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United States v. Chin

United States District Court, D. Massachusetts

October 4, 2016

UNITED STATES OF AMERICA
v.
KATHY S. CHIN, MICHELLE L. THOMAS

          MEMORANDUM AND ORDER ON DEFENDANTS' MOTIONS TO DISMISS

          Richard G. Stearns UNITED STATES DISTRICT JUDGE.

         Before the court are motions filed on behalf of defendants Kathy S. Chin and Michelle L. Thomas seeking dismissal of the indictment insofar as it alleges criminal conduct on their part. For reasons to be explained, the motions will be allowed.

         On December 16, 2014, the Grand Jury returned a wide-ranging 73-page, 145-paragraph indictment alleging an assortment of crimes against fourteen defendants who are alleged to have been involved in the ownership, management, and/or operations of the now defunct New England Compounding Pharmacy, Inc. (NECC). Allegedly as the result of being administered contaminated doses of non-sterile methylprednisolone acetate (MDA) compounded by NECC, twenty-five patients died, and hundreds of others suffered grave injuries. Kathy Chin and Michelle Thomas are described in paragraphs 13 and 14 of the indictment as Massachusetts-licensed pharmacists who “worked in the packing area checking orders prior to shipment to NECC's customers” - in Ms. Chin's case from November of 2010 until October of 2012; in Ms. Thomas's case from March of 2012 until August of 2012.[1]

         The indictment is set out in six conceptually distinct chapters. The first, which encompasses Counts 1 and 2, is framed on the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 U.S.C. § 1961, and specifies 78 RICO racketeering acts, 25 of which allege second-degree murder. Chapter II (Count 3) charges a “Klein” conspiracy to defraud (mislead) the United States, or more precisely, the U.S. Food and Drug Administration (FDA), pursuant to 18 U.S.C. § 371. Chapter III (Counts 4-56) re-alleges a number of the racketeering acts under the generic Mail Fraud Statute, 18 U.S.C. § 1341. Chapter IV (Counts 57-94) charges five defendants (Cadden, Glenn Chin, Svirskiy, Leary, and Evanovsky) with introducing adulterated or misbranded drugs into interstate commerce, in violation of the Federal Food, Drug, and Cosmetic Act (FFDCA), 21 U.S.C. § 331(a). In Chapter V (Counts 95-109), Ms. Chin and Ms. Thomas are charged with dispensing drugs (betamethasone and, in one instance, triamcinolone) in interstate commerce without a valid prescription, in violation of the FFDCA - Ms. Chin is charged in four such instances of dispensing (Counts 104-107); Ms. Thomas in two (Counts 108-109). Finally in Chapter VI (since closed), Carla Conigliaro and Douglas Conigliaro were charged with criminal contempt of a Bankruptcy Court order, 18 U.S.C. § 401(3), and the unlawful structuring of banking withdrawals, 31 U.S.C. § 5324 (Counts 110-131).

         The interplay of the laws under which Ms. Chin and Ms. Thomas are indicted is complex, but their structure and wording is necessary to an understanding of this decision. Title 21 of the United States Code, Section 331(a), prohibits the introduction or causing the introduction into interstate commerce of a drug that is adulterated or misbranded. Section 353(b)(1) defines a drug capable of being misbranded as

(1) A drug intended for use by man which-
(A) because of its toxicity or other potentiality for harmful effect, or the method of its use, or the collateral measures necessary to its use, is not safe for use except under the supervision of a practitioner licensed by law to administer such drug; or
(B) is limited by an approved application under section 355 of this title to use under the professional supervision of a practitioner licensed by law to administer such drug;
shall be dispensed only (i) upon a written prescription of a practitioner licensed by law to administer such drug, or (ii) upon an oral prescription of such practitioner which is reduced promptly to writing and filed by the pharmacist, or (iii) by refilling any such written or oral prescription if such refilling is authorized by the prescriber either in the original prescription or by oral order which is reduced promptly to writing and filed by the pharmacist. The act of dispensing a drug contrary to the provisions of this paragraph shall be deemed to be an act which results in the drug being misbranded while held for sale.

         Section 333(a)(2), under which Ms. Chin and Ms. Thomas are charged, sets out the penalties for a violation and introduces the element of wrongful intent.

(a) Violation of section 331 of this title; second violation; intent to defraud or mislead
. . .
(2) Notwithstanding the provisions of paragraph (1) of this section, if any person commits such a violation after a conviction of him under this section has become final, or commits such a violation with the intent to defraud or mislead, such person shall be imprisoned for not more than three years or fined not more than $10, 000, or both.

         Reduced to its essence, misbranding (as charged) means the dispensing of a toxic drug in interstate commerce without a (valid) prescription and with the specific intent to defraud and mislead the United States government by concealing or failing to disclose that no valid prescription had been issued. United States v. Arlen, 947 ...


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