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.
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