Retailer CVS Pharmacy Inc. has agreed to pay a $77.6-million settlement, after admitting to unlawfully selling pseudo-ephedrine to criminals who used it to make methampetamine. It's the largest civil penalty under the federal Controlled Substance Act, according to the Drug Enforcement Administration.

As part of the agreement with federal prosecutors, CVS has agreed to pay $75 million in civil penalties and to forfeit $2.6 million in profits the company earned as a result of the illegal conduct.

"CVS's flagrant violation of the law resulted in the company becoming a direct link in the methamphetamine supply chain," said Michele M. Leonhart, the DEA's acting administrator.

CVS Pharmacy, a subsidiary of CVS Caremark Corp., failed to comply with laws limiting sales of pseudo-ephedrine, which allowed criminals to obtain a key ingredient to manufacture meth from CVS stores located primarily in Los Angeles County, Orange County, Calif., and Clark County, Nev.

Between September 2007 and November 2008, CVS supplied large amounts of pseudoephedrine to methamphetamine traffickers in Southern California, and the company's illegal sales led directly to an increase in methamphetamine production in California. CVS eventually changed its sales practices to prevent these illegal sales, but it did so only after it became aware of the government's investigation, according to the DEA.

The $75 million portion of the settlement represents the largest civil penalty ever paid under the Controlled Substances Act.