Prosecutors Seek Probation, No Jail Time for NECC Defendants

By Walter F. Roche Jr.

Federal prosecutors in Boston, Mass. are seeking probation and fines but no jail time for the first two defendants facing sentencing in the probe of a deadly 2012 fungal meningitis outbreak.
In papers filed in advance of a Wednesday sentencing session, prosecutors are recommending that Carla Conigliaro be sentenced to one year of probation and $4,500 in fines, while her husband would face two years of probation and a $55,000 fine.
Carla Conigliaro was the majority owner of the New England Compounding Center, the now defunct Framingham, Mass.  firm blamed for the outbreak which sickened 778 patients, killing at least 77. Her husband headed a related firm that marketed NECC products to health providers across the country.
In their 11-page sentencing recommendation, prosecutors conceded that the two played no role in the day-to-day operations of NECC, but charged that they structured bank withdrawals as part of an effort to conceal assets from federal investigators even as the outbreak was reaching a crisis stage.
 They were "trying to conceal their personal wealth during an unprecedented public health crisis," the memo states.
The Conigliaros entered guilty pleas to vastly reduced charges last summer under a plea agreement approved by U.S. District Judge Richard G. Stearns. Stearns subsequently ruled that victims of the outbreak would not be allowed to testify at the sentencing hearing.
The attorney for the Conigliaros also filed papers stating that the couple should only face probation and no jail time.
"Given the extraordinary facts and circumstances of this case, the personal and family background of the defendants and the written plea agreement between the government and the Conigliaros,  sentences of probation are fair and reasonable and will assure that punishment of Carla Conigliaro and Douglas Conigliaro is sufficient but not greater than necessary," the 18-page filing by David E. Meier states.
Under the plea agreement federal prosecutors agreed to drop four additional counts from the original indictment charging the Dedham, Mass. couple with violating a federal law requiring the reporting of bank transactions exceeding $10,000.
In its filing prosecutors cited "a marked increase" in the amount of cash withdrawals by the defendants in the Fall of 2012, which "directly correlates to the fungal meningitis outbreak, the subsequent criminal investigation and the flood of litigation that ensued."
Under the plea deal Carla Conigliaro pleaded guilty to violating the structuring law with withdrawals totaling $4,600.75 while her husband admitted to $119,647 in structured withdrawals.
"They deserve to be held accountable for trying to illegally conceal these funds from the government and the bankruptcy trustee," Assistant U.S. Attorney George B. Varghese wrote in the memo.
Two other NECC executives, Barry Cadden and Glenn Chin are scheduled to go on trial early next year on charges including 25 counts of second degree murder.
Still other NECC employees and owners are scheduled for trial three months later.