NECC Appeals Argued in Boston

"< By Walter F. Roche Jr." "Members of a three judge federal appeals court panel today raised repeated questions about the convictions of three former pharmacists who were convicted in the wake of the deadly 2012 fungal meningitis outbreak." "The questions arose in the appeals filed in behalf of the three former pharmacists who were employed by the now defunct New England Compounding Center, the company blamed for the outbreak which ultimately took the lives of more than 100 patients." "The three former pharmacists, Gene Svirskiy, Christopher Leary and Alla Stepanets were convicted on charges ranging from racketeering to mail fraud and violations of the Food Drug and Cosmetic Act." "Picking up on arguments raised by Leary's lawyer, Paul Kelly, the panel grilled U.S. Department of Justice Attorney Ross Brandon Goldman, about what evidence was presented in the U.S.District Court case that showed Leary even knew about the marketing materials that were used by NECC's sales force." ""There was no evidence he (Leary) was aware of the marketing materials," Kelly aserted."" "Goldman responded stating that Leary was a licensed pharmacist and would have known that NECC boasted of its compliance with requirements of a national standard for compounding pharmacies." "He noted that evidence showed that Leary allowed NECC drugs to be shipped well before any sterility test results could be completed. While the tests took 14 days, the drugs were shipped two days after they were processed, he said. "The three were among 14 people connected to NECC who were indicted in 2014 following a two year federal probe of NECC and the outbreak. Svirskiy, who is serving a 2.5 year federal prison sentence was convicted on charges of racketeering, conspiracy and mail fraud. Leary was convicted on charges of mail fraud and introducing misbranded or adulterated drugs into interstate commerce. He was sentenced to eight months of home detention. Stepanets was charged with distributing misbranded drugs into interstate commerce and was sentenced to a year of probation. None of the three were charged with producing the drugs that actually caused the 2012 outbreak. The three judge panel questioned Goldman about the Stepanet charges and noted that her lawyer had argued that there was no evidence that she ever saw the phony patient names that were used on NECC's order forms. Judge O. Rogeriee Thompson asked Goldman what evidence there was to show Stepanets knew about the phony names. Goldman cited trial testimony by an official of the Massachusetts Board of Pharmacy who told jurors that as a licensed pharmacist Stepanets would be required to verify the existence of a valid patient specific prescription and not a prescription made out for Wonder Woman, as shown during the trial. "They are not valid prescriptions," Goldman said. Contact:wfrochejr999@gmail.com

NECC RXs Appeal Their Convictions

By Walter F. Roche Jr.

Three former pharmacists for a defunct drug compounding firm are appealing their convictions on racketeering, conspiracy, mail fraud and related charges and will bring their cases later this week before a three judge federal appeals court panel in Boston.
All three were employed by the New England Compounding Center, the company blamed for a 2012 fungal meningitis outbreak that ultimately took the lives of over 100 unsuspecting patients. But Gene Svirskiy, Christopher Leary and Alla Stepanets were not charged with producing the drugs causing the outbreak but their role in producing other drugs that were adulterated, misbranded or prescribed for fictitious patients.
Alla Stepanets is appealing her conviction on multiple charges of introducing misbranded drugs into interstate commerce.
There was no evidence, her lawyer John Cunha argued in a recent brief, that she ever even saw the prescriptions made out for obviously fictitious patients like Filet O Fish. It wasn't her job to check patient names but to check that the correct drugs were being shipped.
"There was insufficient evidence to convict Ms. Stepanets," the brief concludes.
Svirskiy, who was convicted on racketeering, conspiracy and mail fraud charges, is serving a 30 month sentence in federal prison. His lawyer, Jeremy Sternberg, noted in a brief, that the charges against Svirskiy "had nothing to do" with the fungal meningitis outbreak.
And, he wrote, that Svirskiy never even met NECC's clients and therefore, could not have misrepresented to those health care providers the quality of NECC's products.
Svirskiy recently tried to get an early release from prison due to the Covid-19 pandemic, but his effort was rebuffed. He is scheduled to be released from federal prison on Aug. 26 of next year. Paul Kelly, Leary's lawyer, wrote that his client, like the other NECC employees "took cleaning very seriously."
Leary was convicted on charges of mail fraud and introducing misbranded or adulterated drugs into interstate commerce. He was sentenced to eight months of home detention.
Arguing that there was insufficient evidence to convict his client on mail fraud charges, Kelly wrote that Leary had no financial interest in NECC and had no knowledge of what NECC sales representatives were telling the company's client.
The hearing is set to be heard Thursday in the First Circuit Court of Appeals in Boston.
Contact: wfrochejr999@gmail.com

Third Payment to Victims in March

By Walter F. Roche Jr.

Victims of the 2012 fungal meningitis outbreak can expect checks totaling a little over $11 million in March of 2021, according to attorneys involved in distributing the remaining funds.
The $11 million is currently being held in escrow and still could face a challenge from the IRS.
The money represents a portion of the tax refunds gained by the former owners of the New England Compounding Center, the defunct company blamed for the deadly outbreak.
Paul Moore, the Boston attorney who oversaw the bankruptcy, said that in addition to the $11 million in escrow, another $425,000 has been released from escrow and has been forwarded to Lynne Riley, who is in charge of the distributions.
The tax refund money going to victims was part of a settlement reached in the bankruptcy.
Riley said the distributions will begin once the deadline for the IRS to challenge the refunds has passed. That will occur in March of 2021.
The $11 million is in addition to the nearly $100 million already distributed in two waves of payments to some 2,027 victims.
Still other payments totaling $48.8 million have gone to victims who were injected with tainted methylprednisolone acetate at three clinics, Inspira Health, Insight Imaging and the High Point Surgery Center.
Contact: wfrochejr999@gmail.com

Chin Offered Settlement on RX License

By Walter F. Roche Jr.

A former pharmacist at a drug compounding firm blamed for a deadly outbreak has been offered a settlement under which she can retain her license but with a series of restrictions.
The settlement offer, which was approved by the Massachusetts Board of Pharmacy on Friday, has yet to be acted on by Kathy S. Chin.
Chin was convicted on four felony counts of violating the Food Drug and Cosmetic Act and sentenced to two years probation. She was one of 14 people connected to the now defunct New England Compounding Center who were indicted in 2014 after a two year probe of the 2012 fungal meningitis outbreak.
Chin, whose husband Glenn is already serving an eight year sentence for his role at NECC, was charged with approving the shipment of drugs for obviously fictitious patients, like Filet O Fish and Flash Gordon.
Under the proposed settlement Chin would be barred from doing any drug compounding and would have to work under the supervision of another pharmacist. That supervisor would be required to file quarterly reports on her performance.
In addition she would not be allowed to act as a pharmacist in charge and would be in probationary status for three years. She would first have to pass a multi-state pharmacy exam.
Glenn Chin, who was a supervisory pharmacist at NECC, was convicted on racketeering, conspiracy and mail fraud charges.
According to federal prosecutors over 100 patients injected with NECC drugs ultimately died. The drugs were contaminated with a deadly fungus.

Cadden, Chin Guilty Verdicts Upheld

By Walter F. Roche Jr.

A federal appeals court in Boston, Mass. today upheld the 2017 conviction of the former head of a drug compounding company blamed for a deadly outbreak and left open the possibility that his nine year prison sentence could be increased and a $7.5 million forfeiture order increased.
In the 87-page decision the three judge panel rejected a series of arguments raised by lawyers for Barry J. Cadden, challenging various aspects of his conviction on racketeering, conspiracy and mail fraud charges. He is currently serving a nine year federal prison sentence and is awaiting trial in Michigan on second degree murder charges.
Examining the multiple challenges to Cadden's conviction the appeals panel concluded that a reasonable jury could have reached the same guilty conclusions.
Also upheld was the conviction of Glenn Chin, who was a supervising pharmacist at the same drug compounding firm.
While the court commended U.S. District Court Judge Richard G. Stearns for his handling of this "extremely complex case," the appeals court cited several errors by the judge who presided over Cadden's 2017 trial.
In one finding the court concluded that Stearns committed an error of law when he ruled that the victims of Cadden's crimes were limited to the health providers who purchased tainted drugs from the New England Compounding Center, the company blamed for the deadly 2012 fungal meningitis outbreak which ultimately took the lives of more than 100 patients.
"The district court determined that the patients were necessarily not victims at all," Barron wrote.
As a result the court never even considered whether they met the definition of vulnerable.
"The victims of that conduct could plausibly be the patients," the ruling states.
Under the decision the issue of vulnerability will be sent back to Stearns.
Also remanded to the district court were challenges to Stearns' sentence including whether Cadden should have had his sentence enhanced because his actions put patients in the risk of death.
While upholding all the convictions, the appeals court cited two actions by federal prosecutors during the trial that drew charges of prosecutorial misconduct from Cadden's lawyer, Bruce Singal.
"The most troubling allegation," the court said involved the testimony of a witness from a Michigan pain clinic, Wendy Huffman.
She testified that Cadden called her on Sept. 21, 2012 to tell her that fungus tainted drugs had been shipped by NECC. Other trial testimony showed that Cadden didn't call other clinics till several days later.
Ultimately records showed there were no calls from NECC to the Michigan clinic on Sept.21/
"The Hoffman testimony was potentially damning," the appeals court found adding that it shared concerns expressed by Stearns about the prosecution's conduct in presenting her testimony.
But the panel concluded that the jury ultimately was not swayed by Huffman's testimony.
The appeals court also cited allegations that the prosecution had a binder delivered to the jury room without the knowledge of Stearn's lawyers or the judge.
"It is troubling that this binder made its way into the jury for deliberation unbeknownst to Cadden or the district court," Barron wrote, adding that prosecutors at first claimed not to know where the binder was.
The panel concluded, however, that the contents of the binder was not prejudicial and summarized other evidence in the jury's hands.
On the sentencing issue the panel sent the issue back to Stearns to reconsider whether the nine year sentence should be enhanced because of the vulnerability of the victims and the fact that Cadden's actions put victims at the risk of death.
As for the forfeiture order the appeals court found that Stearns erred in not considering the millions of dollars Cadden's wife earned as part owner of NECC.
"At least some of her earnings can be traced to fraudulent sales," Barron wrote noting that her earnings went into a joint account with her husband.
In the Chin decision the appeals court also remanded the sentencing and forfeiture orders to Stearns for reconsideration on similar issues raised in the Cadden case. Chin too, could face a longer prison sentence and additional financial penalties.
Contact:wfrochejr999@gmail.com

Svirskiy Still in Federal Custody

By Walter F. Roche Jr.

In an apparent reversal federal officials have decided that a defendant in the criminal case stemming from a deadly 2012 outbreak cannot serve the remainder of his sentence under home confinement and he remains in a federal prison in Massachusetts.
Officials of the federal Bureau of Prisons said today that Gene Svirskiy, 39, will remain at the federal prison at Fort Devens to serve the remainder of his sentence.
Victims of the outbreak had been notified last month that Svirskiy, who was convicted of racketeering, conspiracy, mail fraud and violations of the Food Drug and Cosmetic Act, would be released on July 1 and after a brief stop at a halfway house, would be under house arrest at his Ashland, Mass. home to serve the remaining months of his 2.5 year sentence.
"Gene Svirskiy has a projected release date of Aug. 26, 2021 and is in the custody of the Federal Bureau of Prisons at the Federal Medical Center Devens," BOP spokesman Emery Nelson wrote in an email response to questions.
Svirskiy's attorney did not respond to a request for comment
Svirskiy was one of 14 people connected to the now defunct New England Compounding Center who were indicted following a two-year probe of the deadly 2012 fungal meningitis outbreak. Svirskiy, who was working as a licensed pharmacist was not charged with making the contaminated drugs that caused the outbreak but for other violations of federal law.
Lawyers for Svirskiy had asked U.S. District Judge Richard G. Stearns to allow Svirskiy to serve out his sentence under home confinement because of a coronavirus outbreak at the prisons. Federal prosecutors opposed the motion, noting that Svirskiy was in a separate section of the prison than the one where the infected prisoners were held.
Stearns denied the motion concluding that under federal law he could not grant the request.
Nonetheless victims of the outbreak were subsequently notified by email that Svirskiy would be released and allowed to complete his sentence under house arrest.
Victims contacted today said they had not been informed of the reversal.
Contact: wfrochejr999@gmail.com