Law Firms to Share $1.6 million +

By Walter F. Roche Jr.


Six law firms will share at least $1.6 million from the settlement of cases brought against a Nashville, Tenn. clinic in the aftermath of a deadly fungal meningitis outbreak.
In a series of motions filed today in U.S. District Court in Boston, Mass., the law firms are asking U.S. District Judge Rya W. Zobel to approve the fees but also to keep the amount of the payments secret.
Under the proposal the law firms will share 8 percent of the total awarded to victims. While that figure has never been disclosed, it is reported to be in excess of $20 million. The settlement resolves claims filed by 114 patients or their survivors who were injected with a fungus laden steroid in 2012 at the Saint Thomas Outpatient Neurosurgical Center.
The firms sharing the fees are Hagens, Berman, Branstetter Stranch and Jennings, Ellis and Rapacki, Lief Cabraser Heiman and Bernstein, Kinnard Clayton and Beveridge and Leader Bulso and Nolan.
"The 8 percent assessment has been the level of reasonable expectation of counsel and the claimants from the earliest stages of the multi-district litigation," the motion states.
"Significant good work was performed by many lawyers in pursuing claims asserted in the Saint Thomas cases," the filing states.
In a report filed earlier this week in the same court case, it was reported that checks  have been processed for 90 of the 114 victims who filed claims against Saint Thomas. The payments represent about 90 percent of the total each victim is expected to finally receive.
The payments from the Saint Thomas settlement are separate from payments victims are slated to get from a nation settlement fund established under the bankruptcy of the New England Compounding Center, the Massachusetts firm that shipped the tainted methylprednisolone acetate to health providers across the country.
Some of the same law firms are sharing $6.2 million from a separate legal action stemming from the 2012 outbreak. Those fees were detailed earlier this week in a report also filed in Boston.
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Outbreak Fund Paid $37.8 Million to Victims, $6.2 Million to Lawyers

By Walter F. Roche Jr.

An annual report by the trustee of a fund to benefit victims of a deadly 2012 fungal meningitis outbreak shows some $37.8 million has been distributed to 2,022 victims while a nearly equal amount could be issued later this year.
The lengthy report from Lynne F. Riley was filed today in U.S. District Court in Boston, Mass. It covers the 12 month period ending on May 31 of this year.
Though the names of victims are not disclosed, the report shows the largest single payment to a victim or survivor of a victim was $142,692. The smallest was $649.61. The average payment was $18,694. Sixty of the victims collected $100,000 or more.
The fund was created under the bankruptcy of the New England Compounding Center, the now defunct firm blamed for the 2012 outbreak of fungal meningitis. According to federal officials some 778 patients were sickened by fungus infested methylprednisolone acetate from NECC. Seventy six of those patients died.
The checks issued to victims represent about half of what each victim is expected to ultimately receive when the next distributions are made. In prior reports the trustee indicated a third round of payments may come still later.
Riley also listed $6.2 million in disbursements to law firms from a so-called common benefit fund set up to pay lawyers who did work for the benefit of all victims.
The largest amount, $1.25 million, went to the lead plaintiff firm Hagen Berman Sobel and Shapiro. Ellis and Rapacki was paid $775,725, while Branstetter Stranch and Jennings was paid $730,146 and Janet Jenner and Suggs collected $518,912.
The law firms, like the victims, will be getting a second round of payments approximately equal to the first
Riley's report also provided details on additional payments made to victims who were treated at three facilities.
Payments totaling just under $2 million were made to 13 victims treated at a North Carolina clinic while $10.6 million went to 39 claimants at a New Jersey facility and $31.5 million went to 163 victims treated at a Virginia facility.
Additional expenses for the national fund include $293,611 paid to the Duane Morris law firm and Paul Moore, the post bankruptcy confirmation officer. The fund had $74.4 million on deposit as of the end of the 12 month period.
Riley reported that a total of 2,353 claims were filed for the national fund and 2,022 of those were fully or partially paid while 289 were fully denied. Forty were found invalid and two were withdrawn.
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Nashville Outbreak Victims Getting Checks

By Walter F. Roche Jr.

Checks have been issued to 90 of 114 victims of the 2012 fungal meningitis outbreak who were injected with fungus tainted spinal steroids at a Nashville, Tenn. clinic, according to a report filed today in U.S. District Court in Boston, Mass.
The filings by attorneys for outbreak victims detail expenses that have been incurred in processing the claims and issuing the checks. The exact details of the settlement with the Saint Thomas Outpatient Neurosurgical Center and related parties have not been made public, but it is estimated at more than $20 million.
According to the report by Nashville attorney Benjamin Gastel, a global settlement of the case was reached in September of last year.
The initial payments to victims or their survivors are estimated to equal about 90 percent of the total each claimant is expected to eventually collect. The payments are separate from checks to victims from a national settlement reached in the bankruptcy of the New England Compounding Center.
NECC sold the tainted methylprednisolone to the Nashville clinic and dozens of other health facilities across the country. NECC's then president, Barry J. Cadden, was sentenced to a nine year prison sentence on Monday for his role in the outbreak.
The filing in the Saint Thomas action seeks the approval of U.S. District Judge Rya W. Zobel for payments totaling just under $100,000.
A payment of $60,000 is being requested for a Louisiana firm, Perry Dampf Dispute Solutions, which was hired as the administrator of the claims. The second request is for $39,375 to Epiq Systems, Inc., the firm hired to process and issue the individual checks. Epiq played a similar role in the national settlement.
Contact: wfrochejr999@gmail.com

Cadden Seeks Prison Close to Home

By Walter F. Roche Jr.




Barry Cadden, the former drug company president recently sentenced to a nine year prison term, is asking the judge who sentenced him to recommend he serve his sentence close to his Wrentham, Mass. home.
In a motion filed this week, Cadden's lawyers asked U.S. District Judge Richard G. Stearns  to recommend he be sent to the federal prison at Fort Devens, Mass., located in central Massachusetts.
Federal prosecutors, Cadden's lawyers acknowledged, oppose the request.
The Fort Devens facility is about 50 miles from Cadden's Wrentham home.
Cadden was given the nine year sentence on Monday following a lengthy hearing. He was convicted in late March on racketeering, conspiracy and mail fraud charges.
Cadden has been ordered to begin serving his sentence on Aug. 7. Under Stearns existing order it will be up to the federal Bureau of Prisons to determine where he will serve his sentence.
Stearns is also considering a motion by the U.S. Attorney to order Cadden to forfeit some $132.8 million.
During the Monday hearing Assistant U.S. Attorney Amanda Strachan stated that if the forfeiture order is granted, an effort would be made to distribute that money to the victims of the outbreak caused by contaminated drugs produced by Cadden's company, the New England Compounding Center.
Cadden's lawyers, however, have challenged the request charging that the forfeiture must be limited to the amount of money Cadden himself received as a result of the criminal acts he was convicted of.
"The government has not met its burden of proving the amount of proceeds Mr. Cadden obtained for the racketeering acts for which he was convicted," Cadden's filing states.
The $132.8 million figure claimed by prosecutors is the total amount NECC collected in revenue from 2006 to 2012.
Cadden, however, contends the forfeiture order should be limited to a little over $32,000, an amount based on the drugs specifically cited in the indictment.
The charges against Cadden stem from a two year federal probe of the 2012 fungal meningitis outbreak caused by contaminated drugs shipped by Cadden's company to health facilities across the country.
While Cadden was convicted on 57 counts, the jury acquitted him on 25 counts of second degree murder.
Contact: wfrochejr999@gmail.com

Cadden Gets Nine Year Sentence

By Walter F. Roche Jr.

Boston, Mass. A 50-year-old pharmacist who once headed a thriving Framingham drug compounding firm was sentenced today to a nine year prison sentence following his conviction on racketeering and mail fraud charges.
The sentence was imposed today by U.S. District Judge Richard G. Stearns following a lengthy hearing in which victims of a deadly outbreak  caused by Cadden's company pleaded for the maximum possible sentence.
Stearns, however, rejected the call for a 35 year sentence from federal prosecutors and the plea for a three year sentence made by Cadden's lawyer.
Stearns said he would have imposed a more severe sentence had he been convinced that Cadden knew that the drugs being shipped by the New England Compounding Center were potentially lethal.
Stearns  also was critical of regulators who failed to act against Cadden's company sooner. Only the U.S. Centers for Disease Control and Prevention recognized the magnitude of the outbreak, he said
Cadden, a Wrentham resident, was one of 14 people indicted on Dec. 16, 2014 following a two year federal investigation of the 2012 fungal meningitis outbreak which sickened some 758 patients in 23 states killing 76 of them. Tennessee, Michigan, Virginia and Indiana were the hardest hit.
Cadden was found guilty on March 22 of this year following a 10-week marathon trial. He was convicted on 57 counts of racketeering, conspiracy and mail fraud, but cleared of 25 counts of second degree murder.
Cadden was president, part owner and chief pharmacist for the New England Compounding Center, the company blamed for a deadly 2012 fungal meningitis outbreak.
Prior to imposing the sentence, Stearns heard from more than 20 victims of the 2012 outbreak, including Patricia Martin of Nashville, Tenn., whose mother Mary Neal Martin died in the outbreak.
Describing her mother's death as "horrible," Martin said her mother was an active person cutting her own lawn and washing her own car until late September of 2012 when she was injected with a steroid from Cadden's company.
Stating that her mother put her trust in the medical establishment, Martin said, "Don't let my mother's death be in vain."
In a tearful presentation just before sentencing, Cadden, said it broke his heart to read and hear the statements of victims who suffered because of drugs shipped by his company.
With his voice breaking with emotion, Cadden said he was especially sorry for the toll the tragedy brought on his wife and sons.
In their sentencing memorandum in which they called for a 35-year prison sentence, prosecutors charged that Cadden displayed an "unconscionable disregard for the lives of the patients using his drugs."
And they cited a series of so-called aggravating circumstances that justified a harsher than normal sentence. Those included the fact that there were multiple vulnerable victims, that Cadden was an authority figure and his actions and inactions created a "substantial risk of death or bodily injury."
Cadden's legal team acknowledged that their client was not guiltless but insisted that he had no reason to believe the drugs being shipped by his company were not sterile. They asked Stearns to impose a sentence of three years or less.
Cadden's lawyers also cited what they described as comparable cases of other drug compounders who were charged criminally but never served any jail time. A Tennessee druggist, David Newbaker, was given a probationary sentence after being cited for many of the same violations as NECC.
In a Texas case, the druggist was charged with a misdemeanor, Cadden's lawyer Bruce Singal noted in a 60-page sentencing memo.
Singal wrote that none of the crimes his client was convicted of "comes anywhere close to warranting a life sentence."
Two other of Cadden's co-defendants, Douglas and Lisa Conigliaro, pleaded guilty to vastly reduced charges. Two others were acquitted of all charges. Glenn Chin, 48, of Canton is scheduled to go on trial in September and he, like Cadden has been charged with second degree murder.
Robert Ronzio, NECC's director of sales already has pleaded guilty to a conspiracy charge and awaits sentencing. He testified extensively during Cadden's trial delivering key testimony for prosecutors.
Following the sentencing victims expressed varying reactions. Martin said she was satisfied with the decision and appreciated the judge's explanation.
Other victims, however, said they were upset that their testimony appeared to have no impact.

Cadden Seeks Three Year Sentence

By Walter F. Roche Jr.


Federal prosecutors are asking a judge to issue a 35 year prison sentence to the former head of a drug compounding firm, while the defendant is asking for only a three year sentence following his conviction on racketeering and mail fraud charges.
The widely divergent recommendations for Barry J. Cadden were filed this week in advance of a scheduled Monday sentencing session before U.S. District Judge Richard G. Stearns.
Stearns, meanwhile,  denied Cadden's motion for acquittal In a 20-page order issued Thursday, Stearns concluded that prosecutors presented ample evidence for the 12 member jury to reach its conclusion, convicting him on 57 counts. They acquitted the 50-year-old on 25 counts of second degree murder.
Cadden was the president and part owner of the New England Compounding Center, the company blamed for the 2012 fungal meningitis outbreak. The company shipped out thousands of vials of a steroid that were loaded with a deadly fungus. As prosecutors noted, at least 76 patients died while over 700 were sickened in  the worst ever outbreak to be caused by a pharmaceutical product.
Prosecutors, in their 50-page sentencing memorandum, said Cadden was responsible for "an unprecedented public health crisis" and displayed "an unconscionable disregard for the lives of the patients using his drugs."
Stating that Cadden deserves a "severe punishment for his crimes," prosecutors repeatedly cited evidence from his 10-week trial showing Cadden knew that NECC was not properly testing the products it was shipping all over the country.
In seeking a lengthy prison sentence, they charged  there were multiple vulnerable victims and Cadden's crimes "involved a substantial risk of death or bodily injury." They also cited his role as the leader of what jurors concluded was a criminal enterprise
Cadden's attorneys, however, argued that their client had "every reason to believe" that the products NECC produced were sterile.
They acknowledged, however, that Cadden was not blameless.
"He did things and particularly failed to do things that in hindsight he truly regrets," Cadden's lawyers wrote in a 60-page sentencing memorandum.
His lawyers stressed that the jury cleared him of the second degree murder charges.
"As the jury found, Mr. Cadden is not a murderer," the memo states.
In a lengthy history of NECC, Cadden's lawyers disclosed that he collected $8.2 million in profits from NECC during the six years preceding the 2012 shutdown of the Framingham, Mass. facility.
In addition he collected $53 million from a sister company called Ameridose. It too was shuttered in the aftermath of the outbreak.
According to the memorandum it was a brother-in-law of Cadden's, Douglas Conigliaro, who came up with the idea of starting a drug compounding business. Prior to that Cadden had been following in his father's footsteps, working in a local pharmacy.
Prosecutors noted that despite the acquittal on the second degree murder charges, the voting tally sheets showed that a majority of the panel voted to convict Cadden on 21 of the 25 second degree murder counts.
Citing the statements of investigators from the U.S. Centers for Disease Control and Prevention and the U.S. Food and Drug Administration, prosecutors wrote that Cadden had been warned years earlier that NECC was not following proper procedures.

Judge Denies Cadden Acquittal Motion

By Walter F. Roche Jr.

A federal judge today rejected an acquittal motion filed by a former drug company president convicted by a jury in March on 57 counts of racketeering, conspiracy and mail fraud.
In a 20-page decision issued in Boston, Mass. U.S. District Judge Richard G. Stearns also rejected Barry J. Cadden's request for a new trial.
While upholding the jury verdict, Stearns did fault federal prosecutors for being "less than forthright" about a binder of government exhibits that was in fact delivered to the jury room.
Rejected by Stearns, however, were claims of prosecutorial misconduct and insufficient evidence to back the 57 counts on which Cadden was convicted.
Stearns had high praise for the jurors who sat through 10 weeks of testimony before delivering their verdict on March 22. Stearns called the jury "one of the hardest working and most conscientious juries I have had the privilege to work with.
As he noted the jury acquitted Cadden on 25 counts of second degree murder.
Cadden, one of 14 indicted in late 2014 by a federal grand jury, is scheduled to appear before Stearns on Monday for sentencing.
The charges stem from a deadly 2012 fungal meningitis outbreak caused by drugs shipped from the company Cadden headed, the New England Compounding Center. NECC has been blamed for the outbreak triggered by fungus laden steroids shipped to health facilities in 20 states. Some 778 patients were sickened and 77 of them died.
In his decision Stearns rejected claims by Cadden that he did not know of insanitary conditions in the clean rooms where the deadly steroids were prepared.
"Cadden was a licensed pharmacist with years of practitioner's experience," Stearn wrote, concluding that there was "considerable evidence" Cadden knew of serious problems.
He also concluded there was ample evidence of a conspiracy between Cadden and others at NECC.
"The record is replete with evidence among the alleged conspirators discussing the improper use of labels, the shipping of untested drugs and drugs with expired ingredients as well as unremediated insanitary conditions," the ruling states.
Stearns did fault prosecutors for  presenting testimony from a clinic employee that gave the impression that Cadden knew of problems with the steroids five days before a recall was initiated.
He said the government's persistence in defending that testimony was "perplexing at best and at worse inconsistent with the obligation of the government to serve the higher interests of justice."
But, Stearns continued, the jury ultimately rejected the second degree murder charges.
"As no prejudice resulted, there is nothing for the court to rectify," he wrote.
The ruling also faults Assistant U.S. Attorney George Varghese for failing to disclose that a binder containing government exhibits had been sent to the jury during its deliberations.
Stearns acknowledged that he mistakenly assured Cadden's lawyer, Bruce Singal, that the binder was not in the jury room.
"There is plenty of fault to share for the mistake," Stearns wrote, citing "the government for not being more forthright."
Nonetheless he concluded that the mistake "was not so prejudicial as to merit the harsh result of overturning even a portion of the verdict."
In fact, he wrote, that had the government offered the binder as a formal exhibit he would have admitted it.

Judge Won't Disclose Jurors' Addresses

By Walter F. Roche Jr.

A media motion to mandate the disclosure of jurors' home addresses in the case of a former drug company executives has been denied.
U.S. District Judge Richard G. Stearns today denied a motion by a Boston radio station to release the home addresses of the jurors who witnessed the 10-week trial of Barry J. Cadden earlier this year.
Radio station WBUR had sought the addresses in a motion filed earlier this week. Stearns already had agreed to release the jurors' names and home towns.
In the brief opinion Stearns said the public radio station's notion that it had a right to home addresses was "misplaced."
"In the turbulent times in which we now live, I would no more consider the public disclosure of a juror's home address than I would my own," Stearns wrote.
Under his previous order Stearns said he would release the jurors' names and hometowns after Cadden's sentencing, which is set for Monday.
Cadden, who was president and part owner of the New England Compounding Center, was convicted on charges of racketeering, conspiracy and mail fraud. He was acquitted on charges of second degree murder.
The now defunct NECC was blamed for a nationwide fungal meningitis outbreak that sickened some 778 patients including 77 who died.
Contact: wfrochejr999@gmail.com

Cadden Disputes Losses From Tainted Drugs

By Walter F. Roche Jr.

Convicted former drug executive Barry J. Cadden says his upcoming sentence should be based on losses of only $189,848 not the "wildly inflated" $132.8 million claimed by federal prosecutors.
In a 25-page filing coming less than a week before his scheduled sentencing, Cadden's lawyers argued that he should be held liable for only those drugs which prosecutors clearly proved were deficient.
The dollar value of losses could prove critical when U.S. District Judge Richard G. Stearns determines Cadden's sentence following his conviction in late March on 57 felony counts including racketeering and mail fraud. The hearing is set for Monday in Stearn's Boston, Mass. courtroom.
"The actual loss is confined to a narrow time period and several narrow categories of drugs, not the government's sweeping allegation," the Cadden brief states.
Federal prosecutors have argued that the sentence should be based on the assumption that every cent of income collected by Cadden's New England Compounding Center between 2006 and 2012 was a loss for its customers.
Cadden was indicted following a two year probe of a deadly fungal meningitis outbreak caused by fungus laden steroids shipped by NECC to health facilities in more than 20 states. Following a 10-week trial earlier this year Cadden was acquitted on 25 counts of second degree murder but found guilty on the racketeering and mail fraud charges.
In their filing Cadden's lawyers argued that the so-called losses should be limited to two shipments of methylprednisolone acetate shipped in 2012. They said the government failed to prove that a third lot shipped in May of 2012 was deficient.
Contending that the vast majority of drugs shipped by NECC "were of proper quality, untainted by any contamination or any other defect," the brief charges that the government's loss claims were "vastly overstated."
And, the brief adds, the losses should be limited to three years and not the seven claimed by prosecutors.
In addition, the memo argues, loss calculations should not include drugs shipped with false patient names since there was no evidence those drugs were deficient or caused any harm. Nor should it include drugs compounded by a codefendant, Scott Connolly.
Connolly had surrendered his registration as a drug technician, but Cadden's lawyers argued, there was no evidence drugs he processed were deficient.
"Connelly was a peripheral part of the NECC team," the brief states.
Cadden's lawyers also argued that  their client was not involved in the day-to-day operations of the clean rooms where critical sterile drugs were compounded. Instead, they said, that task was performed by another co-defendant, Glenn Chin. Chin is scheduled for trial in September while Connolly and other defendants will go on trial following the Chin case.
As for a cancer treatment drug called methotrexate, Cadden's lawyers said that there was no evidence the drug caused any harm to pediatric patients despite the fact that it was made with outdated ingredients.
"NECC produce hundreds of thousands of vials of drugs from 2006 to 2012 that safely and successfully treated patients," the brief concludes.
Contact: wfrochejr999@gmail.com.

NECC Defendants Retain Vast Real Estate

By Walter F. Roche Jr.

In early April of this year one of the defendants in the criminal case stemming from a deadly fungal meningitis outbreak and his wife sold an interest in a Cape Cod property for $791,250. It did not leave them homeless.
The home at 65 Bone Hill Road in Barnstable, Mass. was just one of three properties owned by Gregory Conigliaro, part owner of the now defunct New England Compounding Center. Cynthia  Conigliaro, Gregory's spouse, still owns another Cape Cod property assessed at just shy of $2 million.
The couple also own a home in Southboro Mass. assessed at nearly $4 million.
The Conigliaros and other NECC owners, records show, have been able to retain millions of dollars worth of real estate even after agreeing to provide some $47 million to settle the NECC bankruptcy case. Though liens had been recorded against many of the properties, they were later lifted following the bankruptcy settlement.
In addition to the $47 million NECC's former owners have agreed to provide victims with a portion of any tax refunds they receive. An exact amount has not yet been determined.
The criminal cases against NECC's former owners stem from the federal probe of the 2012 fungal meningitis outbreak which sickened some 778 patients across the country. Seventy seven of them died.
Gregory Conigliaro is scheduled to go on trial later this year on a charge of conspiracy to defraud the federal government.
His brother, Douglas Conigliaro,  who has already entered a guilty plea to vastly reduced charges, has retained his properties in Boston and Dedham, Mass. and Florida.
A condo at 128 Beacon St. in Boston is assessed at just under $5.8 million. A home in suburban Dedham is assessed for $1.8 million. They also own a lakefront property in Winter Park, Fla. assessed at $1 million.
Douglas Conigliaro was given two years probation and fined $55,000 while his wife Carla was fined $4,500 and given one year probation. Carla, NECC's majority owner, and Douglas pleaded guilty to making multiple withdrawals from back accounts under $10,000 to avoid reporting requirements set by federal law.
Barry J. Cadden, NECC's president and one time part owner, is the owner of properties on Manchester Drive in Wrentham, Mass, assessed at nearly $1.8 million.
Cadden was convicted in March on 57 counts with charges including racketeering, conspiracy and mail fraud. He was acquitted on 25 counts of second degree murder. Cadden is scheduled for sentencing on Monday.

Cadden Jurors' Names to be Released

By Walter F. Roche Jr.

The names of the jurors who decided the fate of Barry J. Cadden during a 10-week trial ending March 22 will be made public following his June 26 sentencing.
U.S. District Judge Richard G. Stearns decided Friday to release the names. His decision comes after a Boston, Mass. radio station filed a motion to force release of the names, which normally are made public shortly after a trial is completed.
Stearns had offered no reason for withholding the names, but in his Friday order he contended the usual routine in his court was to only release the names of jurors when a case was completed.
In his order Stearns said that in consideration of the "extended periods of time" between trials and "in view of the public's long term interest in maintaining an open judicial process," he would release the names following Cadden's sentencing.
Cadden, the former head of the New England Compounding Center was convicted on 57 felony counts on charges stemming from the investigation of a deadly fungal meningitis outbreak caused by contaminated drugs shipped from the company headquarters in Framingham, Mass.
Stearns issued his decision in a two-page order issued Friday. The motion seeking to intervene and move to order the release of the jurors' names was filed by WBUR.
Reporters have been anxious to question jurors because of a document called the jurors' voters slip made public just after the jury was dismissed. The document indicated that a majority of jurors had voted to convict Cadden on some but not all of the second degree murder charges.
Under the judge's standard instructions, the jurors were told a unanimous vote was required on each The tally sheet showed eight jurors voted for a guilty finding on second degree murder in cases from Michigan and Tennessee, while four voted not guilty.
In the Indiana cases the vote was 9-3 in favor of a guilty finding. The vote for a guilty finding was 7-5 on the Maryland cases.
In the Virginia cases the vote was 3 for guilty and 9 not guilty. In the Florida and North Carolina cases the vote was 12-0 for a not guilty verdict.
As explained in the 50-page jury instructions the jury had to consider the specific state laws in deciding their votes on the second degree murder charges. Virginia, Florida and North Carolina statutes had stricter standards for reaching a guilty finding.
Prosecutor have cited the tall sheets as evidence the jury carefully considered all of the charges and that the majority found that a second degree murder charges was proven in four of seven states.
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VA Facility Hid Sterile Compounding Violations

By Walter F. Roche Jr.

A pharmacy manager at a Veterans Administration hospital in Louisiana failed to tell his superiors and colleagues that state inspectors had found multiple violations in the compounding of sterile drugs and that he had surrendered a state license to avoid possible administrative action.
A report issued today by the VA's Inspector General also found that there were continuing serious violations of sterility standards at the Overton Brooks VA Medical Center in Shreveport.
As a result of the findings,sterile drug compounding for patients at the 103 bed facility have been outsourced to other VA and private pharmacies.
The IG found a lack of proper cleaning with cleaning logs for some days left blank. They also found "very limited" sampling of surfaces in sterile compounding areas, no viable air sampling and lack of compliance with the national standards set by a national agency, the U.S. Pharmacopeia.
Still other deficiencies include a lack of training of personnel and deficient documentation of competencies.
The IG did state that a review of patient records turned up no evidence that they were harmed by the deficient practices.
The report noted that many of the same deficiencies had been cited by the Louisiana Pharmacy Board in late 2016.  The report, however, did not make its way to the pharmacy manager's superiors.
"Despite the critical nature of the board's findings, pharmacy managers did not report the October and January inspection reports showing deficiencies to either facility or VA leaders," the report states.
Other critical findings from the IG included a critical air filter that hadn't been changed since 2012,  a technician not following sterile protocol and rust and/or debris observed on benches and equipment in sterile areas.
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Prosecutors Push for Long Cadden Sentence

By Walter F. Roche Jr.

Federal prosecutors argued today that every cent paid to a drug compounding firm over a six year period should be considered as fraudulent conduct in the upcoming sentencing of the company's former president.
In an eight-page filing and oral arguments, the prosecutors said Barry J. Cadden's upcoming sentencing should be based on the loss of $132.8 million, the gross revenue of the New England Compounding Center from 2006 to 2012.
Cadden, the president and part owner of NECC  was convicted in late March on 57 counts of racketeering, conspiracy and mail fraud. His sentencing is scheduled for June 26. He was acquitted on 25 counts of second degree murder.
Today Cadden's attorneys argued that their client should either be acquitted of those charges or given a new trial due, at least in part, to the conduct and tactics of prosecutors in the 10-week trial.
They argued that prosecutors from the U.S. Attorneys office improperly presented evidence to jurors during closing arguments.
U.S. District Judge Richard G. Stearns took the motions under advisement following the 11 a.m. hearing.
Cadden was one of 14 people indicted by a federal grand jury following a two year probe of a deadly fungal meningitis outbreak caused by fungus laden drugs shipped by NECC to health providers across the country.
In their filing Assistant U.S. Attorneys Amanda Strachan and George Varghese also indicated that their sentencing recommendation will include a so-called upward departure in the length of prison time based on aggravating circumstances.
Those circumstances include the fact that there were 10 or more victims and that Cadden acted with the conscious or reckless risk of death or serious bodily injury."
They also cited the fact that there were "a large number of vulnerable victims" and that Cadden was an organizer or leader of a criminal enterprise and that he "abused a position of trust."
To bolster the argument that all NECC's sales should be considered fraudulent, they cited assurances Cadden made to customers about the quality of NECC's products.
Had customers known the truth, the filing states, they never would have purchased any NECC products.
"Where the product is worthless, the loss should be calculated using the entire price paid," the memorandum states, adding that Cadden sold "grossly substandard drugs."
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Payments Flowing for Tennessee Outbreak Victims

By Walter F. Roche Jr.

Although the details remain secret, payments are beginning to flow for outbreak victims who were injected with contaminated steroids at a Nashville, Tenn. clinic.
The payments are coming from a fund estimated at more than $20 million assembled to settle a little over 100 separate lawsuits. The payments are going to victims and their survivors who were treated in 2012 at the Saint Thomas Outpatient Neurosurgical Center.
The clinic was one of dozens where patients contracted fungal meningitis and other illnesses after being injected with methylprednisolone acetate laden with fungus. Thousand of tainted vials of the steroid were shipped to health providers by the now defunct New England Compounding Center in Framingham, Mass.
Though attorneys involved in the settlement declined to comment, several sources confirmed that payments from the fund are now being processed and some checks have been issued.
The fact that a settlement had been reached became public during a session in U.S. District Court in Boston, Mass. earlier this year. Hundreds of suits stemming from the outbreak were consolidated before U.S. District Judge Rya Zobel.
Tennessee victims can expect to get two payments from the settlement fund. The first payment is supposed to equal about 90 percent of what each qualified victim will ultimately collect. A second payment is expected later this year.
The initial checks are generally being sent to lawyers representing victims rather than directly to victims themselves.
The Tennessee victims, like those treated at other clinics, are also getting settlement payments from another trust fund established under the NECC bankruptcy. A court appointed trustee recently reported to Zobel that some 1,852 checks had been issued to victims. (That figure, however, included some payments from clinic settlements other than the Nashville one.)
Payments from both the NECC national fund and the Tennessee settlement fund are based on a point system designed to reflect the severity of the illness suffered.
Tennessee was one of the hardest hit states in the 2012 outbreak. In addition to the Nashville clinic, victims were injected at health facilities in Crossville and Oak Ridge. Suits against those two facilities have not been settled but a mediation session is scheduled for later this month.
Data collected by the U.S. Centers for Disease Control and Prevention show 153 Tennessee patients were sickened in the outbreak and 16 died.
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Prosecutors Seek $132.8 Million From Cadden

By Walter F. Roche Jr.

Federal prosecutors are asking a judge to issue a $132.8 million forfeiture order against the former head of a drug compounding firm convicted in late March on 57 felony counts including racketeering and mail fraud.
In a motion filed today in U.S. District Court in Boston, Mass. the U.S. Attorney asked U.S. District Judge Richard G. Stearns to issue an order enabling prosecutors to seize Cadden's multimillion dollar home in Wrentham, Mass.,  another property in Kingston, R.I., a sailboat and a BMW.
Citing the March 22 jury verdict, the 13-page filing by Assistant U.S. Attorneys Amanda Strachan and George Varghese contends that the law requires forfeiture in cases of conviction on racketeering charges.
"The government is entitled to the gross proceeds of the (criminal) enterprise," the motion states.
The filing cites the trial testimony of a forensic expert who estimated that Cadden and his New England Compounding Center, generated $132.8 million in profits through illicit activities.
The forfeiture order request is the latest development in the aftermath of a 2012 fungal meningitis outbreak that sickened 778 patients across the country. Seventy-seven of them died.
Cadden, whose 51 day trial began in January, was one of 14 indicted in late 2014 following a two year federal probe of the deadly outbreak.
In the forfeiture filing, prosecutors acknowledged that while the precise current location of the funds is not known, the order would enable them to get exact details. They noted that Cadden had declined a request to provide the government with needed information.
In yet another development today, lawyers for WBUR, a Boston radio station, filed a motion to intervene in Cadden's case to get Stearns to release a copy of the jurors' list for Cadden's trial.
The motion charges that Stearns has refused to release the list despite at least two formal media requests.
"Without explanation the court has declined to release the juror list," the filing states.
Citing other cases, the radio station contends that the juror's lists must be made public after a verdict is entered.
The filing noted that Stearns has still refused to release the list even though the verdict was delivered over three months ago.
According to the filing, the only way a jurors' list can be kept secret is when a judge makes  "particularized findings reasonably justifying non-disclosure."
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Judge Denies Delay in Cadden Sentencing

By Walter F. Roche Jr.

A federal judge has denied a request by a former drug company executive to delay for two weeks his sentencing on racketeering and mail fraud charges.
In a brief order issued late last week U.S. District Judge Richard G. Stearns sitting in Boston, Mass. denied the delay motion filed in behalf of Barry J. Cadden, the former president and part owner of the now defunct New England Compounding Center.
Under Stearns ruling the sentencing on 57 counts of racketeering, conspiracy and mail fraud will take place on June 26 at 2 p.m.
Cadden had sought a two week delay citing the need for additional time to respond to a pre-sentencing report.
Citing the lengthy 47-page presentence report, Cadden wrote, "the stakes are high in this case as the case is complex, adding that "the draconian position the government will take at sentencing is unwarranted."
In denying the proposed delay to July 10, Stearns wrote that Cadden had provided "no compelling reason" for such a delay and said the parties had been provided ample time to prepare for what should be "a reasonably straightforward hearing."
"Given the full and complete record established during the trial (and during pretrial proceedings), there is no need for any further factual development of the issue," Stearns ruled.
Stearns said the only issue that might potentially have a substantial impact on the sentencing would be the  calculation of the amount of loss to customers resulting from the racketeering charges. As a result Stearns said he would allow Cadden's lawyers to present arguments on the loss issue during an already scheduled June 15 hearing on Cadden's pending motion for acquittal or a new trial.
Cadden was convicted in late March following a 10-week trial. While he was convicted of racketeering and mail fraud, the jury acquitted him on 25 counts of second degree murder.
A Wrentham, Mass. resident Cadden was one of 14 people connected to NECC indicted by a federal grand jury following the probe of a deadly fungal meningitis outbreak caused by fungus laden steroids shipped by NECC.
Some 778 patients were sickened in the outbreak and 77 of them died.
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Cadden Acquittal Hearing Set for June 15

A federal judge has set June 15 for a hearing on a motion filed by a former drug compounding executive seeking acquittal on the 57 felony counts a jury convicted him on in late March.
Cadden, who headed the New England Compounding Center, has asked U.S. District Judge Richard G. Stearns to either acquit him of the charges of grant him a new trial.
Stearns also set a July 11 date for oral arguments on a motion by codefendant Gregory Conigliaro for acquittal on a related charge.
Conigliaro was a part owner of NECC as was Cadden.
The now defunct company has been blamed for a deadly fungal meningitis outbreak that sickened 778 patients. killing 77 of them.
Cadden was convicted on charges of racketeering, conspiracy and mail fraud. The jury acquitted him on 25 counts of second degree murder.
In another development, Cadden has asked that Stearns unseal a series of sidebar conferences that were held during his 10-week trial. Stearns gave prosecutors till June 26 to respond to Cadden's motion.
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Cadden Sentencing Changed Again

The sentencing session for a former drug compounding company executive convicted on 57 felony counts has been rescheduled for a second time.
U.S. District Judge Richard G. Stearns issued an order Friday setting the sentencing of Barry J. Cadden for 2 p.m. on June 26.
Cadden was convicted in late March on racketeering, conspiracy and  mail fraud charges following a ten week trial in Stearns' Boston, Mass. courtroom.
The 12-member jury acquitted Cadden on 25 counts of second degree murder.
The Wrentham, Mass. resident was one of 14 indicted in late 2014 following the federal probe of the 2012 fungal meningitis outbreak that took the lives of 77 patients across the country.
Glenn Chin, who faces the same 25 second degree murder counts, is scheduled to go on trial on Sept. 19. The other remaining defendants are slated for trial when the Chin case is concluded.
Cadden was president and part owner of the New England Compounding Center, the company that caused the deadly outbreak.
The Cadden sentencing was originally scheduled for June 21, but it was changed to June 29.
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Prosecutors Oppose FDA Civil Testimony on NECC

By Walter F. Roche Jr.

Warning that there is "too much at stake," federal prosecutors are asking a federal judge to block Tennessee health clinics from questioning investigators from the U.S. Food and Drug Administration who probed the company blamed for a deadly outbreak.
In a seven-page filing this week, the U.S. Attorney in Boston, Mass. warned that the requested depositions could jeopardize ongoing criminal trials of the remaining defendants charged in the aftermath of  the 2012 fungal meningitis outbreak.
In fact, according to the filing, FDA investigators "are still investigating issues related to this case that could affect other defendants."
The filing was in response to "a request for clarification," filed by the attorneys for two Tennessee health clinics being sued for their roles in the outbreak. The clinics contend that to prepare their defense they need the testimony of the FDA and others including Barry Cadden, the part owner of the New England Compounding Center, who has already been convicted on 57 felony counts.
Cadden already has filed a motion against the clinic's move to depose him as has Robert Ronzio, a former NECC sales executive who has pleaded guilty on a related charge and delivered key prosecution testimony during Cadden's 10 week trial.
In their filing federal prosecutors asked U.S. District Senior Judge Rya Zobel to also bar the Tennessee clinics from deposing John Connolly, another key prosecution witness in the Cadden trial, and John Notorianni, who worked for Medical Sales Management, NECC's sales arm.
As the government filing notes, Cadden has asked for acquittal or a new trial and faces sentencing on June 26.
Codefendant Glenn Chin is scheduled to go on trial on Sept. 19 and the remaining defendants will be tried when the Chin case is completed.
The government filing also notes that a mediation session is scheduled in the cases against the Tennessee clinics in Oak Ridge and Crossville that could resolve the matter.
"The government again asserts that these depositions should not proceed until resolution of all of the trials in the criminal case," the filing states, adding that at least eight more defendants are awaiting trial.
The 2012 outbreak was caused by fungus laden steroids shipped by NECC to health providers in some 20 states.
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3rd Distribution Possible for Outbreak Victims

By Walter F. Roche Jr.

Although most victims of a deadly 2012 fungal meningitis outbreak are still awaiting a first check, a court filing this week indicates  a third check may be forthcoming eventually.
In an 11-page report filed this week in U.S. District Court in Boston, Mass., lawyers for victims said a third payment could result if the former owners of a defunct drug compounding firm succeed in getting tax refunds.
The refunds would go to the former owners of the New England Compounding Center, the Framingham, Mass. company blamed for the outbreak. NECC shipped fungus laden steroids to health providers across the country.  The outbreak sickened 778 patients. Seventy-seven of them have died.
NECC's owners have agreed as part of a bankruptcy settlement to transfer any tax refunds to a trust fund set up to benefit victims and their survivors.
"There remains a possibility under the bankruptcy plan that the principles of NECC will receive tax refunds related to their payment into the NECC bankruptcy plan," the report from attorney Kristen Johnson states, adding that those refunds would then be passed along to victims in a third distribution.
Johnson also reported that victims should be receiving a second check sometime this summer.
Johnson, who serves on a committee representing plaintiffs in the ongoing litigation, also reported that a request for some $6 million in attorney fees will be submitted for court approval. That represents the second half of some $12 million in so-called common benefit fees for attorneys who handled key aspects of the litigation. The first payment was made late last year.
She said the second payment would not be issued until more than half of the victims have received a second check.
In a separate report filed this week, the trustee of the victims' fund reported that thus far more than 2,000 checks have been issued to victims totaling $81.9 million
The filings come in a once massive case before U.S. District Senior Judge Rya Zobel. Claims by victims from across the country were merged in her court.
According to Johnson's report, however, dozens of those suits have been resolved, while others have been sent back to state courts. Most of the suits were filed against the clinics or other health care providers who injected patients with fungus laden steroids from NECC.
According to her report, claims by victims against clinics in Michigan and Virginia have been settled or dismissed.
Claims against one New Jersey clinic have been sent back to state courts for resolution, while claims against a second New Jersey clinic have been settled.
Zobel may still have to preside over cases against clinics in Maryland and Tennessee. However, suits against a Nashville Tenn. facility have been settled.
Johnson reported that within 30 days attorneys in the Nashville cases will be submitting a request for fees that will also come out of the settlement. The amount of that settlement has not been made public.
"The Plaintiffs Steering Committee hopes this will not be a contested motion," the report states.
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Cadden Moves to Bar Deposition in TN Cases

By Walter F. Roche Jr.

A former drug company executive facing sentencing on racketeering and mail fraud charges is asking a federal judge to shield him from being deposed under oath in related civil cases.
In a motion filed today in U.S. District Court in Boston, Mass. Cadden's lawyers asked U.S. District Court Judge Rya Zobel to deny a motion filed by Tennessee clinics seeking to depose Cadden and others in pending civil litigation.
Citing Cadden's pending motion for a new trial in the criminal case along with expected appeals, the filing states that "although the criminal trial has concluded, the criminal charges against him are far from resolved."
As the filing by attorney Callan Stein notes, Cadden is scheduled for a sentencing hearing before U.S. District Judge Richard G. Stearns on June 29.
"Mr. Cadden has not yet been sentenced, thus, judgment has not yet even entered on the charges against him," the filing states.
The move to depose Cadden comes in a series of pending suits against Tennessee clinics where some victims of the outbreak were injected with contaminated NECC steroids. The clinics are also seeking to depose officials of the U.S. Food and Drug Administration and a former sales executive at Cadden's company who has entered a guilty plea to a related charge.
The Cadden filing also argues that if Cadden's motion for a new trial or acquittal is granted in whole or in part, the result could be a new trial on some of the pending counts.
The former head of the New England Compounding Center was convicted on 57 counts of racketeering, conspiracy and mail fraud in late March.
The jury cleared Cadden on 25 counts of second degree murder.
The filing states that Cadden has yet to exercise his rights to appeal to a higher court. In addition while his trial has ended "the criminal charges arising out of this case are not close to being resolved."
Cadden's lawyers asked that an existing order barring Cadden's deposition in the civil litigation remain in effect.
Cadden was one of 14 indicted following a two year investigation of the 2012 fungal meningitis outbreak.  The outbreak, state and federal regulators concluded, was caused by thousands of vials of contaminated steroids shipped by NECC to health facilities across the country.
Trials for other defendants are set to begin in September.