By Walter F. Roche Jr.
The U.S. Trustee has charged that a plan to end the bankruptcy case of the firm blamed for a fatal national outbreak of fungal meningitis could let unidentified parties off the hook, including some charged with federal crimes stemming from that outbreak.
In a filing in U.S. Bankruptcy Court in Massachusetts, U.S. Trustee William K. Harrington also charged that releases which are part of the plan are "contrary to public policy and are not in compliance with applicable law and First Circuit precedence."
He termed the releases "extremely broad and wide ranging."
The critical filing comes just days before a hearing is scheduled before U.S. Bankruptcy Judge Henry Boroff.
Also filing objections to a disclosure agreement filed by Bankruptcy Trustee Paul D. Moore were health care providers who administered fungus tainted steroid injections in the spines and joints of patients across the country and a company that constructed some of the facilities used to compound the steroids.
The filings come in the bankruptcy case of the New England Compounding Center, the pharmaceutical firm blamed by state and federal regulators and prosecutors for sickening 778 patients in 20 states and killing 76 of them.
In his 12-page filing, Harrington cited the fact that many of those who stand to benefit from the releases contained in the trustee's proposal were among 14 people affiliated with NECC who were indicted on fraud and even second degree murders charges late last year.
Harrington also argued that the agreement appeared to benefit parties who have not contributed to the pool of money that will be earmarked for victims and other creditors. He said many of those so-called third parties "are unknown and unidentifiable."
He also criticized the agreement for failing to provide an opt out agreement for those victims and creditors who object to the plan.
In a separate filing, attorneys for Liberty Industries charged that the trustee's proposal would put the small Connecticut firm out of business. They charged that the trustee had refused to negotiate a settlement with the firm though he did reach agreements with several other parties.
Stating that the company had not had any substantive dealings with NECC in seven years, the lawyers stated that Liberty "continues to be unjustly forced to defend itself on multiple fronts."
Liberty constructed the clean rooms that were used by NECC to produce sterile drugs, including fungus tainted methylprednisolone acetate. The firm has been named as a defendant in 99 pending civil suits.
Also filing objections were Pennsylvania based Rothman Institute and, Mercy Health Systems and health care facilities in North Carolina and New Jersey.
Under the proposed plan a total of about $135 million would be available to victims and other creditors. The largest amount, nearly $50 million, would come from the owners of NECC, including Barry J. Cadden.
Cadden and NECC supervisory pharmacist Glenn Chin were charged late last year with 25 counts of second degree murder for their respective roles at the Framingham, Mass. company. They and 12 other defendants have entered not-guilty pleas and are awaiting trial.
The hearing before Boroff is scheduled for 10 a.m. Tuesday at the U.S. Court House in Springfield, Mass.
wfrochejr999@gmail.com
Wednesday, February 18, 2015
Saturday, February 7, 2015
Location of Additional Meningitis Outbreak Victims Remains a Mystery
By Walter F. Roche Jr.
Federal investigators say they have identified 27 more victims of a deadly 2012 fungal meningitis outbreak but with one single exception, state health officials across the country say they don't know about any additional cases.
In an affidavit filed in U.S. District Court in Boston, Joseph Ridgley, an investigator for the U.S. Food and Drug Administration stated that not only were there 27 more victims, 12 of them eventually died.
That pushed the death toll for the outbreak from 64 to 76 and the total number of victims from 751 to 778.
FDA spokeswoman Christine Pearson, citing the advice of agency attorneys, declined comment and referred questions about the increase to federal prosecutors
Christina Sterling, spokeswoman for U.S. Attorney Carmen Diaz in Boston, declined to provide any information beyond that included in the public court filings. She did state in an email that all the new victims were treated in one of the 20 states where victims already have been identified.
"Our investigation has revealed 778 total infected, of which 76 died, but we have not identified publicly from what states," Sterling wrote in an email response to questions.
The filing by the FDA agent came as part of a seizure order issued in the aftermath of the indictment of 14 people associated with the now defunct New England Compounding Center, the drug firm blamed for the deadly outbreak.
The last available publicly disclosed victim count was issued by the Centers for Disease Control and Prevention in October of 2013.
CDC officials have stated that any cases uncovered after that date were to be tabulated by state health departments.
Calls to the state officials, however, showed only one state, Virginia, where a single additional case was reported. That pushed the victim total for Virginia from 54 to 55. The number of Virginia deaths remains at 5.
Officials at other state health departments from New York to Pennsylvania to Idaho all reported no changes in the number of overall victims or the number of deaths.
Those reports ranged from states like Michigan and Tennessee, which had the some of the highest number of victims, to states like New York, Pennsylvania and Idaho, which reported one victim each and no deaths.
Tennessee reported 153 victims, 16 of whom died. Michigan, with the most cases in the country reported 264 victims with 19 dying.
Health officials in South Carolina reported three victims and officially closed their investigation in January of 2013.
VICTIMS and DEATHS BY STATE ACCORDING TO THE LAST CDC REPORT
FL 25 7
GA 1 0
ID 1 0
IL 2 0
IN 93 11
MD 26 3
MI 264 19
MN 12 1
NC 18 1
NH 14 0
NJ 51 0
NY 1 0
OH 20 1
PA 1 0
RI 3 0
SC 3 0
TN 153 16
TX 2 0
VA 54* 5
WV 7 0
*Virginia cases number was later increased to 55 by state health officials
Federal investigators say they have identified 27 more victims of a deadly 2012 fungal meningitis outbreak but with one single exception, state health officials across the country say they don't know about any additional cases.
In an affidavit filed in U.S. District Court in Boston, Joseph Ridgley, an investigator for the U.S. Food and Drug Administration stated that not only were there 27 more victims, 12 of them eventually died.
That pushed the death toll for the outbreak from 64 to 76 and the total number of victims from 751 to 778.
FDA spokeswoman Christine Pearson, citing the advice of agency attorneys, declined comment and referred questions about the increase to federal prosecutors
Christina Sterling, spokeswoman for U.S. Attorney Carmen Diaz in Boston, declined to provide any information beyond that included in the public court filings. She did state in an email that all the new victims were treated in one of the 20 states where victims already have been identified.
"Our investigation has revealed 778 total infected, of which 76 died, but we have not identified publicly from what states," Sterling wrote in an email response to questions.
The filing by the FDA agent came as part of a seizure order issued in the aftermath of the indictment of 14 people associated with the now defunct New England Compounding Center, the drug firm blamed for the deadly outbreak.
The last available publicly disclosed victim count was issued by the Centers for Disease Control and Prevention in October of 2013.
CDC officials have stated that any cases uncovered after that date were to be tabulated by state health departments.
Calls to the state officials, however, showed only one state, Virginia, where a single additional case was reported. That pushed the victim total for Virginia from 54 to 55. The number of Virginia deaths remains at 5.
Officials at other state health departments from New York to Pennsylvania to Idaho all reported no changes in the number of overall victims or the number of deaths.
Those reports ranged from states like Michigan and Tennessee, which had the some of the highest number of victims, to states like New York, Pennsylvania and Idaho, which reported one victim each and no deaths.
Tennessee reported 153 victims, 16 of whom died. Michigan, with the most cases in the country reported 264 victims with 19 dying.
Health officials in South Carolina reported three victims and officially closed their investigation in January of 2013.
VICTIMS and DEATHS BY STATE ACCORDING TO THE LAST CDC REPORT
FL 25 7
GA 1 0
ID 1 0
IL 2 0
IN 93 11
MD 26 3
MI 264 19
MN 12 1
NC 18 1
NH 14 0
NJ 51 0
NY 1 0
OH 20 1
PA 1 0
RI 3 0
SC 3 0
TN 153 16
TX 2 0
VA 54* 5
WV 7 0
*Virginia cases number was later increased to 55 by state health officials
Sunday, February 1, 2015
Tennessee Defendants in Meningitis Cases Face Questioning
By Walter F. Roche Jr.
For the dozens of Tennessee victims of the 2012 fungal meningitis outbreak longstanding litigation is about to enter a new and critical stage.
This week two key staffers at the Nashville clinic where dozens of patients were injected with fungus laden spinal steroids will undergo what is likely to be hours of questioning.
Court records show Debra Schamberg and Scott Butler will be questioned on Tuesday and Wednesday. Schamberg was a staffer at the Saint Thomas Outpatient Neurosurgical Center. Butler was the chief administrative officer.
The depositions, part of the discovery process leading to an actual trial, are the first to be faced by Tennessee defendants in the meningitis cases. In a typical deposition, witnesses are placed under oath. The sessions are generally held in private attorneys' offices.
Questions are likely to focus on how and why the Nashville clinic turned to the New England Compounding Center to become the supplier of methyprednisolone acetate.
Schamberg and Butler are and were employees of the Howell Allen Clinic, a 50 percent owner of the neurosurgical center.
The attorney for Howell Allen did not respond to a request for comment on the upcoming depositions.
Though the cases were later transferred to federal court, arguments in cases first filed in Davidson Circuit Court, centered on how and why the neurosurgical center decided in 2012 to switch suppliers and purchase drugs from NECC, the now defunct firm blamed for the outbreak which sickened 778 patients, 76 of whom later died.
"We look forward to questioning the corporate decision-makers for the corporations that sold these contaminated drugs to unsuspecting patients," said Nashville attorney Mark Chalos, who represents some of the victims.
He added that the depositions "are another step in our continuing efforts to hold the wrong-doers accountable for the harm they caused."
Court filings include 2011 emails between Schamberg and an NECC salesman about the price that would be charged for individual vials of the steroid.
"What price would we need to give you to earn your business?” the salesman asked.
Schamberg emailed back stating that if he could get the price below $6.50 per vial, “then we can talk.”
Three days later the salesman emailed back offering to provide steroids at that price.
Following that exchange, according to an amended complaint filed in federal court, NECC’s then-current supplier raised its price from $6.49 to $8.95 per vial.
“Saint Thomas was not willing to pay $8.95 per vial of methylprednisolone acetate,” the complaint in one case states.
In a subsequent email to the NECC salesman, Schamberg wrote that if the pricing is still $6.50 per vial, “I am willing to do business with you.”
The same day, an exhibit shows, she placed an order for 700 vials.
In court hearings in Nashville, lawyers for the clinic vehemently denied that pricing had anything to do with the switch in suppliers. Instead they attributed the change to drug shortages.
The questioning also is likely to focus on the relationship between the clinic and the Saint Thomas Health, which owned the other 50 percent stake in the neurosurgical center.
wfrochejr999@gmail.com
For the dozens of Tennessee victims of the 2012 fungal meningitis outbreak longstanding litigation is about to enter a new and critical stage.
This week two key staffers at the Nashville clinic where dozens of patients were injected with fungus laden spinal steroids will undergo what is likely to be hours of questioning.
Court records show Debra Schamberg and Scott Butler will be questioned on Tuesday and Wednesday. Schamberg was a staffer at the Saint Thomas Outpatient Neurosurgical Center. Butler was the chief administrative officer.
The depositions, part of the discovery process leading to an actual trial, are the first to be faced by Tennessee defendants in the meningitis cases. In a typical deposition, witnesses are placed under oath. The sessions are generally held in private attorneys' offices.
Questions are likely to focus on how and why the Nashville clinic turned to the New England Compounding Center to become the supplier of methyprednisolone acetate.
Schamberg and Butler are and were employees of the Howell Allen Clinic, a 50 percent owner of the neurosurgical center.
The attorney for Howell Allen did not respond to a request for comment on the upcoming depositions.
Though the cases were later transferred to federal court, arguments in cases first filed in Davidson Circuit Court, centered on how and why the neurosurgical center decided in 2012 to switch suppliers and purchase drugs from NECC, the now defunct firm blamed for the outbreak which sickened 778 patients, 76 of whom later died.
"We look forward to questioning the corporate decision-makers for the corporations that sold these contaminated drugs to unsuspecting patients," said Nashville attorney Mark Chalos, who represents some of the victims.
He added that the depositions "are another step in our continuing efforts to hold the wrong-doers accountable for the harm they caused."
Court filings include 2011 emails between Schamberg and an NECC salesman about the price that would be charged for individual vials of the steroid.
"What price would we need to give you to earn your business?” the salesman asked.
Schamberg emailed back stating that if he could get the price below $6.50 per vial, “then we can talk.”
Three days later the salesman emailed back offering to provide steroids at that price.
Following that exchange, according to an amended complaint filed in federal court, NECC’s then-current supplier raised its price from $6.49 to $8.95 per vial.
“Saint Thomas was not willing to pay $8.95 per vial of methylprednisolone acetate,” the complaint in one case states.
In a subsequent email to the NECC salesman, Schamberg wrote that if the pricing is still $6.50 per vial, “I am willing to do business with you.”
The same day, an exhibit shows, she placed an order for 700 vials.
In court hearings in Nashville, lawyers for the clinic vehemently denied that pricing had anything to do with the switch in suppliers. Instead they attributed the change to drug shortages.
The questioning also is likely to focus on the relationship between the clinic and the Saint Thomas Health, which owned the other 50 percent stake in the neurosurgical center.
wfrochejr999@gmail.com
Friday, January 23, 2015
IG Finds Lack of Oversight in Hospital Use of Drug Compounders
By Walter F. Roche Jr.
More than two years after a nationwide outbreak of deadly fungal meningitis caused by a Massachusetts drug compounding firm, a federal audit has concluded federal regulators have not yet taken necessary steps to ensure adequate regulation of the industry.
In a 23-page report issued this week, the Inspector General for the Department of Health and Human Services found that surveyors, in most cases, don't even check to determine if drug compounding firms serving hospitals have registered with the U.S. Food and Drug Administration.
The report concludes that despite the outbreak which killed more than 64 patients across the country, agencies conducting hospital surveys have no plans to tight.en oversight. (A recent court filing states that the number of deaths has increased to 76)
"Despite outsourced compound injections' being responsible for the 2012 fungal meningitis outbreak, none of the oversight entities plan to change how their oversight addresses hospital contracts with standalone compounding pharmacies," the report states.
The 2012 outbreak has been blamed on the now defunct New England Compounding Center, a for-profit privately owned firm which supplied drugs that were supposed to be sterile to hundreds of hospitals and clinics from Massachusetts to California. Methylprednisolone acetate shipped by NECC was laden with fungus, sickening more than 750 patients. (778, according to a recent court filing)
The IG report focuses on those hospitals, some 80 per cent of those participating in the Medicare program, which contract with private firms to supply compounded drugs.
Officials of the Center for Medicare and Medicaid Services (CMS) did not dispute the findings and concurred with two recommended changes.
The report found that only one of five agencies conducting surveys for CMS reported that it always reviewed hospital contracts with so-called standalone pharmacies.
The report noted that such contract reviews could include determinations of whether the agreements included safety provisions such as appropriate recall, storage and testing requirements.
In another apparent lapse, the report found that surveyors for three of five review agencies did not check to determine whether the standalone pharmacies utilized by hospitals were registered with the FDA under the provisions of a new federal law enacted in the wake of the fungal meningitis outbreak.
"Because most hospitals do not inspect the standalone pharmacies with which they contract, a satisfactory FDA inspection might be the only indicator of the conditions at a standalone pharmacy."
Other issues raised in the report include the training of surveyors in compounding pharmacy standards and in their ability to analyze supporting documents on hospital practices.
The IG recommended increased training for hospital surveyors and changing Medicare agreements with hospitals to cover standards for contracting with standalone compounding pharmacies.
wfroche999@gmail.com
More than two years after a nationwide outbreak of deadly fungal meningitis caused by a Massachusetts drug compounding firm, a federal audit has concluded federal regulators have not yet taken necessary steps to ensure adequate regulation of the industry.
In a 23-page report issued this week, the Inspector General for the Department of Health and Human Services found that surveyors, in most cases, don't even check to determine if drug compounding firms serving hospitals have registered with the U.S. Food and Drug Administration.
The report concludes that despite the outbreak which killed more than 64 patients across the country, agencies conducting hospital surveys have no plans to tight.en oversight. (A recent court filing states that the number of deaths has increased to 76)
"Despite outsourced compound injections' being responsible for the 2012 fungal meningitis outbreak, none of the oversight entities plan to change how their oversight addresses hospital contracts with standalone compounding pharmacies," the report states.
The 2012 outbreak has been blamed on the now defunct New England Compounding Center, a for-profit privately owned firm which supplied drugs that were supposed to be sterile to hundreds of hospitals and clinics from Massachusetts to California. Methylprednisolone acetate shipped by NECC was laden with fungus, sickening more than 750 patients. (778, according to a recent court filing)
The IG report focuses on those hospitals, some 80 per cent of those participating in the Medicare program, which contract with private firms to supply compounded drugs.
Officials of the Center for Medicare and Medicaid Services (CMS) did not dispute the findings and concurred with two recommended changes.
The report found that only one of five agencies conducting surveys for CMS reported that it always reviewed hospital contracts with so-called standalone pharmacies.
The report noted that such contract reviews could include determinations of whether the agreements included safety provisions such as appropriate recall, storage and testing requirements.
In another apparent lapse, the report found that surveyors for three of five review agencies did not check to determine whether the standalone pharmacies utilized by hospitals were registered with the FDA under the provisions of a new federal law enacted in the wake of the fungal meningitis outbreak.
"Because most hospitals do not inspect the standalone pharmacies with which they contract, a satisfactory FDA inspection might be the only indicator of the conditions at a standalone pharmacy."
Other issues raised in the report include the training of surveyors in compounding pharmacy standards and in their ability to analyze supporting documents on hospital practices.
The IG recommended increased training for hospital surveyors and changing Medicare agreements with hospitals to cover standards for contracting with standalone compounding pharmacies.
wfroche999@gmail.com
Thursday, January 8, 2015
Man Indicted in Drug Compounding Case Admitted Diverting Anti-fungal Drugs
By Walter F. Roche Jr.
One of the the 14 people indicted in the aftermath of a nationwide fungal meningitis outbreak gave up his pharmacy technician's license after admitting to stealing or diverting antifungal drugs from a former employer.
Records of the Massachusetts Board of Pharmacy show that Scott M. Connolly gave up his license in 2008 after getting caught sending 30 fluconazole tablets to an unidentified address in Missouri.
According to those records a contrite Connolly later wrote to the state agency calling his action "an extremely terrible error in judgment."
The drugs, valued at $432.14, are used to treat fungal infections, the same type of infection suffered by the victims of the 2012 outbreak.
According to the 131-count indictment made public last month, Connolly was working as a pharmacy technician for the New England Compounding Center, even though he had no license. The grand jury charged that Connolly used the username and password of his boss, Barry Cadden, to hide his role at NECC.
Prosecutors say that dozens of patients died and hundreds were sickened due to fungus infested sterile drugs shipped from NECC to health providers in more than 20 states.
Connolly was charged with racketeering and conspiracy for his role in one of NECC's clean rooms, the source of some of the contaminated or untested drugs.
Connolly, acting in violation of Massachsuetts' law, oversaw the preparation of a drug called cardioplegia, a drug used to temporarily stop the heart from beating during surgical procedures, the indictment charges. Two pending civil suits charge that NECC's cardioplegia was responsible for the deaths of two youths under treatment at a Las Vegas hospital.
The indictment lists cardioplegia doses shipped to hospitals in nine states, including Nevada, Florida and Massachusetts.
Connolly and the 13 others named in the 73-page indictment have entered not guilty pleas. Those include Cadden, who was a founder of NECC.
The records show a year after surrendering his license, Connolly wrote the panel to plead for reconsideration of his case.
"I know that what I did was wrong and can assure you it will never happen again," he wrote in a 2009 letter.
In the letter he told state regulators he was working for Ameridose, a sister company to NECC. He said he was involved in invoicing but wanted to return to a pharmacist technician's role.
The files indicate that the diversion came to light when the drugs were returned to his then employer, Bioscrip, because there was no one at the address to sign for them and the drugs were sent back to the company. Bioscrip then terminated Connolly and reported him to the state.
The files indicate the Connolly's plea for reconsideration was denied.
According to the indictment, despite the board's turndown, he went to work in the NECC cleanroom as a pharmacy technician.
wfroche999@gmail.com
One of the the 14 people indicted in the aftermath of a nationwide fungal meningitis outbreak gave up his pharmacy technician's license after admitting to stealing or diverting antifungal drugs from a former employer.
Records of the Massachusetts Board of Pharmacy show that Scott M. Connolly gave up his license in 2008 after getting caught sending 30 fluconazole tablets to an unidentified address in Missouri.
According to those records a contrite Connolly later wrote to the state agency calling his action "an extremely terrible error in judgment."
The drugs, valued at $432.14, are used to treat fungal infections, the same type of infection suffered by the victims of the 2012 outbreak.
According to the 131-count indictment made public last month, Connolly was working as a pharmacy technician for the New England Compounding Center, even though he had no license. The grand jury charged that Connolly used the username and password of his boss, Barry Cadden, to hide his role at NECC.
Prosecutors say that dozens of patients died and hundreds were sickened due to fungus infested sterile drugs shipped from NECC to health providers in more than 20 states.
Connolly was charged with racketeering and conspiracy for his role in one of NECC's clean rooms, the source of some of the contaminated or untested drugs.
Connolly, acting in violation of Massachsuetts' law, oversaw the preparation of a drug called cardioplegia, a drug used to temporarily stop the heart from beating during surgical procedures, the indictment charges. Two pending civil suits charge that NECC's cardioplegia was responsible for the deaths of two youths under treatment at a Las Vegas hospital.
The indictment lists cardioplegia doses shipped to hospitals in nine states, including Nevada, Florida and Massachusetts.
Connolly and the 13 others named in the 73-page indictment have entered not guilty pleas. Those include Cadden, who was a founder of NECC.
The records show a year after surrendering his license, Connolly wrote the panel to plead for reconsideration of his case.
"I know that what I did was wrong and can assure you it will never happen again," he wrote in a 2009 letter.
In the letter he told state regulators he was working for Ameridose, a sister company to NECC. He said he was involved in invoicing but wanted to return to a pharmacist technician's role.
The files indicate that the diversion came to light when the drugs were returned to his then employer, Bioscrip, because there was no one at the address to sign for them and the drugs were sent back to the company. Bioscrip then terminated Connolly and reported him to the state.
The files indicate the Connolly's plea for reconsideration was denied.
According to the indictment, despite the board's turndown, he went to work in the NECC cleanroom as a pharmacy technician.
wfroche999@gmail.com
Wednesday, January 7, 2015
Meningitis Outbreak Death Toll Jumps to 76
By Walter F. Roche Jr.
The death toll in a 2012 fungal meningitis outbreak jumped by 12 to a total of 76, according to a massive filing in the criminal case against those blamed for the outbreak.
The new death toll numbers were included in an affidavit filed by federal agents to justify the seizure of additional assets from the owners of the New England Compounding Center, the now defunct firm blamed for the outbreak.
According to the filing, the number of victims of the outbreak continued to climb even after officials from the U.S. Centers for Disease Control and Prevention stopped updating the case count.
According to the affidavit the number of patients sickened also continued upward reaching 778, 27 higher than the last CDC count of 751.
"The CDC stopped updating its official count as of Oct. 31, 2013," Joseph Ridgley, a special agent for the U.S. Food and Drug Administration, wrote in one court filed affidavit.
"This investigation, however, revealed that the total number of infected patients increased and is approximately 778, of which 76 have died," he continued.
The new numbers were included in filings made by federal officials to justify the seizure of $18.3 million in assets held by NECC founder and stockholder Barry Cadden and co-owners Lisa and Douglas Conigliaro.
All three were named in a 131-count indictment handed up by a federal grand jury in Boston last month.
The three and 11 others - all owners or employees of NECC- were indicted on charges ranging from second degree murder to mail fraud. They all have entered not guilty pleas. No trial date has been set.
The affidavits totaling 128-pages, which were unsealed this week, detail how Cadden and the Conigliaros paid themselves millions of dollars which had been paid to NECC to provide a fungus tainted spinal steroid injected into the spines and joints of unsuspecting victims.
The 25 counts of second degree murder were lodged against Cadden, who was the chief pharmacist for NECC, and Glenn Chin, a supervisory pharmacist for the Framingham, Mass drug compounding firm.
Under the seizure order assets totaling $1.5 million were seized from Cadden while $16.8 million was seized from Douglas and Lisa Conigliaro.
The Conigliaros were charged in the indictment with violating a bankruptcy court order that had placed a freeze on the $16.8 million.
The owners of NECC already had agreed to contribute nearly $50 million to a $136 million fund to compensate victims of the outbreak. It was not immediately clear how much if any of the additional $18.3 million would be allotted to the victims' fund.
The victims' fund was created as part of the proposed settlement of NECC's bankruptcy case and is subject to approval by U.S. Bankruptcy Judge Henry Boroff.
wfrochejr999@gmail.com
The death toll in a 2012 fungal meningitis outbreak jumped by 12 to a total of 76, according to a massive filing in the criminal case against those blamed for the outbreak.
The new death toll numbers were included in an affidavit filed by federal agents to justify the seizure of additional assets from the owners of the New England Compounding Center, the now defunct firm blamed for the outbreak.
According to the filing, the number of victims of the outbreak continued to climb even after officials from the U.S. Centers for Disease Control and Prevention stopped updating the case count.
According to the affidavit the number of patients sickened also continued upward reaching 778, 27 higher than the last CDC count of 751.
"The CDC stopped updating its official count as of Oct. 31, 2013," Joseph Ridgley, a special agent for the U.S. Food and Drug Administration, wrote in one court filed affidavit.
"This investigation, however, revealed that the total number of infected patients increased and is approximately 778, of which 76 have died," he continued.
The new numbers were included in filings made by federal officials to justify the seizure of $18.3 million in assets held by NECC founder and stockholder Barry Cadden and co-owners Lisa and Douglas Conigliaro.
All three were named in a 131-count indictment handed up by a federal grand jury in Boston last month.
The three and 11 others - all owners or employees of NECC- were indicted on charges ranging from second degree murder to mail fraud. They all have entered not guilty pleas. No trial date has been set.
The affidavits totaling 128-pages, which were unsealed this week, detail how Cadden and the Conigliaros paid themselves millions of dollars which had been paid to NECC to provide a fungus tainted spinal steroid injected into the spines and joints of unsuspecting victims.
The 25 counts of second degree murder were lodged against Cadden, who was the chief pharmacist for NECC, and Glenn Chin, a supervisory pharmacist for the Framingham, Mass drug compounding firm.
Under the seizure order assets totaling $1.5 million were seized from Cadden while $16.8 million was seized from Douglas and Lisa Conigliaro.
The Conigliaros were charged in the indictment with violating a bankruptcy court order that had placed a freeze on the $16.8 million.
The owners of NECC already had agreed to contribute nearly $50 million to a $136 million fund to compensate victims of the outbreak. It was not immediately clear how much if any of the additional $18.3 million would be allotted to the victims' fund.
The victims' fund was created as part of the proposed settlement of NECC's bankruptcy case and is subject to approval by U.S. Bankruptcy Judge Henry Boroff.
wfrochejr999@gmail.com
Tuesday, January 6, 2015
Feds Seize $18.3 Million from Drug Compounders
By Walter F. Roche Jr.
Federal officials have seized some $18.3 million in additional assets from the owners of a defunct Massachusetts drug compounding company blamed in the deaths of 64 patients.
Seizure orders, which were unsealed Tuesday, show that the funds were taken from the bank and investment accounts of members of the Cadden and Conigliaro families, owners of the defunct New England Compounding Center.
The funds are in addition to nearly $50 million from the two families under a settlement for a pending bankruptcy case. Overall some $136 million is expected to be available for victims of the 2012 fungal meningitis outbreak which sickened or killed 751 patients.
According to Boston U.S. Attorney Carmen Ortiz the seizures included $1.5 million from three accounts held by Barry J. Cadden, who was indicted recently on charges of second degree murder in the deaths of 25 of the 64 victims.
Funds totaling $16.8 million held by Carla Conigliaro and her husband Douglas also were frozen.
In the recent indictment Carla and Douglas Conigliaro were charged with violating a bankruptcy court order freezing their assets.
The court records unsealed Tuesday charge that the Conigliaros transferred millions of dollars the same week NECC surrendered its state license and shortly before the company filed for bankruptcy.
The Conigliaros and Cadden were among 14 indicted by a federal grand jury in December following a more than two year investigation of the 2012 outbreak, which has been blamed on fungus tainted spinal steroids shipped by NECC to health care providers across the country.
wfrochejr999@gmail.com
Federal officials have seized some $18.3 million in additional assets from the owners of a defunct Massachusetts drug compounding company blamed in the deaths of 64 patients.
Seizure orders, which were unsealed Tuesday, show that the funds were taken from the bank and investment accounts of members of the Cadden and Conigliaro families, owners of the defunct New England Compounding Center.
The funds are in addition to nearly $50 million from the two families under a settlement for a pending bankruptcy case. Overall some $136 million is expected to be available for victims of the 2012 fungal meningitis outbreak which sickened or killed 751 patients.
According to Boston U.S. Attorney Carmen Ortiz the seizures included $1.5 million from three accounts held by Barry J. Cadden, who was indicted recently on charges of second degree murder in the deaths of 25 of the 64 victims.
Funds totaling $16.8 million held by Carla Conigliaro and her husband Douglas also were frozen.
In the recent indictment Carla and Douglas Conigliaro were charged with violating a bankruptcy court order freezing their assets.
The court records unsealed Tuesday charge that the Conigliaros transferred millions of dollars the same week NECC surrendered its state license and shortly before the company filed for bankruptcy.
The Conigliaros and Cadden were among 14 indicted by a federal grand jury in December following a more than two year investigation of the 2012 outbreak, which has been blamed on fungus tainted spinal steroids shipped by NECC to health care providers across the country.
wfrochejr999@gmail.com
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