Guaranteed Returns, a Holbrook drug returns company, to close, lay off 109

A Holbrook-based receiver and shipper of old and expired drugs will be closing its doors later this month, laying off 109 workers following years of legal troubles.

Devos LTD, which does business as Guaranteed Returns, will begin laying off its Long Island staff starting on March 15 and wrapping up the layoffs on May 24, according to a state Worker Adjustment and Retraining Notification.

An employee said company officials would have no comment. 

The announcement of the layoffs came after the company was added to a federally maintained list called the List of Excluded Individuals/Entities, which prevents the company from receiving payment from federal health care programs for services they offer. The list is overseen by the Office of the Inspector General for the U.S. Department of Health and Human Services.

Guaranteed Returns is a reverse pharmaceutical distributor, which manages the return of expired or unused drugs for hospitals, nursing homes, the military and other businesses. Employees at the company count, sort and ship unused controlled drugs, such as opioids, morphine and fentanyl.

The unused drugs are sent back to wholesalers and drug manufacturers and in exchange, manufacturers provide customers with cash credits they can use on their next order of medications. Guaranteed Returns charges customers a fee for handling the returns.

In addition to the state filing, the company posted on its website a message from the CEO explaining why it's going out of business.

Guaranteed Returns “has been placed on the HHS OIG exclusion list, effective February 20, 2024,” the company’s president and chief executive, Paul Nick, said in a statement. “This is the result of legal action taken against the company for activities that occurred between 1999 and 2014 and which are not a reflection of the company’s present personnel operations.”

Nick, who joined the firm in 2010 as the company’s controller, took over as CEO in 2014 after the company’s previous executives were charged with fraud by federal investigators.

In 2014, owner and former CEO of Guaranteed Returns Dean Volkes, of Port Jefferson, pleaded not guilty to cheating the government and private companies out of $116 million in a scheme involving pocketing refunds on returned medication.

Charges at the time included conspiracy, obstruction of justice and lying to federal agents.

In 2019, Volkes was sentenced to five years in prison and ordered to pay more than $200 million in forfeiture and restitution.

Victims of the scheme, which affected 13,000 customers, included the Defense Supply Center in Philadelphia, which buys drugs for the armed forces; the federal Department of Veterans Affairs; the District of Columbia Department of Health and the Federal Bureau of Prisons.

Nick said the company had embarked on an effort to plot a different course after the fraud case.

“It has also been a privilege to lead the company and its dedicated employees in the herculean task of rebuilding the company since its indictment over nine years ago,” Nick said in the statement.

WARN, the state Worker Adjustment and Retraining Notification Act, requires that companies with at least 50 full-time employees file a notice of a mass layoff or a closing 90 days in advance.