‐prepared medical questionnaire
form in order to obtain a prescription for certain “lifestyle choice pharmaceuticals.” When a customer accesses e
Scripts’ website, the customer is able to review Information related to the different pharmaceuticals offered via
the website. The customer then fills out an online medical history and application. This information is sent, via the
internet, directly to a U.S. licensed physician. Any prescription is written pursuant to the physician’s professional
medical opinion and is then prepared, recorded, filled, and shipped by a U.S. licensed pharmacy. If, in the
physician’s sole medical opinion such prescription is inappropriate for the requesting patient, the physician is free
to decline the requested medication.
Nowhere in the process does any employee of E‐Scripts, or any other nonmedical personnel, assist in the
determination of whether a patient should receive any medication or actually prepare or ship the medication. Such
decisions are left exclusively to the doctor and the pharmacy. E‐Scripts does, however, assist in protecting against
fraudulent requests by following a series of internal safeguards. Each E‐Scripts.MD customer must warrant as
follows: that all personal information provided is complete, true, and accurate; that he or she is over the age of 21;
that he or she has received a recent physical examination by his or her own primary care physician; and that, upon
receipt of any medication, he or she will promptly update his or her primary care physician with respect to such
medication. In order to advertise its website, e‐Scripts utilizes a national affiliate program. Under this program,
each affiliate, of which there are currently over 2000, is assigned a referral number. Every time a customer orders
from e‐Scripts under the affiliate’s referral number, that affiliate is sent a certain percentage of the order. E‐Scripts
is the only company in the industry to offer a full‐time affiliate department,
including
Page 4 of 7
¾ Discussed affiliate related issues
07/28/2003: [KILPATRICK STOCKTON] INVOICE #10637299
¾ Review Drug manufactures and pharmacy rebates
¾ Review procedures in accepting orders via telephone
¾ Codefendant Sobert approved and issued check for legal services $6,043.50
07/30/2003: [ARENT FOX]
¾ review Informed Consent
08‐14‐2003: [Co‐defendants Sobert and Riggins]
¾ Approve payment for legal services and dually execute a check to Arent Fox
for INVOICE #915241
¾ check for legal services Arent Fox $12,549.70
08/29/2003: [SEYFARTH SHAW] INVOICE # 895509
¾ Conference call with eScripts principals regarding Operating Agreement
09/11/2003: [ARENT FOX] INVOICE #918889
¾ Legal services approved by co‐defendant Sobert and payment issued for
$6,582.50
09/15/2003: [SEYFARTH SHAW] INVOICE #902820
¾ Legal services which included revised Operating Agreement and MEMO to
CPA Verner for $1,365.00
11/13/2003: [ARENT FOX] INVOICE #923882
¾ Legal services approved and payment issued for $3,081.00
10/20/2003: [PARKER] INVOICE #918889
“reiterate e‐Scripts.MD's continued commitment to lawful and ethical
business practices” “As an affiliate of e‐Scripts‐MD, you can rest assure that
we will continue to remain in compliance and keep up with the ever
changing regulations. We are constantly working with our outstanding
team of legal experts to ensure and protect our position in the industry and,
most important, our plans for the future.”
Page 5 of 7
“We, on the other hand, have always taken a safe approach in our business
decisions.”
10/23/2003: [ARENT FOX] INVOICE #927356
¾ Legal services provided and check #12133 for $403.00
11/06/2003: [PARKER]
¾ “As you are well aware, we have always worked closely with our attorneys
regarding the legalities of this industry. Due to the recent policy enacted by
the U.S. Drug Enforcement Agency concerning customers obtaining
prescriptions based solely on an online medical questionnaire, we have
decided to discontinue access submit such request.”
11/17/2003: [PARKER]
¾ “You cannot state “….still derive profits from this type of illegal activity.”
The activity has not, I repeat not been found to be “illegal” per se.”
2004
02/11/2004: [KILPATRICK STOCKTON] INVOICE #10679366
2008
02/21/2008: [SAMUEL INTERVIEW PARKER]
¾ “Buddy says that everybody realized the regulatory issues, but nobody
thought it was a federal crime of drug dealing.”
02/23/2008: [SAMUEL INTERVIEW PARKER AND HEWITT]:
¾ Buddy and Mel Hewitt are prepared to say that they received all, or most of
the correspondence from Arent Fox
03/03/2008: [SAMUEL INTERVIEW TRAUB]
¾ He knew what the company did and did not think it was illegal but that was
why we hired Buddy Parker and Arent Fox
Page 6 of 7
¾ Never assumed it was illegal
¾ read the letter fro Arent Fox, at best it’s a gray area
¾ Never saw a document that said it was illegal
ATTORNEY’S ACTS DISCREDITS, CONTRADICTS,
STOUFFLET’S BELIEF OF ENFORCEMENT AND RECONFIRMS BELIEF IS COMPLAINT
1) The law firm of Arent Fox continued to provide compliance related legal
advice for the next 15 months (until “WE” voluntarily closed the business)
2) Kilpatrick Stockton, Seyfarth Shaw, Mel Hewitt, Darren Traub, all continued
to provide compliance related legal advice.
3) At no time did any attorney withdraw from providing us representation
because it posed a risk criminal sanctions.
4) If Arent Fox’s letter was misinterpreted, they are required to provide us in
“clear and unmistakable language” what action we were to take
5) General counsel (In house) legal counsel Hewitt and Traub is on record
stating that they had no knowledge or was ever told by Arent Fox or
Kilpatrick Stockton that the business was “illegal.”
Page 7 of 7