An investigation into a theft from the Defense Supply Center in Northeast Philadelphia uncovered a massive scheme to defraud more than $180 million from the world's largest drug companies, dozens of hospitals, the Veterans Administration, and the Department of Defense.

A federal jury in Philadelphia on Wednesday found Devos LTD, a  government contractor that processed pharmaceutical returns, guilty of 64 counts that included fraud, money laundering, and obstruction over 11 years.

Devos, a "reverse distributor" also known as Guaranteed Returns, served as an outsourced returns department for big pharma.

A self-described industry pioneer, Guaranteed Returns managed expired and unusable drugs from hundreds of hospitals. The Long Island-based firm collected, sorted, and shipped the medicines back to the original manufacturers, processed the refunds, then apportioned cash or credit to its client hospitals.

The idea is to streamline the returns process, and the reverse distributor receives a commission on the amount refunded. The drug companies later destroy the unusable pharmaceuticals.

Dean Volkes, 54, of Port Jefferson, N.Y., owns Devos and serves as CEO. Volkes was found guilty of 58 counts of the superseding indictment. His sister, Donna Fallon, 53, who served as the company's CFO, was found guilty of obstruction and mail fraud. Calls to Volkes, Fallon, and their lawyers were not immediately returned.

Guaranteed Returns processes returned drugs in bulk, grouping all of the hospital returns into single packages. It then forwards the returns to the appropriate drug company.

As part of its scheme, Guaranteed Returns collected the refunds, but then included itself as an institution that deserved to receive a payout. To any hospital that reviewed the invoices, the scheme rendered Guaranteed Returns' share invisible since no one institution knew what another had received, according to court documents.

The case arose during an investigation of an employee theft at the Defense Supply Center, which had had a contract with Devos LLC. When a grand jury issued a subpoena for records to Guaranteed Returns, an agent became suspicious when the company made excuses and didn't hand over relevant information.

Testimony at trial showed that in reponse to the grand jury's request, Volkes ordered his employees at the company's Holbrook, N.Y., headquarters to delete data and Donna Fallon concealed hard drives. The drives were later discovered hidden inside a piece of locked office furniture.