Friday, April 30, 2021

Prosecutors Seek $82 Million, Boosted Sentences

By Walter F. Roche Jr.

Federal prosecutors are asking a judge to nearly double the prison sentences of two former drug company officials and order them to pay $82 million in restitution, nearly all of it going to 379 victims of a deadly fungal meningitis outbreak.
In two lengthy filings in U.S. District Court in Boston, Mass. prosecutors asked for the prison sentences for Barry J.Cadden and Glenn Chin be increased to 17.5 years.
Cadden, who was president and part owner of the defunct New England Compounding Center was originally sentenced to a nine-year term. Chin who was a supervising pharmacist at NECC, was originally given an eight-year sentence.
Citing a ruling by the First Circuit Court of Appeals, Assistant U.S. Attorney Amanda Strachan wrote that the two caused an unprecedented public health crisis that sickened nearly 800 patients and killed over 100 of them.
The filings ask that Cadden be forced to forfeit $11.2 million, up from $7.5 million, while Chin should forfeit $473,584, up from the original order of only $175,000.
In the 30-page filing on Cadden, prosecutors said he showed "an unconscionable disregard for the lives of the patients injected with his drugs."
In the 29-page filing on Chin, Strachan wrote that he was "not only a knowing and willful paticipant in NECC's fraudulent activity, he directed them."
The sentencing memorandum states that, based on the appeals court ruling, Chin's sentence should be increased for three factors including the vulnerability of the victims.
Another enhancement is justified, according to the filing, because Chin's actions put patients at the risk of death or serious bodily injury.
Enhancements cited in the Cadden filing include the fact that the victims who were injected with NECC's contaminated drugs were in fact vulnerable victims.
The filing cites a victim's impact statement submitted by Russell Rusalow, in which he described his father's "tortuous death" after treatment with an NECC drug.
Chin and Cadden were among 14 people connected to NECC who were indicted in 2014 following a two-year federal investigation of the 2012 fungal meningitis outbreak.
The filing notes that the steroids contaminated with deadly fungi were shipped to 76 facilities in 23 states. The July 7 re-sentencing session will be held before U.S. District Judge Richard G. Stearns, the judge who set the initial prison terms for both Chin and Cadden. The appeals court ruling overturned several of Stearns findings, including his decision that people sickened by NECC's drugs did not meet the legal definition of victims. Stearns concluded that the actual purchasers of NECC's contaminated drugs and health insurance companies were the only victims. The prosecution filing recommends that those purchasers and insurers get $1.9 million.
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Cadden, Chin Appeals Denied

By Walter F. Roche Jr.

Appeals to a Michigan court by two former pharmacists facing second degree murder charges have been denied in a one sentence ruling from Presiding Judge Michael F. Gadola.
Lawyers for Glenn Chin and Barry Cadden had petitioned the Michigan Court of Appeals to overturn the decision of a circuit court judge that they should stand trial on the murder charges.
The two were each charged with 11 counts of second degree murder in the deaths of 11 patients who were treated with contaminated drugs produced by the New England Compounding Center.
Cadden was president and part owner of NECC and Chin was a supervising pharmacist in the clean room where the fungus ridden steroids were produced.
In his ruling Judge Gadola wrote that the appeal was being denied "for failure to persuade the court of the need for immediate appellate review."
Under the ruling the case will now return to Livingston County for trial.
Cadden and Chin are still being held at the Livingston County Jail awaiting trial. The two already have been convicted of federal racketeering and conspiracy charges. Cadden was given a nine year prison sentence, while Chin was given an eight year sentence.
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Wednesday, April 28, 2021

2 NECC Defendants Seek Reversal of Convictions

By Walter F. Roche Jr.

Two pharmacists, who were employed by a rogue Massachusetts drug compounding firm are asking an appeals court to overturn their convictions for intentional violations of a federal drug statute.
Kathy Chin and Michelle Thomas will take their case next Wednesday (May 5) before the First Circuit Court of Appeals in Boston, Mass. The two were convicted of violating the Food Drug and Cosmetic Act with intent to defraud or deceive.
Chin, who was convicted of committing four violations of the law, charged in her appeal that she was not acting as a pharmacist when she approved the shipment of drugs precribed for fake named patients.
Through her attorney, Joan Griffin, Chin argued that she was nothing more than a shipping clerk at the New England Compounding Center, checking to see that the right drugs were being sent to the right address.
"The government has no evidence that Kathy Chin even saw a fake name," the appeal states.
Chin and Thomas were among 14 people connected to NECC who were indicted in 2014 following a two year probe of the deadly 2012 fungal meningitis outbreak caused by contaminated drugs produced by the now defunct firm.
Chin and Thomas were not involved in handling the steroids that caused the outbreak but were charged with sending out drugs prescribed for patients with names like Filet O. Fish and L.L. Bean.
Both Chin and Thomas charged that trial testimony by an official from the Masachusetts Board of Pharmacy should have been excluded. Samuel Penta testified that under Massachusetts law and regulations the two were required to certify that the drugs were being issued with legitimate prescriptions.
Griffin noted that at one point U.S. District Judge Richard G. Stearns dismissed the charges against both Chin and Thomas. His decision was reversed and the charges were reinstated by the same court now hearing their appeals.
Michael Bourbeau, Thomas attorney, noted that Thomas herself raised questions to her superiors about a name that was obviously fake. As a result, the appeal states, the name was corrected.
The appeal states that none of the evidence showed Thomas had any criminal intent.
"Neither Chin or Thomas were parties to any of the emails or discussions" in which other NECC employees discussed a scheme to ship drugs for fake named patients.
Following their convictions Chin and Thomas were sentenced to probation with no jail time.
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Friday, April 23, 2021

Upcoming Hearing Key To Outbreak Victims

By Walter F. Roche Jr.

An upcoming hearing on the resentencing of a one time drug company owner, will be of great interest to the hundreds of victims of a fungal meningitis outbreak caused by contaminated drugs shipped by that pharmacist's company.
The July 7 hearing will be key in determining whether those outbreak victims will get further payments and, if so, how much they will get.
At issue are forfeiture and restitution orders stemming from the convictions of Barry J. Cadden and others associated with the now defunct New England Compounding Center.
Federal prosecutors say Cadden and other NECC figures should forfeit a total of $7.5 million. They are also seeking $82 million in restitution.
Those figures were drastically reduced by U.S. District Judge Richard G. Stearns who also concluded that the hundreds of outbreak victims did not meet the applicable definition of victims under federal law and thus were entitled to no restitution.
The First Circuit Court of Appeals rejected Stearns reasoning on both counts and remanded the case to Stearns who had concluded "Reality casts a cold light" on the $82 milllion figure sought by prosecutors.
Stearns deferred a final decision on restitution pending the results of the cases against the other NECC defendants. With the First Circuit decision issued last year, the restitution issue is back before Stearns.
The circuit court also disputed Stearns conclusion that the outbreak victims did not meet the requirements of the federal law. They also disputed his conclusion that the outbreak victims were not vulnerable victims under federal law.
As a result Stearns will also have to reconsider the $1.4 million restitution order he had issued and reconsider the $82 million proposed by the U.S. Attorney.
Any awards to victims from forfeiture or restitution funds would be in addition to payments stemming from a victims fund established under NECC's bankruptcy. Final payments from that fund are ongoing.
At the same July hearing Stearns will be asked to consider increases in the sentences imposed on Cadden and co-defendant, Glenn Chin. The appeals panel said Stearns wrongly rejected arguments from prosecutors that both defendants should have their sentences enhanced due to so-called aggravating circumstances. Cadden was given a nine year sentence following his conviction on racketeering, conspiracy and mail fraud charges.Chin got an eight year sentence. The circuit court found Stearns reasoning in rejecting enhancements "legally erroneous."
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Thursday, April 15, 2021

Final Victims' Checks Going Out

By Walter F. Roche Jr.

The third and final payments to victims of the 2012 fungal meningitis outbreak are now being distributed, according to the attorney managing the payment fund.
Lynne Riley, the fund administrator, said Thursday some the payments have already gone out.
The final payments come from tax refunds that went to the owners of the New England Compounding Center. The owners of the now defunct Massachusetts firm agreed to turn over a portion of those refunds as part of the settlement of NECC's bankruptcy.
NECC was the source of highly contaminated steroids that caused the 2012 outbreak.
NECC's former president is now serving a nine year prison sentence following his conviction on racketering, conspiracy and mail fraud charges. Several other NECC employees were convicted of related charges.
The estimated $11.5 million in final payments are in addition to about $100 million distributed previously.
The $11.5 million had been held in escrow in the event the IRS decided to dispute the refunds. The deadline to file an appeal has now passed.
Some 2,000 victims of the outbreak are sharing in the final allotment. The payments are going out some two months earlier than originally predicted.
Contact: wfrochejr999@gmail.com

Wednesday, April 14, 2021

Cadden Could Face Increased Prison Term, Forfeitures

By Walter F. Roche Jr.

A former pharmacist implicated in a deadly fungal meningitis outbreak could have his federal prison sentences extended and financial penalties increased as a result of a federal appeals court ruling.
U.S. District Judge Richard G. Stearns has set a July 7 date for a hearing in his Boston, Mass. courtroom on whether Barry J. Cadden should face additional penalties.
The First Circuit Cout of Appeals, in an 87-page decision issued last year, said Stearns, in setting Cadden's nine year prison sentence had failed to consider whether the victims of the 2012 funagal meningitis outbreak were vulnerable victims. That in turn would bring a longer jail term.
At the same time, Stearns will hear arguments on whether co-defendant Glenn Chin's eight year sentence should be enhanced and penalties increased.
The outbreak was caused by highly contaminated drugs produced at the New England Compounding Center, where Cadden served as president and part owner. Chin was a supervising pharmacist in the clean room where the tainted drugs were produced.
"The district court determined that the patients were necessarily not victims at all," the appeals court noted.
In sending the issue back to Stearns, the appeals panel said the district court erred in not considering that the patients were not just victims but also vulnerable victims.
The appeals court also ruled that Stearns' erred in failing to consider whether Cadden's actions at NECC resulted in the conscious or reckless risk of death or serious injury.
That would, in turn, subject Cadden to a second sentence enhancement.
"The District Court should have found that the enhancement applied," the appeals court ruling states.
"Thus we remand for the District Court to do what it has not yet done; directly consider the risk of death assessment," the appeals court concluded.
As for the financial penalties, the appeals court found that Stearns erred when he concluded that Barry Cadden's wife, Lisa Cadden,'profits from NECC were completely exempt from forfeiture. She was never charged with a crime.
But the appeals court disagreed and sent the issue back to Stearns to determine how much of Lisa Cadden's NECC income was derived from illegal activities.
"We remand for the District Court to consider what amount of Lisa Cadden's earnings should be included in Barry Cadden's forfeiture order because they were tainted by racketeering activity," the 2020 ruling states.
Court records show the Caddens collected some $72 million from NECC in the six year period preceding the outbreak. In a related development, property previously owned by the Caddens has been sold and half of the $300,000 in proceeds will go to the federal government under a forfeiture agreement. The two vacant Wrentham, Mass. lots were adjacent to the Caddens former family home.
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Tuesday, April 13, 2021

Advocates Warn of Drug Compounding Loophole

By Walter F. Roche Jr.

Warning that it leaves the public subject to harmful exposure to dangerous drugs, an advocacy group is calling on the U.S. Food and Drug Administration to close a loophole that allows drug compounders to produce drugs deemed harmful or ineffective.
In a petition filed with the FDA, Public Citizen said closing the loophole was crucial to minimizing the risk to patients of harmful exposure.
Specifically the petition asks the agency to add two drugs,the weight loss drug locaserin, formerly known BELVIQ, and injectable forms of bacitracin, to the list of drugs removed from the market because they were deemed unsafe or ineffective.
Placing the drugs on that list would make it illegal for drug compounders to produce snd msrket this drug, said Michael Carome of Public Citizen.
Carome noted that the FDA already had removed those drugs from the market due to safety or effectiveness concerns.
Carome said that in the past the FDA has sometimes taken several years to place banned drugs on the official list.
"Such foot-dragging poses unacceptable and avoidable risks to patients and public health," Carome said.
Earlier this month the FDA issued notices that the two drugs were being withdrawn for sale for safety reasons. Carome noted that the FDA had asked the two manufactuers of the drugs to withdraw them from the market.
In addition to asking the FDA to act on locaserin and bacitracin, Carome asked the agency to institute a new policy requiring that when drugs are withdrawn from the market for safety and efficacy concerns, that they simultaneously be placed on the banned drug list.
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Thursday, April 8, 2021

Cadden Forfeiture Property Being Sold

By Walter F. Roche Jr.

Court approval is being requested for the sale of two lots owned by the convicted president of a defunct drug compounding firm who is serving a nine year federal prison sentence.
A motion filed in U.S. District Court in Boston, Mass. today seeks approval to sell two vacant lots in Wrentham, Mass for a total of $600,000. The lots are adjacent to the former home of Barry J. Cadden and he and his wife Lisa own the adjoining properties at 15 and 17 Manchester Drive.
The joint motion by federal prosecutors and lawyers for the Caddens calls for the lots to be sold to Brendan Duckworth and his wife, Christina. Both their names would go on one lot and the other would be in Brendan's name alone.
Under the forfeiture agreement between the Caddens and federal prosecutors half of the sale proceeds will go to the federal government and half to Lisa Cadden, who was never charged.
The forfeiture agreement was reached following Barry Cadden's conviction on racketeering, conspiracy and mail fraud charges.
The charges stemmed from a two year probe of the 2012 fungal meningitis outbreak, which was caused by contaminated drugs shipped by the New England Compounding Center the company Cadden headed.
The Cadden family home also was subject to the forfeiture order and it was sold for $1.3 million in late 2019.
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Wednesday, April 7, 2021

2012 Outbreak Murder Case in MI Appeals Court

By Walter F. Roche Jr.

Lawyers for a former pharmacist charged with 11 counts of second degree murder say the charges must be dropped because prosecutors failed to identify a particular act by the defendant that caused the deaths.
In filings with the Michigan Court of Appeals, lawyers for Glenn Chin are asking the court to overrule the decision of a Livingston County Judge who found that Chin and co-defendant Barry Cadden must stand trial on the charges.
State prosecutors from the Michigan Attorney General's office in a 27-page filing with the appeals court argued that not only did the evidence show crimes had been committed, they also showed there was probable cause to believe Chin and Cadden committed them.
The case stems from the deadly 2012 fungal meningitis caused by contaminated drugs shipped from the New England Compounding Center, where Cadden was part owner and president and Chin was a supervising pharmacist.
The deadly drugs, thousands of vials of methylprednisolone acetate, were prepared in the clean room where Chin was the supervisor. And a batch of those drugs were shipped to the Michigan facility where the 11 victims were being treated.
"He (Chin) repeatedly ignored and often promoted dangerous practices," the prosecution brief states, asserting that the district court did not abuse its discretion when it ruled that Chin and Cadden must face trial.
Citing the testimony of employees who worked under Chin's supervision, the prosecution brief states that Chin, especially in 2012, threw safety precautions aside and ordered a speedup of production.
When one employee raised questions about the consequences, the filing states, Chin repled,"That's why we have lawyers."
Citing testimony on lack of testing and the improper handling and labeling of drugs in Chin's clean room, the filing states that when federal investigators swooped down on NECC's Framingham, Mass. office, Cadden and Chin began to try to cover their tracks. Chin, for instance, was seen throwing out medications as federal investigators were closing in.
There was "ample reason to believe that but for Chin's action at NECC these deaths would have been avoided," the filing concludes.
While the Attorney General's filing was 27-pages long, the Chin brief was a brief six pages.
While admitting that prosecutors proved malice, Kevin Gentry, Chin's appeals court lawyer, wrote that malice by itself was insufficient under Michigan law.
"There must be a causal link between the defendant's conduct and the victims' injury," the filing states.
"The prosecution has not shown, nor really tried to show any particular act of the defendant that caused the deaths" the filing concludes.
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