Chin Facing Inquiry Over Hidden Assets

By Walter F. Roche Jr.

With just weeks to go before he begins serving an eight year prison sentence, the former pharmacist for the company blamed for a deadly outbreak,  is facing an inquiry into whether he misrepresented his assets to qualify for free legal representation.
The inquiry of Glenn A. Chin by a magistrate judge was disclosed in an 18-page ruling by the same judge who ruled that he must serve an eight year sentence following his conviction on racketeering and mail fraud charges.
U.S. District Judge Richard G. Stearns sitting in Boston, Mass. said the magistrate judge was examining whether Chin "may have misrepresented his net worth to avoid contributing to the payment for the services of the lawyers appointed by the court to represent him."
Stearns said the concerns arose following the disclosure that Chin and his wife Kathy, a codefendant in the case spent nearly $700,000 over the past 16 months for items including the purchase of a new car, paying off a mortgage and investing in new businesses.
In seeking a forfeiture of more than $600,000 federal prosecutors had charged that Chin failed to disclose some $700,000 held in a retirement account.
The references to the spending came in a ruling in which Stearns imposed a $175,000 forfeiture order against Chin, who was a supervising pharmacist at the now defunct New England Compounding Center, the company blamed for the 2012 fungal meningitis outbreak. Some 778 patients were sickened and 76 died from fungus laden steroids shipped from NECC.
In the same ruling Stearns acknowledged that the victims of the outbreak were unlikely to feel any sympathy for Chin.
"It is unlikely that many, if any of these victims will have any sympathy for Mr. Chin's circumstances," Stearns wrote.
Nonetheless the judge acknowledged his concern that Chin had lost his pharmacist's license and that his two children would still be minors when he is released from prison. He said that was a factor in limiting the forfeiture order to $175,000.
Chin is due to report to the federal Bureau of Prisons on March 14.
Contact: wfrochejr999@gmail.com

Chin Forfeiture Set At $175,000

By Walter F. Roche Jr.

A federal judge has issued a $175,000 forfeiture order against the former pharmacist who was found guilty of racketeering and mail fraud charges last year.
While stating that he agreed with many of the arguments offered by federal prosecutors, the order from U.S. District Judge Richard G. Stearns substantially reduced the more than $600,000 sought by the prosecution.
Chin's lawyer had argued that the forfeiture should be limited to $5,776 while prosecutors had sought $611,774. Stearns noted that prosecutors have stated they intend to make the forfeited money available to victims of the outbreak.
As the 18-page decision noted, Stearns has delayed action on a separate $82 million restitution order that prosecutors say would also benefit the thousands of victims of the 2012 fungal meningitis outbreak caused by fungus riddled steroids prepared in a clean room at the now defunct New England Compounding Center.
Chin was a supervising pharmacist at NECC where he oversaw the preparation of thousands of vials of methylprednisolone acetate that were injected in the spines and joints of unsuspecting patients.
At least 76 people died among nearly 800 who were sickened during the outbreak.
Chin and 13 others were indicted by a federal grand jury in 2014 following a two year criminal probe of the outbreak.
Chin is scheduled to begin serving an eight year sentence on March 14.
In setting the $175,000 figure Stearns said the proposal by prosecutors would force Chin to forfeit his entire salary from 2006 to 2012. But the judge concluded the amount should be limited to the salary Chin collected after NECC became a criminal enterprise in 2010 till it shutdown in October of 2012.
From that amount, Stearns deducted $125,499 in federal taxes taken from Chin's gross pay.
Stearns also wrote, however, that Chin and other co-conspirators "were fully aware of the risks involved" in shipping contaminated drugs and he cited the harm caused "by the fraudulent scheme" that impacted thousands of patients injected with those drugs.
Stearns also issued an order Friday recommending that Chin serve his sentence at the federal prison in Danbury, Conn. He had previously recommended placement in the federal prison at the site of the former Fort Devens military base near Ayer, Mass.
Stearns amended his original order after learning from Chin's lawyer that a drug and alcohol treatment program that Chin needs is not available at Fort Devens but is available in Danbury.
Contact: wfrochejr999@gmail.com

Conigliaro Faces Local Scrutiny

By Walter F. Roche Jr.

One of the remaining defendants in the criminal case stemming from the deadly 2012 fungal meningitis outbreak is coming under fire for his involvement in a recycling business, the same business highlighted in testimony in the recent trials of two co-defendants.
Fire officials in Framingham, Mass. have placed a freeze on any additional combustible materials being placed at a facility run by Conigliaro Industries, a company headed by Gregory Conigliaro.
Conigliaro was a vice president and part owner of the New England Compounding Center, the then adjacent company blamed for the outbreak that took the lives of at least 76 patients among nearly 800 who were  sickened by fungus riddled NECC drugs.
Conigliaro is charged along with others of  conspiring to defraud the U.S. Food and Drug Administration by misrepresenting the fact that NECC was not a small family run drug compounding pharmacy as they contended, but rather a manufacturer of drugs, subject to FDA inspection and regulation.
Conigliaro, who also is a licensed real estate salesman in Massachusetts, and the other remaining defendants are scheduled to go on trial in October.
According to Framingham Fire Chief Joseph C. Hicks, the freeze was ordered after the company failed to comply with an earlier order to reduce the volume of waste being stored at the property at 30 Fountain Street.
"Conigliaro's outside recycling yard has a fire code permit to store a specific quantity of combustible materials," Hicks wrote in an email response to questions. "On a recent inspection it was noted that the combustible storage was excessive. The facility was ordered to stop accepting combustible goods and reduce the quantity on its site," Hicks added.
He said "the compliance plan is to reduce and clean up the combustible storage," which is currently in progress.
For some local residents problems at the facility date back years.
City Councilor Judith Grove, whose district includes the recycling center, said questions were being raised long before the well publicized indictments and subsequent trials stemming from a two year grand jury probe of the fungal meningitis outbreak.
Recently, she said, the problems have visibly worsened as the volume of materials coming into the facility have increased while the market for recycled materials has apparently declined. She noted concerns have also increased as new developments have come to the neighborhood.
She said major rail lines pass close to the property.
One former town meeting member, George Lewis, has been cataloguing problems at the center for several years and has posted photos and videos showing rat infestation.
The rat problem has also drawn the attention of local health officials who have indicated they will up their monitoring efforts in the coming Spring.
Lewis said that prior to the 2014 indictments he spoke with FBI agents investigating NECC and pointed out the health hazards of having a drug company on the same property used for recycling mattresses and other materials.
"I felt it could be the cause of the meningitis," he said. "They should never have been allowed to go there," he said referring to the recycling business.
On its web site Conigliaro Industries boasts of its many clients including public school districts and other public agencies.
"We are uniquely qualified to serve the needs of your city or town," an entry web site states.
Conigliaro is facing the criminal charge despite two separate efforts to have the conspiracy charge dismissed.
U.S. District Judge Richard G. Stearns rebuffed both efforts concluding it would be up to a jury to decide his guilt or innocence.
The indictment charges that Conigliaro wrote a letter to the FDA on March 4, 2004 stating that NECC was a small scale family run pharmacy and not a manufacturer.
In the 2017 trial of Glenn Chin, a supervising pharmacist at NECC, Michael Mangiacotti, an FDA criminal investigator, testified that one of the first things they noticed when they arrived at NECC to begin the meningitis investigation was the nearby presence of the Conigliaro recycling operation and its potential as a source of contamination.
Chin was convicted of racketeering and mail fraud charges and will begin serving an eight-year federal prison sentence March 14.
Contact: wfrochejr999@gmail.com

Judge Stands Corrected on Chin Racketeering

By Walter F. Roche Jr,


Stating that he "misspoke" during a recent sentencing session, a federal judge has issued an unusual correction acknowledging that he was wrong by a year in describing the date a criminal racketeering enterprise got underway.
The statement was entered into the record Friday by U.S. District Richard G. Stearns in the case of Glenn Chin, who already has been sentenced to an eight-year prison term for his role in the 2012 fungal meningitis outbreak. The jury found Chin guilty of multiple racketeering and mail fraud charges.
"I misspoke when I said that the racketeering enterprise in question began in March of 2011," Stearns wrote, adding that he meant to say March of 2010, the same date set in the closely related case of co-defendant Barry J. Cadden.
Stearns said federal prosecutors were correct in stating that jurors found the earliest racketeering act in both the Cadden and Chin cases was a fraudulent mailing dated March 25, 2010.
Meanwhile sparring between prosecutors and Chin's lawyers continued following last week's hearing on forfeiture and restitution motions filed by Assistant U.S. Attorneys George Varghese and Amanda Strachan.
The prosecutors stated that Chin's lawyer, Stephen J. Weymouth was "categorically wrong" when he charged that prosecutors "misstated the truth" in the hearing last week regarding Chin's role in the bankruptcy of the drug compounding company that caused the fungal meningitis outbreak that took the lives of at least 76 patients.
In the three-page filing prosecutors charged that Chin "spent $698,163 of his own money in the past 16 months" without disclosing existence of the money from a retirement fund in disclosures to to federal officials.
They stated that Chin was not part of a related bankruptcy settlement and did not contribute to a fund set up to benefit victims of the 2012 deadly outbreak.
According to prosecutors Chin spent the money on a new Toyota, paying off a mortgage and the purchase of two vacation timeshares.
"Chin lavishly spent his newly found retirement account while never disclosing the money to the court and accepting the services of CJA (court appointed) counsel.
The filing concludes by charging it was "a misstatement of the truth" when Chin told the court he couldn't afford any restitution.
The charges were contained in a filing following following Thursday's hearing on the government motions to force Chin to pay a total of $82.6 million in forfeiture and restitution. Stearns took the motions under advisement.
Chin is scheduled to begin serving his sentence in March. Cadden, who was convicted of similar charges, already has begun serving a nine-year sentence.
Contact: wfrochejr999@gmail.com




Full docket text for document 1433:
Judge Richard G. Stearns: ELECTRONIC ORDER entered as to Glenn A. Chin. In anticipation of today's hearing the court notes a correction from the sentencing hearing. I misspoke when I said that the racketeering enterprise in question began in March of 2011. The government is correct, Gov't Reply at 4 (Dkt # 1430) that I meant to say March of 2010 (consistent with the analysis in the sentencing of co-defendant Barry Cadden). A RICO enterprise is defined by a minimum of two related predicate acts occurring within ten years of one another. Here, in Chin's case, as in the Cadden trial, the earliest predicate act found by the jury is the fraudulent mailing of March 25, 2010 (Predicate Act 69). All parties agree that the enterprise endured until the shuttering of NECC in October of 2012. So stated, /s/ Richard G. Stearns. (RGS, law2)

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Chin Fights Restitution and Forfeiture

By Walter F. Roche Jr.

The pharmacist convicted of racketeering and mail fraud for his role in a deadly 2012 outbreak is asking a federal judge to vastly reduce or eliminate government proposed restitution and forfeiture orders totaling some $82.6 million.
In separate filings in U.S. District Court in Boston, Mass. the lawyer for Glenn A. Chin argued that a  forfeiture order of $611,000 and a restitution order for $82 million sought by federal prosecutors were not justified.
Citing rulings already made in his case and that of co-defendant Barry J. Cadden, Chin's lawyer Stephen J. Weymouth, said any forfeiture order should be based on a two year period, not the six years proposed by the U.S. Attorney.
"The government failed to prove that 100 per cent of Mr. Chin's compensation was derived from racketeering activity," the 14-page motion states. The government proposal was based on the total compensation paid to Chin from 2006 to 2012.
Chin was convicted of the racketeering and mail fraud charges stemming from a grand jury probe of the 2012 fungal meningitis outbreak that sickened at least 778 patients killing 76 of them. Chin was a supervising pharmacist at the New England Compounding Center, the company blamed for the outbreak.
Chin argued that "the vast majority" of the drugs produced at NECC during Chin's tenure were not defective and caused no harm to medical providers or their patients.
Noting that U.S. District Judge Richard G. Stearns already has ruled that only $1.4 million worth of drugs produced by NECC were proven to be tainted, the motion states that any forfeiture should be limited to that total and not the $59.8 million in NECC's gross receipts.
The same percentage, 2.34 per cent should be applied to Chin's salary during that period, the motion adds, also arguing that the forfeiture should be limited to the actual amount Chin received after taxes were deducted.
The motion states that the $611,000 government forfeiture proposal would be "vastly disproportionate to the gravity of the defendant's offense.
Chin's motion recommends a forfeiture of $5,766.
In a separate motion, Weymouth said that the prosecution's proposal for an $82 million restitution order was based on the assumption that the victims included patients injected with the tainted drugs. However, he noted that under the racketeering law, Stearns already has ruled that the victims were the medical providers who bought contaminated drugs from NECC and not their patients.
"The government produced no evidence of a causal link between any particular conduct of Mr. Chin that caused the deadly fungus to grow," the filing states.
He also argued that because there were so many victims and the issues so complex it would be impossible to compute the precise amount of restitution,
Noting that Chin is 49-years-old, has two dependent children and has no likelihood of being able to return to his profession, the motion requests that if a restitution order is issued it should be limited to "nominal periodic payments."
Chin has already been sentenced to an eight year jail term, while Cadden is already serving a nine-year sentence.
Contact: wfrochejr999@gmail.com

 

Some Meningitis Claims Dismissed

By Walter F. Roche Jr.

Some but not all of the claims filed against a Maryland clinic by survivors of a woman who died in the 2012 fungal meningitis outbreak have been dismissed by a federal judge in Boston, Mass.
In a five-page ruling issued this week, U.S. District Judge Rya Zobel wrote that the remaining charges, including some negligence claims and violations of Maryland's consumer protection statutes will have to be decided by a jury.
The suit, one of the few remaining to be resolved, was filed by survivors of Brenda Lee Rozek who died on Sept. 16, 2012, 16 days after she was injected with  a fungus laden spinal steroid at the Box Hill Surgery Center in Abingdon, Md.
Rozek's death was one of the 25 cited in the indictment of owners and employees of the now defunct New England Compounding Center, the Massachusetts company that sold the contaminated drugs to the Maryland clinic. Though federal prosecutors charged that Rozek's death and 24 others amounted to second degree murder, two separate juries have rejected that claim.
In her ruling Zobel dismissed claims in the Rozek suit that the clinic and Dr. Ritu Bhambani violated provisions of the Massachusetts consumer protection statutes. She noted that all the major events in the case took place in Maryland.
She also dismissed claims for punitive damages noting that the plaintiffs had conceded they had no evidence that Bhambani had acted with malice.
"Because plaintiffs stipulated that there is no evidence of actual malice in this case, they may not recover punitive damages," the ruling states.
She said issues such as whether the clinic should have exercised due diligence in checking on the company selling the drugs. She said other issues such as a claim for medical expenses would be decided at a later date.
Several hundred victims of the 2012 outbreak have filed suits against the medical providers who injected them with tainted steroids. Dozens of those cases have been resolved. Some 76 patients died in the outbreak while more than 750 were sickened.
Contact: wfrochejr999@gmail.com

Judge Recommends Chin's Placement at Mass. Prison

By Walter F. Roche Jr.

The judge who presided over the trial of Glenn Chin has recommended that the former pharmacist serve his recently imposed eight year sentence at a federal prison just a short drive from his Massachusetts home.
U.S. District Judge Richard G. Stearns today recommended Chin serve his sentence at the federal prison at Fort Devens, Mass. Chin lives in Canton, Mass. about an hour's drive from the prison.
Chin's lawyer had asked Stearns on Wednesday to make the recommendation following the judge's decision to impose the eight year sentence. The recommendation goes to the federal Bureau of Prisons, the agency Chin has been ordered to report to on March 14.
Chin was convicted last year on charges stemming from the probe of a 2012 fungal meningitis outbreak caused by fungus laden drugs prepared in a clean room Chin supervised. He was convicted last year on charges of racketeering, conspiracy, mail fraud and violations of the Food Drug and Cosmetic Act.
Co-defendant Barry Cadden had also asked for placement at Fort Devens, but he is serving his nine year sentence in western Pennsylvania.
Cadden was president and part owner of the New England Compounding Center, the company that sold the drugs that caused the outbreak. Nearly 800 patients were sickened and 76 of them died during the outbreak. Chin was a supervising pharmacist at the now defunct NECC.