Prosecutors Seek Probation, No Jail Time for NECC Defendants

By Walter F. Roche Jr.

Federal prosecutors in Boston, Mass. are seeking probation and fines but no jail time for the first two defendants facing sentencing in the probe of a deadly 2012 fungal meningitis outbreak.
In papers filed in advance of a Wednesday sentencing session, prosecutors are recommending that Carla Conigliaro be sentenced to one year of probation and $4,500 in fines, while her husband would face two years of probation and a $55,000 fine.
Carla Conigliaro was the majority owner of the New England Compounding Center, the now defunct Framingham, Mass.  firm blamed for the outbreak which sickened 778 patients, killing at least 77. Her husband headed a related firm that marketed NECC products to health providers across the country.
In their 11-page sentencing recommendation, prosecutors conceded that the two played no role in the day-to-day operations of NECC, but charged that they structured bank withdrawals as part of an effort to conceal assets from federal investigators even as the outbreak was reaching a crisis stage.
 They were "trying to conceal their personal wealth during an unprecedented public health crisis," the memo states.
The Conigliaros entered guilty pleas to vastly reduced charges last summer under a plea agreement approved by U.S. District Judge Richard G. Stearns. Stearns subsequently ruled that victims of the outbreak would not be allowed to testify at the sentencing hearing.
The attorney for the Conigliaros also filed papers stating that the couple should only face probation and no jail time.
"Given the extraordinary facts and circumstances of this case, the personal and family background of the defendants and the written plea agreement between the government and the Conigliaros,  sentences of probation are fair and reasonable and will assure that punishment of Carla Conigliaro and Douglas Conigliaro is sufficient but not greater than necessary," the 18-page filing by David E. Meier states.
Under the plea agreement federal prosecutors agreed to drop four additional counts from the original indictment charging the Dedham, Mass. couple with violating a federal law requiring the reporting of bank transactions exceeding $10,000.
In its filing prosecutors cited "a marked increase" in the amount of cash withdrawals by the defendants in the Fall of 2012, which "directly correlates to the fungal meningitis outbreak, the subsequent criminal investigation and the flood of litigation that ensued."
Under the plea deal Carla Conigliaro pleaded guilty to violating the structuring law with withdrawals totaling $4,600.75 while her husband admitted to $119,647 in structured withdrawals.
"They deserve to be held accountable for trying to illegally conceal these funds from the government and the bankruptcy trustee," Assistant U.S. Attorney George B. Varghese wrote in the memo.
Two other NECC executives, Barry Cadden and Glenn Chin are scheduled to go on trial early next year on charges including 25 counts of second degree murder.
Still other NECC employees and owners are scheduled for trial three months later.

Volunteer Provides "Guiding Light" for Victims

By Walter F. Roche Jr

It was a day in early Fall of 2012 when Terri Lewis accompanied her son to the Vanderbilt University Medical Center where he was scheduled to undergo spinal fusion surgery that she first heard the news.
Though the first reports indicated it was probably an isolated incident, Lewis, who holds a doctorate in rehabilitation and mental health, thought otherwise.
A case of fungal meningitis, a very rare diagnosis, had been reported by Tennessee and federal health officials.
"It came across the news feed in the waiting room. The news release ended with the comment that it was expected to be a small and inconsequential problem," Lewis recalled. "I knew that couldn't possibly be right."
From that moment on Lewis was drawn deeper and deeper into the then expanding public health crisis; first advising reporters but then, as the months grew into years, becoming the back upon which dozens of outbreak victims relied for professional advice and, perhaps more importantly, a sympathetic ear.
"Terri has been our guiding light and guardian angel since day one," said Kathy Pugh, whose mother was a Michigan victim of the outbreak. "She has been a walking library of medical knowledge and support."
Lewis' conclusion that the outbreak would be anything but inconsequential became a frightening reality in the remaining months of 2012. Ultimately some 778 patients in more than 20 states were sickened by vials of fungus riddled spinal steroids shipped by the thousands to health providers across the country. Seventy-seven of those patients died.
 Lewis' interest was heightened by the fact that due to her professional interest in pain management she already knew a lot about the spinal steroids being injected into the spines and joints of patients suffering from severe back and joint pain.
"I had been working with others on the issues involved in epidural steroid injection injuries and had been preparing testimony for hearings held by the FDA (U.S. Food and Drug Administration)," Lewis said.
Lewis joined a facebook page on the outbreak set up by the Tennessean, the Nashville newspaper, and soon took over the role as a patient advocate.
She says she has tracked approximately 360 families and individuals who asked for help, even the attorneys representing some of the victims.
"I've reviewed records, assisted with social security claims, medical evaluations and functional capacity evaluations," Lewis said.
Victims attest to the value of her assistance.
Terri has helped to educate us on all medical topics related to the NECC  (New England Compounding Center) outbreak," said Michelle Palmer, an Eastern Tennessee victim of the outbreak.
"Without her and her knowledge, caring and understanding we could never have gotten through this ordeal," Palmer added.
Jona Angst, another Michigan victim, said, "When she speaks we listen and take to heart the things she says. We may not matter to many but she makes us feel loved and that we count."
"She is our voice and our warrior," said Palmer.
Joan Peay, a Tennessee victim who endured one bout of fungal meningitis only to suffer a relapse a year later, said it was after the second attack that Lewis stepped in to help her.
"I was weak, hurting and feeling abandoned by my government," Peay said. "She was a wonderful source of knowledge and encouragement. She has been a tremendous help to many, many of us."
Lewis does have a day job.  She is a professor at a school in Taiwan, a job she had lined up before the outbreak began.
She says "digital tools" enable her to maintain her role as advocate and adviser even though she is teaching in Taiwan nine months of the year.
"I will hang in there with this until there is a resolution for these individuals," Lewis said. "Professionally, I expect to follow them as long as they will let me.
"We have to capture this learning...it has a natural history that is important to understand and characterize," Lewis, the teacher, counselor, and advocate, concluded.
Contact: wfrochejr999@gmail.com

Defendants Want Access to NECC Files

By Walter F. Roche Jr.

The defendants in the drug compounding criminal case are asking a judge to block a move to put into storage thousands of documents from the defunct New England Compounding Center gathered in a related civil case.
In a motion filed today in U.S. District Court in Boston, Mass. the attorneys for nine of the defendants said having ready access to the files of their former employer were vital for their defense in upcoming criminal trials.
"Requestors will be prejudiced if the NECC's documents are archived at precisely the time when requestors will need to subpoena documents from NECC to defend themselves," the motion states.
Two of the defendants, Barry Cadden and Glenn Chin are scheduled to go on trial on Jan. 5 on charges that include 25 counts of second degree murder. The other defendants are scheduled for trial on lesser charges beginning April 10.
The NECC trustee had sought to put the records into archives as a cost saving measure, but the defendants argued that doing so would "thwart" efforts to defend themselves.
In addition they argued that Cadden had a contractual right to access the documents under his settlement agreement in the civil case.
The motion comes on the same day U.S. District Judge Rya Zobel held a monthly status conference on the civil case. She was presented details of a report from the trustee of a $200 million fund established to benefit victims of the 2012 fungal meningitis outbreak caused by NECC.
According to the report from Lynne Riley checks have been issued for 275 victims with a value of $5.4 million or an average of a little over $19,000.
That represents about 14 percent of the total approved claims which number 1,979. According to Riley's report about 150 of those claims are being delayed because state Medicaid agencies have yet to review them for possible reimbursement claims.
Zobel indicated that she would issue an order to those state agencies if a response was not received by a mid-November deadline.
Attorneys for plaintiffs in the case reported that no objections had been filed against a proposal to pay nearly $12.5 million in legal fees for attorneys who did work for the benefit of all the NECC claimants.
In requesting those fees, the attorneys stated that they did not expect to actually receive any of those funds until the end of 2016 when victims will have received their initial awards.
"Virtually all claimants will have first received their first payments by the time the court approves an allocation," the motion stated.
Contact: wfrochejr999@gmail.com

Checks Mailed to 275 Outbreak Victims

By Walter F. Roche Jr.

The attorney overseeing the distribution of payments to victims of the 2012 fungal meningitis outbreak reported today that checks have been mailed out to 275 out of nearly 2,000 victims deemed eligible for payment.
In a report filed in U.S. District Court in Boston, Mass. Lynne Riley, the court appointed administrator of a $200 million trust fund, reported that of 1,979 victims approved for payment the checks were issued to 275, while the balance are awaiting final clearance. She said that the total value of the checks issued thus far was $5,439,512.
The report comes amid growing anxiety among victims as the fourth anniversary of the deadly outbreak has come and gone with most victims still waiting for any payments.
According to those familiar with the case, most of the checks will be going to the attorneys representing victims, not the victims themselves.
Also yesterday, the attorneys for some Tennessee victims of the outbreak, asked that a detailed report on the status of payments be provided. According to the filing only one of the two law firms' 58 clients has received a check thus far.
In her report to U.S. District Judge Rya Zobel, Riley said that a total of 2,338 claims had been filed and 372 of those had been denied.
She said 50 claims were still under review.
According to the report, certification letters have been issued for 750 victims. Riley said that some claims have been delayed while awaiting clearance by state Medicaid agencies for any possible liens. Clearance from the Medicare agency also is mandatory for all claims.
"Medicaid eligibility results have now been received for over 90 percent of those 1,199 (original) claimants, leaving approximately 150 whose Medicaid agencies in various state have not yet reported back," Riley's report states.
An additional 780 claims filed after the original deadline also await Medicare and Medicaid clearance.
The checks now being issued represent a portion of what victims can expect to receive. A second check will be sent after various expenses, including legal fees, are paid out of the same trust fund.
The payments come from funds amassed in the bankruptcy of the New England Compounding Center, the Massachusetts firm blamed for the outbreak which took the lives of 77 patients across the country.
According to court documents in a related criminal case,  a total of 778 patients were sickened in the outbreak. An owner and supervising pharmacist for NECC are scheduled to go on trial in January for 25 counts each of second degree murder, racketeering and other charges.
Other former NECC owners and employees are scheduled for an April trial.
Contact: wfrochejr999@gmail.com

Anger, Frustration Grow as Victims Wait

By Walter F. Roche Jr.

Though miles apart Jack Pavlekovich and Joan Peay have some experiences in common, experiences they both wish they never had.
Pavlekovich in Indiana and Peay in Tennessee were injected with a fungus loaded spinal steroid from the same rogue drug compounder. They both contracted fungal meningitis, underwent lengthy hospitalizations and debilitating treatment with powerful antifungal drugs.
And then they both got to go through it all over again after suffering lengthy and painful relapses.
Then, there's one other thing: Four years after it all began they, like nearly all other victims of the country's worst such outbreak in history, have yet to receive a penny in recompense even though well over $200 million has been amassed to pay back creditors and victims of that Massachusetts drug compounding firm,  the New England Compounding Center.
An additional $40 million has been set aside from a federal crime victims fund, but outbreak victims are learning that it may be months before they can expect to get anything from that allotment and even then there will be strings attached, strings that could force them to pay some or all of the money back.
"First we were promised payment in early 2015," said Pavlekovitch, "then it was March of 2015. Then it was March of 2016, then July, then August. It's October and still nothing."
 Peay, who was back in the hospital with a relapse a year after her original 2012 bout, says she is "ashamed" of the federal officials who added to the ongoing delays by, among other things, refusing to waive reimbursements to the Medicare program for the costs of treating victims.
"Some victims had to declare bankruptcy during these four years," Peay added.
One of those was Pavlekovitch, who said he had no choice but to declare bankruptcy as the copays and other uncovered expenses drained the family resources.
Four years ago today he was released from the hospital after his first bout on Oct. 31, 2012, but was back the next day with a blood clot.
Both Peay and Pavlekovich describe in excruciating details the painful and overwhelming after effects of the anitfungal drugs they were treated with. Hallucinations, pneumonia, loss of memory,, hearing loss.
"There were many times that month I thought I would die and didn't care, because I knew I'd be in a better place if I did," Peay said of her treatment for the 2013 relapse.
Peay and Pavlekov
ich aren't the only outbreak victims angered and frustrated over the delays.
Another Tennessee victim said he has been waiting weeks for a form that must be filled out before a promised payment can be made.
"We are so overwhelmed with debt that we'll never recover," said Jona Angst, a Michigan victim, adding that retirement and savings accounts "are gone."
"We keep being told it's coming but its the end of October and still nothing. It's shameful. Just nothing. It's a disgrace."
"Here it is the end of October and less than one percent of the victims have received a check," said Kathy Pugh, who actively campaigned for the $40 million that is now apparently logjammed. Pugh's mother was a Michigan victim of the outbreak.
Terri Lacey, who has served as a volunteer, troubleshooter and counselor to dozens of victims, said  that those victims are now faced with watching the little they can recover being eaten away.
"Unresolved litigation has resulted in the transfer of precious dwindling resources for recovery into the pockets of legal teams rather than patients.  What little funds might make their way to patients have been reclaimed by Medicare and insurance companies.  Patients will be left with little or nothing," she said.

2nd NECC Defendant Seeks Access to Civil Data

By Walter F. Roche Jr.

A second defendant in the criminal case stemming from a deadly national fungal meningitis outbreak is seeking access to sealed files amassed in hundreds of civil suits filed by victims of that same 2012 medical tragedy.
Glenn Chin, who has been charged with 25 counts of second degree murder, is asking a federal judge to grant him access to a vast repository of records gathered over the past four years for victims seeking recompense for their injuries.
Magistate Judge Jennifer Boal already has granted codefendant Barry Cadden permission to access some of the same records. Like Chin Cadden faces second degree murder charges as a result of an indictment issued in late 2013.
Boal's order issued late last month gives Cadden permission to use in the criminal case those documents from the repository he already had during the time he was a defendant in the civil cases. He was dismissed as a defendant in January.
Boal's brief order notes, however,  that the use will be subject to any restrictions imposed by the presiding judge in the criminal case.
It limits the access to documents placed in the repository on or before Jan. 8 of this year.
Federal prosecutors had strongly opposed Cadden's request and charged that he and his lawyers were trying to do an end run around the rules that govern federal criminal trials. They also warned that if Cadden was granted access, then all the other defendants would likely be given access.
In his motion filed late last week, Chin's lawyer Stephen Weymouth, asked to be given access to those same files that Cadden already has been authorized to utilize.
"Since the court has ordered access for Mr. Cadden, it is only fair, as argued by the U.S. Attorney. that access to those documents be permitted as to Mr. Chin," the motion states.
Cadden and Chin were among 14 persons indicted by a federal grand jury following a federal probe of the outbreak and the New England Compounding Center, the now defunct company which shipped fungus laden steroids to healthcare providers across the country.
The outbreak sickened 778 patients killing at least 77 of them.
Cadden and Chin are scheduled to go on trial early next year. The other remaining defendants face an April trial.
Chin's access motion was filed in the criminal case, but a parallel request is expected in the civil litigation.
Contact: wfrochejr999@gmail.com

Amendment Sought to Ease Payments to Victims

By Walter F. Roche Jr.

Citing the recently negotiated multimillion dollar settlement with a Nashville clinic, lawyers for victims of the 2012 fungal meningitis outbreak are asking a judge to modify an existing order to facilitate payments to victims treated at that Tennessee facility.
In a five-page petition filed today, plaintiffs lawyers asked U.S. District Judge Rya Zobel to give additional parties access to records of the outbreak victims treated at the Saint Thomas Outpatient Neurosurgical Center.
Stating that "additional clinic settlements have been reached with the Saint Thomas defendants," the petition states that the additional access to lien information is needed to facilitate payments from that settlement.
Currently, according to the petition, the information, which is protected under the federal Health Insurance Portability and Accountability Act, can only be accessed by the lead plaintiff attorney and the tort trustee.
The terms of the settlement with the clinic and related parties has not been made public but sources say it is in excess of $20 million
The motion was filed by Nashville attorneys Ben Gastel and Gerard Stranch and Boston attorney Thomas Sobol.
Some payments to victims have been made from the remaining balance of  a $200 million trust fund amassed in the bankruptcy of the New England Compounding Center, the company that shipped fungus infested steroids to hundreds of health care providers in some 20 states.
A total of 103 victims who were injected at the Nashville clinic have filed claims against the clinic and related parties.
Nationally 778 patients were sickened and 77 of them died in the outbreak.
Contact: wfrochejr999@gmail.com