WSJ: Federal Prisoner Helped U.S. Sting Against Google’s Pharmacy Ads

google-g-logoIt’s been a difficult month for Google, and the company is bound to take another hit in the morning as a Wall Street Journal article makes the rounds — an article that offers new details about the government sting that compelled Google to pay $500 million after acknowledging that it both allowed and helped Canadian pharmacies sell drugs in the U.S. in violation of federal law.

To be clear, the Department of Justice investigation and settlement with Google is a done deal and there’s nothing new happening specific to those legalities. But the WSJ article shines a new light on how the U.S. government used a con man (and currently a convicted felon) in a sting operation against Google in early 2009.

As the WSJ reports, David Whitaker first tipped federal agents to Google’s complicity with his pharmaceutical activities when he was arrested in Mexico in 2008 and sent back to the U.S. to face wire fraud, conspiracy and commercial bribery charges. That case wasn’t directly related to an online pharmacy that he had set up in 2006 — an operation that sold steroids and human growth hormone to U.S. residents and advertised through Google’s AdWords program. Whitaker tells the Journal that Google was aware of what he was doing.

“It was very obvious to Google that my website was not a licensed pharmacy,” Mr. Whitaker wrote to the Journal. “Understanding this, Google provided me with a very generous credit line and allowed me to set my target advertising directly to American consumers.”

Federal prosecutors used Whitaker as their point man in a four-month sting against Google in early 2009. While in custody and being guarded by federal agents, Whitaker used a pseudonym (Jason Corriente) to begin using AdWords to promote a website, www.sportsdrugs.net, that the government had created to sell HGH and steroids.

Google first rejected it, along with an anti-aging website called www.NotGrowingOldEasy.com. But the company’s ad executives worked with Mr. Whitaker to find a way around Google rules, according to prosecutors and Mr. Whitaker’s account.

The undercover team removed a link to buy the drugs directly—instead requiring customers to submit an online request form—and Google approved it. “The site generated a flood of email traffic from customers wanting to buy HGH and steroids,” Mr. Whitaker said.

A quick WHOIS check reveals that notgrowingoldeasy.com is, indeed, registered currently in the name of Whitaker’s fake “Jason Corriente” character.

The sting expanded to include new websites, including one that sold the controversial abortion pill RU-486 — a pill that can only be taken in doctors’ offices. The WSJ reports that Google approved ads for that site, too.

Google’s ad team in Mexico approved the site, so U.S. consumers searching for “RU 486″ would see an ad for the site. Google ad executives allowed the agents to add the phrase “no prescription needed.”

The WSJ article paints a very damning case against Google’s behavior prior to the $500 million settlement with the DOJ.

Kent Walker, Google’s general counsel, gave this statement to the WSJ:

“We ban not just ads but also advertisers who abuse our platform, and we work closely with law enforcement and other government authorities to take action against bad actors.”

In a month that’s already seen Google suffer black eyes for a mess involving Google Chrome sponsored blog posts, along with negative reaction and requests for an FTC investigation related to Google+, and an incident where Google had to apologize to a Kenyan local business directory after trying to poach its customers, the details coming to light in Wednesday’s Wall Street Journal are about the last thing the company needs right now.

There’s more discussion on Techmeme.

Related Topics: Channel: SEM | Google: AdWords | Google: Legal | Legal: Regulation | Top News

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About The Author: is Editor-In-Chief of Search Engine Land. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He recently launched a site dedicated to Google Glass called Glass Almanac and also blogs at Small Business Search Marketing. Matt can be found on Twitter at @MattMcGee and/or on Google Plus. You can read Matt's disclosures on his personal blog.

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  • Pat

    Any chance G was trying to comply with US law, and now, in hindsight, that was their undoing here? Yes, they have a stewardship responsibility, but does a little blame also belong to the high consumer demand -and- to lawmakers for any contortions found in the law? Like horny goat weed, who is to blame… just the guys who makes the display boxes I see in the gas station? I definitely don’t know the laws involved here, just asking if this is a case of “easiest to blame”, rather than “actual culpability”. Given the size of their money machine (and its reliance on good will), it seems a stretch to think they intentionally conspired against US companies, to the benefit of foreign pharmas, for the sake of making a quick, knowingly illicit fractional billion. It seems to me personally, to accept the belief that it even required a sting to stop this, that I’d need to hold a view of them as evil drug pimps. To me, it seems more like a compliance mistake, a bad one, than the govt busted international drug pimps perspective. Maybe I’m a G sheeple.

  • S.V.

    This is a small mistake that google did not do knowingly. The ad approving person is time pressed to complete the job he is assigned.

    For example let someone who wants to market Apple Apps. He posts on minifreelance and pays like $2 to anyone who downloads the app and rates ( 5 star) and reviews it. Minifreelance can not be held responsible for it.

  • cromwellian

    Hmm, a Murdoch owned newspaper releases details of a settlement that was sealed by the court. What are the chances? :)

    Looking at this another way. Americans are barred from buying prescription drugs which are sold much cheaper in other countries, and the US Congress won’t even let Medicare or Medicaid use bulk-negotiating with pharmaceuticals to get volume discounts.

    Which is more evil? Allows ads that connect cash-strapped seniors stuck in coverage donut holes with Canadian companies illegally exporting *legal prescription* drugs to the US. Or, the stupid import bans and congressional interference with attempts to reduce costs?

    The way the media is covering the story, they’re acting like Google was in bed with Mexican drug cartels to sell cocaine.

    Just IMHO.

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