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14 indicted in connection with 2012 nationwide fungal meningitis outbreak

Friday, December 19, 2014

The Justice Department unsealed a 131-count criminal indictment in Boston in connection with the 2012 nationwide fungal meningitis outbreak. Barry J. Cadden, owner and head pharmacist of New England Compounding Center (NECC), and NECC’s supervisory pharmacist Glenn A. Chin were charged with 25 acts of second-degree murder in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia.   

The outbreak was caused by contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, located in Framingham, Mass. The U.S. Centers for Disease Control and Prevention (CDC) reported 751 patients in 20 states were diagnosed with a fungal infection after receiving injections of NECC’s MPA. Of those 751 patients, the CDC reported 64 patients in nine states died. 

Twelve other individuals, all associated with NECC—six other pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, two of NECC’s owners and one other individual—were charged with additional crimes including racketeering, mail fraud, conspiracy, contempt, structuring and violations of the Food, Drug and Cosmetic Act.

“As alleged in the indictment, these employees knew they were producing their medication in an unsafe manner and in insanitary conditions, and authorized it to be shipped out anyway, with fatal results,” said Attorney General Eric Holder. “With the indictment and these arrests, the Department of Justice is taking decisive action to hold these individuals accountable for their alleged participation in grievous wrongdoing. Actions like the ones alleged in this case display not only a reckless disregard for health and safety regulations, but also an extreme and appalling indifference to human life.”

“Those who produce and sell the drugs that we take have a special responsibility to make sure that they prepare those drugs under suitable conditions, and that what leaves their facilities is safe,” said Acting Assistant Attorney General Joyce R. Branda for the Justice Department’s Civil Division. “The indictment charges that the defendants’ conduct in this case was corrupt and carried out with a complete disregard to the public’s health. The department’s Consumer Protection Branch along with our law enforcement partners is steadfast in our commitment to use every criminal and civil tool at our disposal to hold accountable those who are willing to put our lives at risk in the reckless pursuit of their profits.”

The 14 individuals charged in the indictment are Barry J. Cadden, Glenn A. Chin, Gene Svirskiy, Christopher M. Leary, Joseph M. Evanosky, Scott M. Connolly, Sharon P. Carter, Alla V. Stepanets, Gregory A. Conigliaro, Robert A. Ronzio, Kathy Chin, Michelle Thomas, Carla Conigliaro and Douglas A. Conigliaro.  

The 25 second-degree murders are included in the indictment as predicate racketeering acts under the Racketeer Influenced and Corrupt Organizations Act (RICO).  These charges relate to patients who received NECC MPA and died in Florida, Indiana, Maryland, Michigan, North Carolina, Tennessee and Virginia. As a general matter, and depending on particular state law, second-degree murder does not require the government to prove Cadden and Chin had specific intent to kill the 25 patients, but rather that Cadden and Chin acted with extreme indifference to human life. 

According to the indictment, Cadden and Chin knew NECC was making MPA in a manner and in an environment in which they could not assure the drug was sterile as it was identified to be. Despite knowing they were making the MPA in an unsafe manner and in insanitary conditions, Cadden and Chin nonetheless allegedly directed and authorized the shipping of MPA to NECC customers nationwide. It is alleged that Cadden and Chin were aware doctors would inject MPA into their patients’ bodies and that, if the MPA was not in fact sterile, it could kill them. 

The 25 murder racketeering acts comprise only a portion of the broad racketeering scheme charged in the indictment. The indictment also alleges that NECC’s other pharmacists knowingly made and sold numerous drugs in a similar unsafe manner and in insanitary conditions. The unsafe manner alleged in the indictment includes, among other things, the pharmacists’ failure to properly sterilize NECC’s drugs, failure to properly test NECC’s drugs for sterility and failure to wait for test results before sending the drugs to customers. 

The insanitary conditions alleged in the indictment include, among other things, NECC’s lack of proper cleaning and NECC’s failure to take any action when its own environmental monitoring repeatedly detected mold and bacteria within NECC’s clean room suite of rooms throughout 2012. 

It is further alleged that NECC repeatedly took steps to shield its operations from regulatory oversight by the FDA by claiming to be a pharmacy dispensing drugs pursuant to valid, patient-specific prescriptions. In fact, NECC routinely dispensed drugs in bulk without valid prescriptions. The indictment alleges that NECC even used fictional and celebrity names on fake prescriptions to dispense drugs. 

Finally, the indictment charges Carla Conigliaro, the majority shareholder of NECC, and her husband Douglas Conigliaro with transferring assets following the fungal meningitis outbreak.  Specifically, the indictment charges that after NECC declared bankruptcy, and the bankruptcy court ordered the shareholders not to transfer assets, Carla and Doug Conigliaro transferred approximately $33.3 million to eight different bank accounts opened after the NECC bankruptcy. 

Cadden and Chin face a maximum of up to life in prison if convicted on all counts. 

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