One NECC Appeal Denied

By Walter F. Roche Jr.

A federal judge today denied the appeal of a former worker at a now defunct drug compounding company who was convicted late last year on six counts of violating the federal Food Drug and Cosmetic Act.
In a six-page ruling U.S. District Judge Richard G. Stearns rejected all three of the arguments raised in Alla Stepanets appeal. Stearns said higher court rulings barred him from granting the appeals.
Stepanets was a pharmacist at the New England Compounding Center, the company blamed for a nationwide fungal meningitis outbreak. She was one of five former NECC employees found guilty following a 10 and a half week trial ending on Dec. 13, 2018.
Gregory Conigliaro, who was a 10 percent owner of NECC and a company vice president, has also appealed his conviction on a single charge of conspiracy to defraud the U.S. Food and Drug Administration.
Both Conigliaro's appeal, along with that of a third defendant, Sharon Carter, were the subject of a hearing earlier this week, but Stearns has yet to rule on those matters.
Stepanets was employed at NECC as a pharmacist and her duties included checking outgoing orders. She had argued that her job was simply clerical, but the First Circuit Court of Appeals already had rejected that argument and overruled Stearns dismissal of some of her charges.
"While I remain sympathetic to the argument," Stearns wrote, "Because the First Circuit ruling is definitional and not subject to differential fact-finding at trial, I am bound by the law of the case doctrine."
Stearns cited a U.S. Supreme Court ruling in denying Stepanets' parallel request for a new trial.
Noting that granting a new trial is rarely used, Stearns said until the Supreme Court reverses itself he remains bound by their precedent.
Stepanets is scheduled for sentencing on May 8.

NECC Owner Wants Verdict Tossed

By Walter F. Roche Jr.

BOSTON- Lawyers for two recently convicted defendants asked a federal judge today to overturn unanimous jury verdicts and toss out the charge that their clients conspired to defraud federal regulators while working at a now shuttered drug compounding company.
In a 90-minute hearing in U.S. District Court the lawyer for Gregory Conigliaro, who was president and part owner of the New England Compounding Company, said federal prosecutors were "grasping at straws" and raising arguments never raised in the eight week jury trial that ended Dec. 13 of last year.
Daniel Rabinowitz said it was a "legal impossibility" for Conigliaro to defraud the U.S. Food and Drug Administration because the agency itself had chosen not to regulate drug compounders like NECC.
Michael Pineault, the attorney for co-defendant Sharon Carter said the FDA "intentionally chose not to assert its authority over companies like NECC."
Conigliaro, Carter and three others connected to NECC were convicted by a jury after an eight week trial. The charges ranging from racketeering to mail fraud and conspiracy followed a two year probe of the deadly 2012 fungal meningitis outbreak which ultimately took the lives of more than 100 patients in more than 20 states.
U.S. District Judge Richard G. Stearns took the appeals under advisement but not before stating that he liked the argument raised by Pineault about the FDA's decision not to exercise its authority over drug compounding firms which were licensed by state pharmacy boards.
Carter was an operations manager at NECC and Assistant U.S. Attorney George Varghese called her "the enforcer" who oversaw the processing of hundreds of prescriptions with phony names.
All the while, Varghese said, Carter had a manual at her work station clearly spelling out the requirement for a valid patient specific prescription.
Varghese said evidence presented at last year's trial showed clearly that Conigliaro misrepresented to state and federal regulators what was actually going on at NECC.
He said evidence showed that Conigliaro, as far back as 2004, was telling the FDA that NECC issued drugs only with valid patient specific prescriptions.
Citing the six and a half days of "careful" deliberations, Varghese said there was "absolutely no reason to overturn the jury's verdict."
"The jury does not have carte blanche," Pineault countered, adding there was no evidence his client ever joined the conspiracy.
Varghese charged that other courts have concluded that the so-called "legal impossibility" defense does not apply to the type of conspiracy charges faced by Conigliaro and Carter.
The arguments followed by just one day the arraignment of two other NECC officials in Livingston County Michigan on second degree murder charges. Barry Cadden, who was NECC's president and part owner, and supervisory pharmacist Glenn Chin were each charged with 11 counts of second degree murder in the deaths of 11 Michigan victims of the 2012 outbreak.
The two are already serving federal prison sentences following their convictions on racketeering and mail fraud charges. The federal jurors, however, did not convict the two on second degree murder charges in the deaths of patients from Tennessee, Michigan and five other states.
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Cadden, Chin Arraigned on Murder Charges

By Walter F. Roche Jr.

The president and a supervising pharmacist of a defunct drug compounding firm blamed in the deaths of more than 100 patients were arraigned today in Livingston District Court in Howell. Mich. on second degree murder charges.
The two appeared via a teleconference before Magistrate Jerry Sherwood. Several victims of the 2012 outbreak were on hand for the brief session.
Both face 11 counts of second degree murder under charges filed late last year.
Cadden was represented by local attorney Jerry Gleason while Chin said he could not afford a lawyer. The court will appoint someone to represent him.
Chin asked for the charges against him to be read, while Cadden waived a reading.
"I was surprised at the wave of emotion that washed over me as the charges were being read. It brought me back to my stay in the hospital. As I heard about other people dying I wondered why I was still alive," said Brenda Bansale, one of the victims who attended the hearing.
The two defendants were brought to Michigan last week from separate federal prisons in Pennsylvania where they are serving sentences following their conviction on related racketeering and mail fraud charges.
The two will remain in custody in Michigan pending hearings scheduled for early next month.
Following those sessions Cadden will be transported back to the federal prison in Loretto, PA. while Chin will be returned to the federal prison in Allenwood, PA.
Chin is serving an eight year sentence, while Cadden was given a nine year sentence on the federal charges.
Cadden was president and part owner of the New England Compounding Center. Chin was a supervising pharmacist at NECC and oversaw operations in the clean room where the contaminated drugs were prepared.
The second degree murder charges were filed late last year by then outgoing Attorney General Bill Schuette. Cadden and Chin were also charged with second degree murder as past of a racketeering indictment brought by federal prosecutors, but two separate juries cleared them of those charges.
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Chin, Cadden Arraignments Moved Up

By Walter F. Roche Jr.

The arraignment of Barry Cadden and Glenn Chin on multiple second degree murder charges in Michigan has been re-scheduled and is now set for Monday in Livingston County Michigan District Court before Magistrate Jerry Sherwood..
The arraignment had been set for March 1, but was re-set after the two defendants were sent from separate federal prisons in Pennsylvania where they are serving prison sentences following their conviction on federal racketeering and mail fraud charges.
The Michigan charges stem from the 2012 fungal meningitis outbreak which killed more than 100 patients in 20 states, including at least 19 in Michigan.
The two defendants are expected to enter not guilty pleas.
Chin is currently serving an eight year sentence at a federal prison in Allenwood, PA. while Cadden is serving a nine year sentence in Loretto, Pa.
Cadden was president and part owner of the company blamed for the outbreak while Chin was a supervising pharmacist.
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NECC Convictions Face Key Challenge

By Walter F. Roche Jr.

A key face-off will come next week (Tuesday Feb. 26) when attorneys for two convicted defendants in the probe of a deadly 2012 fungal meningitis outbreak attempt to convince a judge to toss and overturn the unanimous decision of 12 jurors who sat through an eight week trial late last year.
Attorneys for Gregory Conigliaro and Sharon Carter are asking U.S. District Judge Richard G. Stearns to acquit them of the charge that they conspired to defraud the U.S. Food and Drug administration by insisting that the New England Compounding Center was a small family run pharmacy filling individual prescriptions for specific patients and subject only to state regulation.
Both Carter and Conigliaro have argued that there was no way they could deceive the FDA because, at the time, top officials at the agency were unsure of their authority over compounding pharmacies.
Federal prosecutors have countered stating that Conigliaro deliberately lied about the operations of his employer, the New England Compounding Center. NECC, they contend, was not a small local company but a large scale drug manufacturer sending out thousands of prescription drugs without required prescriptions.
The purpose of their deceit, prosecutors say, was to avoid the much tighter scrutiny that would come from the FDA and its legion of inspectors.
NECC, a now defunct Framingham, Mass. company, has been blamed for the 2012 fungal meningitis outbreak which sickened nearly 800 patients, over 100 of whom are now dead. Those illnesses were caused by NECC steroids heavily contaminated with deadly fungi.
Conigliaro was a part owner and vice president of NECC, while Carter who was an NECC pharmacy technician. They were among six to go on trial late last year. Five of the six were convicted in verdicts delivered on Dec. 13.
Two others indicted in the original probe, Barry J. Cadden and Glenn A. Chin, already are serving federal prison terms following their conviction on racketeering and mail fraud charges. Cadden and Chin also are facing second degree murder charges in the death of 11 patients from that state. Their arraignment is scheduled for Monday in Livingston County Michigan.
In his motion for acquittal or a new trial, Conigliaro argued that the conspiracy charge cannot be upheld because trial testimony and evidence showed the FDA and its top officials didn't know at the time what if any authority the agency had over drug compounders. Stearns, in an order setting the hearing, had indicated "an interest" in that argument.
Carter's attorney has raised the same argument dubbed the "legal impossibility" defense.
Stearns previously dismissed the charges against Carter, but that decision was overturned by the First Circuit Court of Appeals.
Conigliaro and Carter have both also argued that their cases were prejudiced by evidence introduced against the co-defendants. In his motion for a new trial Conigliaro charged that prosecutors presented "weeks and weeks of testimony" that were completely irrelevant to the charge against him.
They both also have argued that their roles at NECC were minimal with Carter contending that her role, to check outgoing orders,was primarily clerical.
Prosecutors have countered by showing Conigliaro's interactions with state and federal regulators and noting that Carter routinely approved for shipment drugs prescribed for obviously fictitious patients. Patient specific prescriptions were required under state law.
"The evidence at trial was legally insufficient for any rational trier of fact to conclude that the government proved beyond a reasonable doubt that Mr. Conigliaro intended to defraud the FDA," his filing concludes.
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Prosecutors: NECC Conspiracy Evidence "Overwhelming"

By Walter F. Roche Jr.

Citing overwhelming evidence of a conspiracy to defraud federal regulators, prosecutors charged that even in the face of an unfolding national tragedy, officials of a Massachusetts drug compounding firm were not motivated to "come clean."
The charges were included in a 30-page filing urging a federal judge not to overturn the unanimous guilty verdict issued late last year against Gregory Conigliaro, who was vice president and part owner of the company blamed for the deadly 2012 fungal meningitis outbreak.
Citing evidence and testimony in the eight week trial that ended in early December, Assistant U.S. Attorneys Amanda Strachan and George Varghese, said Conigliaro lied repeatedly to both state and federal regulators, insisting the the New England Compounding Center only issued drugs in response to individual prescriptions written for specific patients.
Conigliaro, the brief states, made those representations when he knew NECC was actually distributing drugs in bulk.
Rejecting Conigliaro's argument that there could be no conspiracy because the U.S. Food and Drug Administration was confused about its authority, prosecutors cited trial testimony of Janet Woodcock, a top FDA official, who told jurors that NECC was acting as a manufacturer, thus making it subject to FDA oversight.
Citing Conigliaro's role in ordering the mass production of fraudulent prescriptions for drugs already shipped to a Boston eye hospital, prosecutors said neither state nor federal regulators could determine what NECC was actually up to.
"As a result of this fraudulent prescription scheme, the FDA did not get a true understanding of the scope of NECC's business practices until it was all over," the filing states.
According to the prosecutors it wasn't until the outbreak became public and NECC's drugs were recalled that the FDA was able to uncover the thousands of fraudulent prescriptions.
"NECC's fraud had in fact succeeded. The evidence at trial demonstrated not only was it factually possible to defraud the United States, it actually occurred," the prosecutors stated.
In addition prosecutors cited federal appeals court rulings concluding that "a conviction of defrauding the United States does not require underlying unlawful activity."
The brief also argues that Conigliaro should not be granted a new trial because of prejudicial evidence presented at the trial. Prosecutors said evidence of Conigliaro's profits from NECC operations were limited as was testimony and evidence about the deadly fungal meningitis outbreak caused by NECC's fungus infested steroids.
The outbreak took the lives of over 100 patients among some 800 who were sickened in more than 20 states.
Conigliaro's motion for acquittal or a new trial is scheduled for a Tuesday hearing before U.S. District Judge Richard G. Stearns.
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Cadden, Chin Due In Michigan for Arraignment

By Walter F. Roche Jr.

The two officials of a defunct drug compounding company already serving jail terms for their roles in a deadly 2012 outbreak are headed to Michigan this week where they will be arraigned on 11 counts of second degree murder.
Cadden was expected to arrive at the Livingston County Jail Thursday while Chin is due to arrive a day later, according to Kelly Rossman-McKinney, spokeswoman for Michigan Attorney General Dana Nessel
Chin was en route from the federal prison in Allenwood and Cadden will be traveling from the federal prison in Loretto. Both prisons are in Pennsylvania.
Their arraignments are scheduled for March 1 at 8:30 a.m.
The two were charged late last year by then outgoing Michigan Attorney General Bill Schuette, following a lengthy probe of the outbreak which took the lives of more than 100 patients. At least 19 Michigan patients died including the 11 cited in the second degree murder charges.
Chin and Cadden were convicted of racketeering and mail fraud charges in separate trials in federal court in Boston, Mass. Cadden was given a nine year sentence, while Chin is serving an eight year term.
Both Cadden and Chin were cleared of second degree murder/racketeering charges during their separate federal jury trials.
In the upcoming Michigan case they were charged in the deaths of Donna Kruzich, Paula Brent, Lyn Laperriere, Sally Roe, Mary Plettl, Gayle Gibson, Patricia Malafouris, Emma Todd, Jennie Barth, Ruth Madouse and Karina Baxter. Malafouris, Barth and Madoose were not included in the federal murder charges.
Cadden was president and part owner of the New England Compounding Center, the company that shipped thousands of contaminated vials of a spinal steroid to health providers across the country. Chin was a supervising pharmacist at NECC and was in charge of the clean room where the fungus laden drugs were prepared.
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NECC's Conigliaro Faces New Probe

By Walter F. Roche Jr.

A part owner of a defunct drug compounding company is facing a probe from a Massachusetts regulatory board that could place his real estate license in jeopardy.
The Massachusetts Board of Real Estate Brokers and Salesmen voted this week to open an investigation into Gregory Conigliaro, who already is facing sentencing following his conviction on federal charges that he conspired to defraud the U.S. Food and Drug Administration.
Conigliaro was part owner of the New England Compounding Center, the company blamed for a deadly 2012 fungal meningitis outbreak.
Conigliaro was granted a real estate salesman's license by the Massachusetts board in early December of 2014, just weeks before he and 13 others were indicted by a federal grand jury following a two year probe of the outbreak.
His license as a salesman was issued Dec. 7, 2014 and is due to expire on Nov. 24, 2020
Four other NECC defendants, who were convicted late last year, already were facing investigations by the Massachusetts Board of Pharmacy. Those defendants were licensed as pharmacists or pharmacy technicians.
Gene Svirskiy, Christopher Leary, Alla Stepanets and Sharon Carter were convicted on charges ranging from racketeering to conspiracy and mail fraud. Joseph Evanosky, a pharmacist and former NECC employee who was also indicted, was cleared of charges and is not subject to a pharmacy board inquiry.
Leary, Svirskiy and Stepanets are licensed pharmacists, while Carter is a registered pharmacy technician.
Conigliaro has filed a motion asking U.S. District Judge Richard G. Stearns to overturn the jury's guilty verdict. A hearing on that motion and a similar motion filed by Carter is scheduled for Feb. 26.
Conigliaro was a 10 percent owner of NECC and a sister firm, Ameridose. Prosecutors were barred from telling jurors during the 2018 trial that he earned some $20 million from the two firms over a six year period. Like NECC Ameridose was shutdown in late 2012.
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Prosecutors: NECC Convictions Must Stand

By Walter F. Roche Jr.

Federal prosecutors today asked a federal judge to deny motions for acquittal filed in behalf of three pharmacists convicted last year on charges stemming from the probe of a deadly 2012 fungal meningitis outbreak.
Charging that the petitions for acquittal or a new trial simply rehashed arguments already rejected during the eight week trial, the prosecutors said the jury's guilty verdicts against Gene Svirskiy, Christopher Leary and Alla Stepanets should stand.
The three were employed at the New England Compounding Center, which was shuttered in the wake of the outbreak which took the lives of more than 100 patients who had been injected with contaminated steroids shipped by NECC.
The three were not charged, however, with playing any role in the specific drug blamed for the outbreak but for producing and shipping other contaminated, mislabeled and untested drugs to health facilities from Florida to upstate New York.
Svirskiy and Leary were convicted on charges of racketeering, conspiracy, mail fraud and violations of the Food Drug and Cosmetic Act, while Stepanets was convicted on six counts of violating the Food Drug and Cosmetic Act.
In the Friday filings Assistant U.S. Attorneys George Varghese and Amanda Strachan wrote that none of the arguments raised in the acquittal motions "justify the extraordinary step of overturning the jury's verdict in this case."
Citing the motion filed in behalf of Svirskiy, the prosecutors said, "The jury was presented with abundant evidence of Svirskiy's "knowing participation in NECC's fraudulent scheme."
And, they argued, the fact that the pharmacists never actually interacted with any of NECC's customers was irrelevant.
Cited were internal emails copied or sent to Svirskiy and Leary detailing repeated sterility and other problems in the clean room where they worked. The emails also showed the defendants were aware untested products were being shipped to customers despite promises to the contrary.
Svirskiy had also argued that he was prejudiced when U.S. District Judge Richard G. Stearns barred testimony about racial slurs and anti Semitic statements made by co-defendant Glenn Chin.
Stearns concluded the statements would just inflame "for no particular reason."
Chin was convicted in a separate trial and is currently serving an eight year prison term.
Labeling some of the arguments "the last gasp of the convicted," the prosecutors added, "There was absolutely nothing wrong" with the prosecutions closing arguments in the trial that ended in early December.
In Stepanets' case, prosecutors said claims that her role at NECC was merely clerical were disproved by evidence and testimony during the trial. They noted she approved for shipment drugs prescribed for
obviously fictitious patients such as L.L. Bean and Filet O' Fish.
The three were convicted along with Gregory Conigliaro and Sharon Carter in last year's trial. They also have filed motions for acquittal or a new trial and a hearing is scheduled for Feb. 26. Two final NECC defendants are scheduled for trial in March.
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