Tennessee Victims Could Get Checks Next Month

By Walter F. Roche Jr.

An estimated $20 million has been deposited in a settlement fund for Nashville, Tenn. area victims of a deadly fungal meningitis outbreak and initial payments could be forthcoming within a month.
Some details on the settlement were given today to U.S. District Court Judge Rya Zobel in a 45 minute session in her Boston, Mass. courtroom.
Benjamin Gastel  told Zobel that money has been deposited in the fund and an administrator to distribute payments has been appointed.
Though the exact amount of the settlement has never been disclosed, it is estimated to be in excess of $20 million.
The funds will go to the more than 100 outbreak victims who were sickened after being injected with fungus laden steroids at the Saint Thomas Outpatient Neurosurgical Center in Nashville.
Zobel has been presiding over hundreds of cases brought by outbreak victims against hospitals and clinics that purchased contaminated vials of methylprednisolone acetate from the now defunct New England Compounding Center.
Gastel reported that a mediated settlement might be possible for some 13 cases filed by victims against the Specialty Surgery Center in Crossville, Tenn. He said the effort included the services of the same mediator used in the Saint Thomas cases.
Chris Tardio, one of the surgery center's lawyers, said his client supported the effort for a mediated settlement.
During the session Zobel gave her  approval to settlements for the survivors of two Virginia patients who were among some 77 who died during the outbreak. Payments to three survivors of one of those victims will total some $450,000.
Five beneficiaries of the second victim will share a little over $360,000.
Zobel also heard from lawyers for victims and the operators of a Maryland clinic. Eight cases against the Box Hill Clinic are still in Zobel's court, while some 20 others are being litigated in Maryland courts.
Zobel urged both sides to make an effort at mediating a settlement of the federal cases. A Maryland judge already had ordered mediation in the cases being heard in Harford County. However, Zobel said there would be no point in her ordering mediation if the clinic lawyers were set on taking the cases to trial.
"There's nothing the court can do right now," Zobel said.
Also presented during the session was a status report on payments to outbreak victims from a separate fund established under the bankruptcy of NECC.
Michael Fencer, the lawyer representing the trustee, said 2,018 claims have been approved and some $77.7 million has been disbursed. According to the report from Lynne Riley victims can expect a second payment during the summer.

2,018 Outbreak Victims Approved for Payments

By Walter F. Roche Jr.

A court appointed trustee has reported that 2,018 victims of the 2012 fungal meningitis outbreak have had the claims approved and some $77.7 million has been disbursed thus far.
The report by Lynne Riley was filed today in U.S.District Court in Boston, Mass. a day ahead of a status conference scheduled for Thursday before U.S. District Judge Rya Zobel.
According to Riley's five-page report a total of 1,810 checks have been distributed including 206 to victims owed money from separate funds established for claims against clinics that reached a settlement agreement.
Riley reported that she expects that victims whose claims have been approved should expect to receive a second payment of approximately the same amount as the first over the summer.
Riley's report states that 311 claims were "fully denied" and 21 were found to be invalid. Two claims were withdrawn.
She said that 128 appeals have been processed by a federal judge. An additional 18 claims could still be appealed.
The funds being distributed were generated in the bankruptcy of the New England Compounding Center, the company blamed for the outbreak. Some $47.5 million came from owners and officers of NECC and additional funds came from companies providing services to the drug compounder.
Zobel has been presiding over hundreds of victims' cases stemming from the outbreak that sickened some 778 patients in  20 states. Seventy-seven of them died.
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Chin NECC Trial Delayed Til August

By Walter F. Roche Jr.

The trial of the second defendant in the criminal case stemming from a deadly 2012 fungal meningitis outbreak is being delayed by four months and opening arguments in the case against Glenn Chin have been set for Aug. 14.
U.S. District Judge Richard G. Stearns issued a brief order today setting the trial date and also disclosing that he will be setting time limits on both sides to present their cases.
Chin's trial had been anticipated to begin in April following the recent conclusion last week in the trial of the other main defendant, Barry J. Cadden.
Both Cadden and Chin were charged with racketeering, mail fraud and 25 counts of second degree murder following a two year probe of a fungal meningitis outbreak that sickened 778 patients, killing 77 of them.
A 12 member jury convicted Cadden of rackecteering and mail fraud but acquitted him on the second degree murder charges. Cadden was a part owner and president of the New England Compounding Center, the company blamed for the outbreak.
Chin, who faces identical charges, was a supervising pharmacist at NECC.
In his brief order, Stearns stated that an additional order setting time limits on the upcoming trial would issue "in due course."
Both prosecutors and Chin's attorneys have submitted proposals on limiting the testimony.
The judge moved to limit testimony as the Cadden trial inched its way through his court over a nine week period. Most of that time was consumed by the prosecution case, while Cadden's defense covered barely two days.
Under Stearns order jury selection will begin Aug. 11.
Stearns order does not make clear what will happen with the cases against seven other NECC defendants who also had been slated for an April trial.  Those include Scott Connelly who was working as a pharmacy technician at NECC even though he had voluntarily given up his registration following a state Board of Pharmacy investigation.
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Prosecutors' Time Limit Response Under Seal

By Walter F. Roche Jr.

Federal prosecutors have filed their response to a judge's order aimed at setting time limits on the case against the second major defendant in the criminal case stemming from a deadly fungal meningitis outbreak.
The government response to the order from U.S. District Judge Richard G. Stearns in the case against Glenn A. Chin was filed late last week under seal, which means it is not available for public review.
The filing comes just after the case of Barry J. Cadden came to a close with the jury convicting him on racketeering and mail fraud but acquitting him on 25 counts of second degree murder.
Cadden was the pharmacist in charge and part owner of the New England Compounding Center, the company blamed for the 2012 outbreak. Chin was a supervising pharmacist at NECC and oversaw operations in the clean room where fungus laden vials of a spinal steroid were prepared.
Chin faces the same charges as Cadden did, racketeering, mail fraud and second degree murder.
Stearns issued the order in February aimed at limiting the length of the Chin trial in the midst of the Cadden trial, which Stearns described as the longest case in the history of the courthouse. It opened in 1988.
Citing the lengthy case, federal prosecutors sought and obtained an extension from Stearns on the deadline for filing their trial shortening proposal.
In his  six-page February order Stearns wrote that time limits improve "the quality of jury comprehension" and enable the court "to efficiently manage its docket."
He also expressed concern about the effect on jurors of "mega trials," trials that are measured in months rather than days.
Initially Chin and Cadden were set to be tried at the same time, but as the trial date approached, Cadden's lawyers disclosed that a major part of their defense would be to blame Chin. They did so frequently in the trial that just ended.
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Majority of Jurors Voted Guilty on Murder Charges

By Walter F. Roche Jr.

BOSTON, Mass. - The official tally sheets for the jurors in the murder and racketeering trial of Barry J. Cadden shows the majority voted for a guilty finding for deaths in four states.
Though a unanimous vote was required for a conviction eight jurors voted for a guilty finding on second degree murder in cases from Michigan and Tennessee, while four voted not guilty.
In the Indiana cases the vote was 9-3 in favor of a guilty finding. The vote for a guilty finding was 7-5 on the Maryland cases.
In the Virginia cases the vote was 3 for guilty and 9 not guilty. In the Florida and North Carolina cases the vote was 12-0 for a not guilty verdict.
As explained in the 50-page jury instructions the jury had to consider the specific state laws in deciding their votes on the second degree murder charges. Virginia, Florida and North Carolina statutes had stricter standards for reaching a guilty finding.
Here are the 25 second degree murder cases in the indictment.

Michigan: Karina Baxter (9/23/12), Paula Brent (11/17/12), Gayle Gipson (10/26/12), Donna Kruzich (10/8/12), Lynn Lapierre  10/17/12), Mary Pletti (8/23/12), Sally Roe (10/18/12), Emma Todd

Tennessee: Marie Hester (11/1/12), Eddie Lovelace (9/17/12), Donald McDavid (11/4/12), Diana Reed (10/3/12) , Thomas Rybinski (9/29/12), Carol Wetton (4/16/13), Earline Williams (10/15/12)

Indiana: Pauline Burema (10/10/12), Kathy Dillon (11/5/12), Alice Machowiak (12/10/12)

Maryland: Bahman Kashi (1/28/13), Brenda Rozek (9/16/12), Edna Young (12/31/12)

Virginia: Kathy Sinclair (1/19/13), Douglas Wingate (9/18/12)

Florida: Godwin Mitchell (3/18/13)

North Carolina: Elwina Shaw (10/19/12)

Cadden Cleared on Murder Charges, Convicted of Racketeering, Mail Fraud

By Walter F. Roche Jr.

BOSTON, Mass.- A federal jury today convicted a former drug company executive on charges of racketeering and multiple counts of mail fraud but acquitted him of the most serious charges, 25 counts of second degree murder.
The jury, which began deliberations late last week, found Barry J. Cadden, 50, guilty of shipping out drugs that were untested, allowing an unlicensed pharmacy technician to prepare drugs and shipping misbranded drugs in interstate commerce with false patient names.
In addition to the murder charges they found him not guilty of conspiracy to defraud the United States and for shipping expired drugs.
Overall he was convicted on 58 of the 96 counts in the original indictment.
Acting U.S. Attorney William Weinreb said Cadden could face up to 20 years on each of 52 charges of mail fraud. U.S. District Judge Richard G. Stearns set June 21 for sentencing. A conviction on the murder charges could have brought a life sentence
Weinreb said Cadden was responsible for "the largest public health crisis in U.S. history caused by a pharmaceutical."
Though Cadden was only charged for 25 deaths, his company, the now shuttered New England Compounding Center, was blamed for 77 deaths among some 778 patients who were sickened.
Bruce Singal, Cadden's lawyer, said avoiding conviction on the murder charges "was our main priority."
He said it was unjust for the murder charges to have been brought in the first place, adding that the jury had vindicated his client by rejecting those charges. He said he plans to file an appeal of the convictions.
Living victims of the outbreak had mixed reactions to the verdict, many expressing gratitude to prosecutors but disappointment with the not guilty verdict on the murder counts.
The family of Donald McDavid, who died following his injection with an NECC steroid at a Crossville, Tenn. clinic issued a statement commending federal prosecutors for their work on the case. Cadden had been charged in McDavid's death.
"We live with Don's loss every day. We take some comfort in knowing Mr. Cadden will be held accountable for his actions..No matter how long Mr. Cadden spends in prison, it will never bring Don back," the family said.
Jona Angst, a Michigan victim, said she was disappointed in the verdict.
"The victims wanted the murder charges," she said. "We deserve our justice. The dead deserve justice." 
Mark Chalos, a Nashville attorney who represents victims, said that while victims could take some solace in the conviction, "Mr. Cadden's scheme would not have succeeded without the greed and recklessness of the corporations that bought his products on the cheap and injected them into patients."
The verdict came after what Stearns called the longest trial in the history of the 29-year-old courthouse. Opening arguments were delivered on Jan. 19 and testimony from more than 60 witnesses stretched over some two and a half months
Cadden was one of 14 persons affiliated with NECC indicted by a federal grand jury in late 2014 following a more than two year investigation.
Prosecutors charged Cadden with playing Russian Roulette with the lives of unsuspecting patients and cited multiple records showing a history of  problems  in maintaining the safety and sterility of NECC's products.
Cadden's lawyers insisted he had no reason to believe, based on more than a decade of operation, that the 17,000 vials of methylprednisolone shipped out by NECC between May and September of 2012 were anything but safe and sterile.
Cadden, who had entered not guilty pleas to all 96 counts against him, did not testify in his own defense and his lawyers rested their case after only two days of testimony from a handful of witnesses.
The case against Cadden included extensive internal NECC documents, including Cadden's own emails and the videotapes of his sales training sessions. Prosecution witnesses included several former employees of NECC and an affiliated sales company including a former sales manager, Rob Ronzio, who testified under the terms of a plea deal.
Under that agreement Ronzio pleaded guilty to a single count of conspiracy to defraud the federal government.
As the trial dragged on from mid-January through February and in to March, Stearns made repeated attempts to move the trial along, at one point telling one of Cadden's lawyers, "You seem to have run out of things to say."
Before that he ruled that prosecutors could not present further testimony from outbreak victims or their survivors because of its prejudicial impact.
In addition to Ronzio and Cadden, two others named in the 2012 indictment entered guilty pleas to vastly reduced charges, two had all charges dismissed. The remainder are expected to go on trial shortly. The next case, according to court filings will be the charges against Glenn Chin, NECC's supervising pharmacist, who also faces multiple second degree murder charges.
Weinreb would not comment when asked what effect the Cadden verdict might have on the case against Chin. He said the trial was slated to begin next month.
Stearns already has issued orders seeking to set limits on the length of the Chin trial.
The 2012 outbreak first became public in early October of 2012, but trial testimony showed that the alarm had already been sounded days earlier after NECC clients began complaining about patients becoming ill and evidence of contamination in vials of NECC's products.
It became public shortly after a physician at the Vanderbilt University Medical Center reported to the Tennessee Health Department that a patient, who had recently had a spinal injection, was suffering from a very rare form of meningitis, one caused by a fungus called aspergillus fumagatus.
During the trial federal prosecutors attempted to show that Cadden delayed in sounding the alarm. Ronzio testified that Cadden "knew right away it was us."
Cadden's attorneys countered with a tape recording of a call Cadden made to a clinic with a warning that the drugs were being recalled.
"We consider this an emergency," he said in a voice mail left at the clinic.
Prosecutors played videotaped training sessions Cadden held with sales staffers in which he bragged about staving off state and federal regulators.
"They don't want to deal with us. They don't know what they are looking at," Cadden said, adding that he "educated" the state investigators.
"When complaints come in from other states, the board says, 'Just go away.'" Cadden told the sales traineed
Among the former NECC amployees to testify was Joseph Connolly, whose brother Scott was among those indicted. He testified that despite the promises made to customers NECC did not do the proper testing on its products. He said his brother had given up his registration as a pharmacy technician following a state investigation and shouldn't have been working in one of NECC's clean rooms.
According to other testimony Scott Connolly used Cadden's sign in and initials to authenticate his work at NECC.
Cadden was found guilty on the charges relating to Scott Connolly.
Annette Robinson, who was in charge of quality control for NECC, testified that when she brought sterility concerns, including presence of mold in and around the clean rooms, to Cadden's attention, nothing happened.

Jurors Question Could Jeopardize 40 Charges

By Walter F. Roche Jr.

BOSTON, Mass.-Jurors deliberating the racketeering and murder charges against a former drug company president raised a question today that could negatively impact up to 40 of the 96 counts pending against the defendant.
The  question was one of several raised by the 12 member jury as they completed the second full day considering the racketeering and second degree murder charges against Barry J. Cadden who served as president and pharmacist in charge for the now defunct New England Compounding Center.
Cadden was charged following a two year investigation of the 2012 fungal meningitis outbreak caused by fungus laden steroids shipped fron NECC's Framingham, Mass. headquarters.
The jurors sent a written question to U.S. District Judge Richard G. Stearns asking whether they could find Cadden guilty of violations of the federal Food Drug and Cosmetic Act, if they did not find that he did so willfully, meaning he intended to defraud and mislead.
The question arose from the instructions jurors were given and a check list they must complete on each of the charges.
Stearns said that because of the instructions and the check list the jurors could not find Cadden guilty of the violations unless they also concluded that he did so willfully.
If there is no intent to defraud or mislead, Stearns said, then you must find Mr. Cadden innocent.
 "That's not the way the instructions read," said Assistant U.S. Attorney George Varghese.
of Stearns' conclusion.
Varghese noted that the check list given to jurors has separate columns for a finding of guilt and a finding of intent and the law still provides for violations to be charged without specific intent..
"It's too late to change the instructions," Stearns replied.
Bruce Singal, Cadden's attorney, quickly signaled his agreement with Stearns.
Stearns said the jurors would be told that they must find Cadden willfully violated the law to also find him guilty of violating the act.
The counts in question charge Cadden with a variety of violations of the Food, Drug and Cosmetic Act, including mislabeling drugs and shipping drugs across state lines that he knew were prepared under insanitary conditions. The list includes vials of methylprednisolone acetate shipped by NECC to clinics in Tennessee, Michigan and Indiana.
Earlier in the days the jurors  asked for additional information on exhibits that were presented during the nearly three month trial, including information on the test results on drugs produced by NECC.
Singal objected to the jurors being presented a separate binder containing test results, because that binder had never been formally introduced as evidence.
Stearns assured him three times that the disputed binder was not in the jury room.
At the very end of the session jurors sent another request for a list of certificates of analysis on NECC drugs that were introduced during the trial.
Assistant U.S. Attorney Amanda Strachan said she would provide a list informing the jurors of the exhibit numbers for the certificates.
The jurors will reconvene tomorrow at 8 a.m.
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