Saturday, February 17, 2018

Judge Stands Corrected on Chin Racketeering

By Walter F. Roche Jr,

Stating that he "misspoke" during a recent sentencing session, a federal judge has issued an unusual correction acknowledging that he was wrong by a year in describing the date a criminal racketeering enterprise got underway.
The statement was entered into the record Friday by U.S. District Richard G. Stearns in the case of Glenn Chin, who already has been sentenced to an eight-year prison term for his role in the 2012 fungal meningitis outbreak. The jury found Chin guilty of multiple racketeering and mail fraud charges.
"I misspoke when I said that the racketeering enterprise in question began in March of 2011," Stearns wrote, adding that he meant to say March of 2010, the same date set in the closely related case of co-defendant Barry J. Cadden.
Stearns said federal prosecutors were correct in stating that jurors found the earliest racketeering act in both the Cadden and Chin cases was a fraudulent mailing dated March 25, 2010.
Meanwhile sparring between prosecutors and Chin's lawyers continued following last week's hearing on forfeiture and restitution motions filed by Assistant U.S. Attorneys George Varghese and Amanda Strachan.
The prosecutors stated that Chin's lawyer, Stephen J. Weymouth was "categorically wrong" when he charged that prosecutors "misstated the truth" in the hearing last week regarding Chin's role in the bankruptcy of the drug compounding company that caused the fungal meningitis outbreak that took the lives of at least 76 patients.
In the three-page filing prosecutors charged that Chin "spent $698,163 of his own money in the past 16 months" without disclosing existence of the money from a retirement fund in disclosures to to federal officials.
They stated that Chin was not part of a related bankruptcy settlement and did not contribute to a fund set up to benefit victims of the 2012 deadly outbreak.
According to prosecutors Chin spent the money on a new Toyota, paying off a mortgage and the purchase of two vacation timeshares.
"Chin lavishly spent his newly found retirement account while never disclosing the money to the court and accepting the services of CJA (court appointed) counsel.
The filing concludes by charging it was "a misstatement of the truth" when Chin told the court he couldn't afford any restitution.
The charges were contained in a filing following following Thursday's hearing on the government motions to force Chin to pay a total of $82.6 million in forfeiture and restitution. Stearns took the motions under advisement.
Chin is scheduled to begin serving his sentence in March. Cadden, who was convicted of similar charges, already has begun serving a nine-year sentence.

Full docket text for document 1433:
Judge Richard G. Stearns: ELECTRONIC ORDER entered as to Glenn A. Chin. In anticipation of today's hearing the court notes a correction from the sentencing hearing. I misspoke when I said that the racketeering enterprise in question began in March of 2011. The government is correct, Gov't Reply at 4 (Dkt # 1430) that I meant to say March of 2010 (consistent with the analysis in the sentencing of co-defendant Barry Cadden). A RICO enterprise is defined by a minimum of two related predicate acts occurring within ten years of one another. Here, in Chin's case, as in the Cadden trial, the earliest predicate act found by the jury is the fraudulent mailing of March 25, 2010 (Predicate Act 69). All parties agree that the enterprise endured until the shuttering of NECC in October of 2012. So stated, /s/ Richard G. Stearns. (RGS, law2)

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Thursday, February 15, 2018

Judge Defers Decsion on Chin Motions

By Walter F. Roche Jr.

A federal judge today took under advisement competing motions on the amount a pharmacist should pay for forfeiture and restitution following his conviction on racketeering and mail fraud charges.
U.S. District Judge Richard G. Stearns, sitting in Boston, Mass., heard arguments for and against restitution and forfeiture orders with a combined value of $82.6 million in the case of Glenn Chin who is scheduled to begin serving an eight year prison sentence in March.
Chin was one of 14 indicted following a two year probe of the deadly 2012 fungal meningitis outbreak caused by fungus riddled drugs produced under Chin's supervision at a now defunct drug compounding company. At least 76 patients died after being injected with the contaminated steroids.
The $611,000 in forfeiture and an $82 million restitution order were proposed by federal prosecutors. Chin has asked that both be either vastly reduced if not eliminated entirely.
In a related development Chin's lawyers asked Stearns to amend a recommendation made to the federal Bureau of Prisons on where Chin should serve his sentence
Stephen J. Weymouth said in a filing that he had learned that a treatment program for Chin's admitted alcohol problem was not available at the prison at Fort Devens in Massachusetts that Stearns, at Chin's request, had recommended.
Weymouth told the judge that the needed treatment program was available at the federal prison in Danbury, Conn. and asked that he amend his recommendation accordingly.
At the hearing federal prosecutors charged that cases cited by Chin's lawyers to reduce or eliminate the forfeiture do not apply to the crimes for which he was convicted.
Chin's lawyers, meanwhile, cited decisions Stearns already has made in the parallel case of Barry Cadden, who headed the drug company that employed Chin. Cadden is already serving a nine-year sentence following his conviction on similar charges.
In Cadden's case, Stearns has delayed action on a restitution order pending an appeal. Chin has asked that a restitution decision in his case be delayed to the same date. Stearns has approved a $7.5 million forfeiture order against Cadden and federal officials have already initiated steps to seize property from Cadden to collect on that amount.

Tuesday, February 13, 2018

Chin Fights Restitution and Forfeiture

By Walter F. Roche Jr.

The pharmacist convicted of racketeering and mail fraud for his role in a deadly 2012 outbreak is asking a federal judge to vastly reduce or eliminate government proposed restitution and forfeiture orders totaling some $82.6 million.
In separate filings in U.S. District Court in Boston, Mass. the lawyer for Glenn A. Chin argued that a  forfeiture order of $611,000 and a restitution order for $82 million sought by federal prosecutors were not justified.
Citing rulings already made in his case and that of co-defendant Barry J. Cadden, Chin's lawyer Stephen J. Weymouth, said any forfeiture order should be based on a two year period, not the six years proposed by the U.S. Attorney.
"The government failed to prove that 100 per cent of Mr. Chin's compensation was derived from racketeering activity," the 14-page motion states. The government proposal was based on the total compensation paid to Chin from 2006 to 2012.
Chin was convicted of the racketeering and mail fraud charges stemming from a grand jury probe of the 2012 fungal meningitis outbreak that sickened at least 778 patients killing 76 of them. Chin was a supervising pharmacist at the New England Compounding Center, the company blamed for the outbreak.
Chin argued that "the vast majority" of the drugs produced at NECC during Chin's tenure were not defective and caused no harm to medical providers or their patients.
Noting that U.S. District Judge Richard G. Stearns already has ruled that only $1.4 million worth of drugs produced by NECC were proven to be tainted, the motion states that any forfeiture should be limited to that total and not the $59.8 million in NECC's gross receipts.
The same percentage, 2.34 per cent should be applied to Chin's salary during that period, the motion adds, also arguing that the forfeiture should be limited to the actual amount Chin received after taxes were deducted.
The motion states that the $611,000 government forfeiture proposal would be "vastly disproportionate to the gravity of the defendant's offense.
Chin's motion recommends a forfeiture of $5,766.
In a separate motion, Weymouth said that the prosecution's proposal for an $82 million restitution order was based on the assumption that the victims included patients injected with the tainted drugs. However, he noted that under the racketeering law, Stearns already has ruled that the victims were the medical providers who bought contaminated drugs from NECC and not their patients.
"The government produced no evidence of a causal link between any particular conduct of Mr. Chin that caused the deadly fungus to grow," the filing states.
He also argued that because there were so many victims and the issues so complex it would be impossible to compute the precise amount of restitution,
Noting that Chin is 49-years-old, has two dependent children and has no likelihood of being able to return to his profession, the motion requests that if a restitution order is issued it should be limited to "nominal periodic payments."
Chin has already been sentenced to an eight year jail term, while Cadden is already serving a nine-year sentence.

Wednesday, February 7, 2018

Some Meningitis Claims Dismissed

By Walter F. Roche Jr.

Some but not all of the claims filed against a Maryland clinic by survivors of a woman who died in the 2012 fungal meningitis outbreak have been dismissed by a federal judge in Boston, Mass.
In a five-page ruling issued this week, U.S. District Judge Rya Zobel wrote that the remaining charges, including some negligence claims and violations of Maryland's consumer protection statutes will have to be decided by a jury.
The suit, one of the few remaining to be resolved, was filed by survivors of Brenda Lee Rozek who died on Sept. 16, 2012, 16 days after she was injected with  a fungus laden spinal steroid at the Box Hill Surgery Center in Abingdon, Md.
Rozek's death was one of the 25 cited in the indictment of owners and employees of the now defunct New England Compounding Center, the Massachusetts company that sold the contaminated drugs to the Maryland clinic. Though federal prosecutors charged that Rozek's death and 24 others amounted to second degree murder, two separate juries have rejected that claim.
In her ruling Zobel dismissed claims in the Rozek suit that the clinic and Dr. Ritu Bhambani violated provisions of the Massachusetts consumer protection statutes. She noted that all the major events in the case took place in Maryland.
She also dismissed claims for punitive damages noting that the plaintiffs had conceded they had no evidence that Bhambani had acted with malice.
"Because plaintiffs stipulated that there is no evidence of actual malice in this case, they may not recover punitive damages," the ruling states.
She said issues such as whether the clinic should have exercised due diligence in checking on the company selling the drugs. She said other issues such as a claim for medical expenses would be decided at a later date.
Several hundred victims of the 2012 outbreak have filed suits against the medical providers who injected them with tainted steroids. Dozens of those cases have been resolved. Some 76 patients died in the outbreak while more than 750 were sickened.

Friday, February 2, 2018

Judge Recommends Chin's Placement at Mass. Prison

By Walter F. Roche Jr.

The judge who presided over the trial of Glenn Chin has recommended that the former pharmacist serve his recently imposed eight year sentence at a federal prison just a short drive from his Massachusetts home.
U.S. District Judge Richard G. Stearns today recommended Chin serve his sentence at the federal prison at Fort Devens, Mass. Chin lives in Canton, Mass. about an hour's drive from the prison.
Chin's lawyer had asked Stearns on Wednesday to make the recommendation following the judge's decision to impose the eight year sentence. The recommendation goes to the federal Bureau of Prisons, the agency Chin has been ordered to report to on March 14.
Chin was convicted last year on charges stemming from the probe of a 2012 fungal meningitis outbreak caused by fungus laden drugs prepared in a clean room Chin supervised. He was convicted last year on charges of racketeering, conspiracy, mail fraud and violations of the Food Drug and Cosmetic Act.
Co-defendant Barry Cadden had also asked for placement at Fort Devens, but he is serving his nine year sentence in western Pennsylvania.
Cadden was president and part owner of the New England Compounding Center, the company that sold the drugs that caused the outbreak. Nearly 800 patients were sickened and 76 of them died during the outbreak. Chin was a supervising pharmacist at the now defunct NECC.

Wednesday, January 31, 2018

Chin Gets 8 Year Sentence in NECC Case

By Walter F. Roche Jr.

Boston, Mass. --Stating that the law did not allow him to set a stiffer sentence based on the testimony of victims, a federal judge has given a former pharmacist an eight-year prison sentence for his role in a deadly fungal meningitis outbreak.
U.S. District Judge Richard G. Stearns imposed the sentence today on 49-year-old Glenn A. Chin, who was a supervising pharmacist at the now defunct New England Compounding Center, the company that shipped fungus laden steroids to dozens of health facilities across the country in 2012.
The resulting outbreak sickened at least 793 patients, killing 76 of them.
Stearns rejected the recommendation of prosecutors who had asked that Chin get a 35-year prison sentence. Chin's sentence is one year less than the one Stearns imposed on Chin's boss at NECC, Barry J. Cadden. Cadden has already begun serving that nine year sentence at a federal prison in Pennsylvania.
Stearns, who cited the dereliction of government regulators in failing to act against NECC, said that despite the testimony of victims and survivors of victims, he could only consider the health care providers who bought NECC's products as victims.
"The enhancements do not apply," Stearns said. ""It's not that a judge couldn't do it. I've never done it before and I'm not going to do it in this case."
Prior to his ruling victims and survivors, including Colette Rybinski of Tennessee testified about the suffering and deaths that resulted when patients were injected with steroids laden with deadly fungi.
Rybinski described the suffering of her late husband Tom, who was the first victim of the outbreak to be identified following his injection with contaminated methylprednisolone acetate at a Nashville clinic.
She asked Stearns to impose "the maximum sentence possible" to keep the tragedy "from ever happening again."
Just prior to the sentencing Chin told the judge he was "truly sorry" and, repeatedly broke down in tears, saying he has been praying every day for the living victims to fully recover and "stay healthy."
Stearns later said he was convinced Chin was "truly remorseful."
Chin was convicted in October on racketeering, conspiracy, mail fraud charges and violations of the Food Drug and Cosmetic Act. The jury failed to convict him on 25 counts of second degree murder. Cadden was cleared on those same murder charges, but convicted on parallel racketeering and mail fraud charges.
In the hearing today before imposing the sentence Assistant U.S. Attorney Amanda Strachan said the 35-year sentence was necessary to send a message to drug compounders across the country. She said lobbyists for the industry were lobbying for easements in regulation "despite the outbreak."
Chin, she said, in his role as a supervising pharmacist, ordered his subordinates to hide evidence of violations even as federal regulators poured into the Framingham, Mass. facility following the outbreak.
She said he ordered workers to put trash cans over cracks in the floor of the so-called clean room where sterile drugs were being prepared and lied to investigators from the U.S. Food and Drug Administration "when people were dying. That's how we know his intent."
She said Chin also never disclosed to federal investigators that he had $636,000 in a retirement account. Instead, she said, he used the money to buy a new sport utility vehicle for $47,500.
Chin's attorney Stephen Weymouth urged Stearns to follow the same logic he had used in setting Cadden's sentence last year.
Acknowledging that his client did "not step up and he did not quit," Weymouth said Chin's ethnic background made it impossible for him to stand up to Cadden and question unsanitary conditions at NECC.
"I don't expect anyone to feel sorry for Glenn Chin." Weymouth concluded. "There is no way of explaining away what happened."
Weymouth had recommended that Stearns impose a 37 month prison sentence.
He also cited his client's longtime involvement in a youth sports group and his record as a "a good pharmacist" before joining NECC.
A key element in setting the sentence was the economic loss that could be attributed to the criminal activities of Chin and Cadden. While prosecutors said the loss should total $132.6 million, Stearns ruled that the loss be limited to $1.4 million, the value of the drugs that he said prosecutors actually proved were sent out fraudulently.
Although Assistant U.S. Attorney George Varghese told Stearns he would appeal the sentencing decision, U.S. Attorney Andrew Lelling and other federal officials issued a statement praising the overall outcome.
Lelling said that "again and again  he (Chin) acted with complete disregard for the health and safety of patients."
Prosecutors had argued all of NECC's drugs from its inception were produced and shipped as part of a fraudulent enterprise. The $132.6 valuation could have brought Chin a life sentence.
Other victims to testify included Will Mazure, a Michigan resident, who said he still suffers the after effects of the disease and the painful antifungal medications. He said a prior spinal fusion had to be dismantled.
"It was horrible," Mazure said as he described his still ongoing symptoms including memory impairment.
"I can't stay focused," he told the judge.
After the court session he told reporters that as a result of the judge's decision no one is going to be held responsible for the deaths.
Mary Beth Krakowski described how her aunt, Alice Machowiak, was forced to use a walker in the days leading to her death. She said her aunt would wait until after dark to retrieve her mail so that neighbors wouldn't see her.
She said Chin had a chance to be the hero and blow the whistle on Cadden and NECC.
"He could have been the unsung hero," she said.
Kathy and Dan Maccoux described how their "vibrant and athletic" daughter Tracy, one of the youngest victims, had her life completely derailed after being stricken with  meningitis following her injections with drugs prepared by Chin.
"All of our lives became a living hell," Kathy Maccoux said.


Monday, January 29, 2018

Chin Seeks 37 Month Sentence in NECC Case

By Watlter F. Roche Jr.

Glenn Chin, the 49-year-old former pharmacist convicted of racketeering and mail fraud for his role in the 2012 fungal meningitis outbreak is asking the judge presiding over his case to limit his sentence to 37 months.
In a 25-page filing today Chin's lawyer argued that the only victims of the outbreak were the physicians and health care providers who purchased drugs from Chin's company not the nearly 800 patients who were sickened or the 76 who died after injection with drugs Chin prepared.
"While the patients have endured terrible suffering they do not meet the definition of vulnerable victims," the sentencing memorandum states.
The recommendation is in sharp contrast to the one submitted late last week by federal prosecutors who asked U.S. District Judge Richard G. Stearns to send Chin to jail for 35 years.
The recommendations come before a hearing scheduled for Wednesday in U.S. District Court in Boston, Mass.
Chin argued that several so-called enhancements sought by prosecutors to lengthen his sentence, such as the large number of victims and the fact that Chin, a supervising pharmacist at NECC held a position of trust, did not apply to the facts of his case.
Citing the statements of federal prosecutors themselves, Chin stated that co-defendant Barry J. Cadden ran NECC, making all decisions and personally directing all of Chin's activities.
Chin's motion also disputes the of value losses federal prosecutors claim resulted from his criminal activity. Some of those drugs were not defective even though they were prepared by an unlicensed technician, the filing notes.
And literally for years, the filing states, NECC shipped drugs without any complaints or problems.
"Mr. Chin should not be sentenced based on drugs that were not proven deficient at trial," the brief states.
Noting that Chin was a salaried employee who did not share in profits as Cadden did, the motions concludes that imposing the 35 year sentence would result "in an utter travesty of justice."
Cadden already is serving a nine year prison sentence based on his conviction on similar charges. Proecutors had sought a 35 year sentence in his case also.
Both Cadden and Chin were cleared of second degree murder charges in the deaths of 25 patients.