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Crime & Courts

Safeway to pay $3M for drug theft reporting problems first detected in Wasilla

  • Author: Zaz Hollander
  • Updated: July 19, 2017
  • Published July 19, 2017

WASILLA — Safeway Inc. will pay a $3 million settlement for failing to report the theft of drugs, including opioids, in a case that began with the Carrs grocery store in Wasilla.

The company on Tuesday signed the civil settlement with the U.S. Attorney's Office for the Western District of Washington in Seattle, as well as a memorandum of agreement with the U.S. Drug Enforcement Administration.

The settlement centers on compliance with record-keeping and reporting requirements from 2009 through May 2014 but not ongoing violations.

Authorities across the U.S., including in Alaska, are battling the availability of prescription painkillers on the streets as part of a drug abuse epidemic. Opioids, like prescription painkillers and heroin, were involved in more than 33,000 deaths across the country in 2015, according to the Centers for Disease Control and Prevention.

Seattle-based DEA Special Agent Jodie Underwood called the kind of reporting delays discovered at Safeway "alarming."

"The untimely reporting of significant losses — it can thwart our investigative efforts, as well as it's highly likely the distribution and consumption of those substances have already occurred," Underwood said. "We're in the middle of an opioid crisis … it's critical that everyone that's involved in the supply and distribution chain do their part."

Along with the penalty, Safeway agreed to close a pharmacy in Belmont, California, and suspend filling prescriptions for controlled substances at a North Bend, Washington, store for at least four months.

There don't appear to be any specific sanctions, however, against the Wasilla store where the case originated.

The DEA agreement shows that a Seattle-based investigator first contacted Safeway in April 2014 after the company reported the loss of more than 12,200 hydrocodone tablets from the Wasilla Carrs pharmacy.

The investigator learned the loss had been discovered months earlier, in October 2013, but not immediately reported, according to the document. Instead, the company initiated an internal investigation into an employee for suspected theft, but the employee quit.

Federal law requires "timely written notice of thefts of significant losses" of controlled substances within 24 hours.

The DEA issued a subpoena for records dating back to 2009 and met with Safeway representatives in December 2015 to discuss concerns about the evidence that resulted, highlighting five stores in particular, the DEA document says.

Along with Wasilla, stores referenced in the documents include the one in North Bend — where the loss of more than 70,000 hydrocodone tablets went unreported for at least six months — and in Belmont.

Investigators discovered Safeway prioritized internal investigations and instructed pharmacists to report losses internally and not to the DEA, according to the agreement. Safeway changed its policies and practices on loss and theft reporting after the DEA began investigating the company in May 2014.

Under the settlement, Safeway agreed to surrender its federal controlled substance registration at Belmont by the end of this month. The company also agreed to suspension up to six months of the North Bend store's authority to dispense controlled substances, starting in September.

Safeway Inc. operated 1,335 stores before it merged with Albertsons Companies in January 2015.

Safeway cooperated fully with investigators and since early 2015 "has significantly enhanced its controlled substance monitoring program and
implemented a variety of improved policies and procedures to enforce compliance with the Controlled Substances Act," according to a statement from Albertsons.

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