Food and Drug Administration
Office of Criminal Investigations
U.S. Department of Justice Press Release
For Immediate Release
January 31, 2014
United States Attorney
Western District of Michigan
GRAND RAPIDS, MICHIGAN - U.S. Attorney Patrick Miles announced today that a federal grand jury returned a Second Superseding Indictment levelling additional charges against Kim Mulder, the CEO of Kentwood Pharmacy, and thirteen employees of the pharmacy.
The indictment charges that Mulder conspired with Richard Clarke, Kentwood Pharmacy's Director of Sales, and Lawrence Harden, Kentwood Pharmacy's Chief Pharmacist, to return, restock and redispense drugs that were previously dispensed to nursing homes and adult foster care homes. By allegedly submitting claims for drugs that were misbranded, adulterated and dispensed in violation of federal and state laws, the indictment charges that the defendants defrauded Medicare, Medicaid and Blue Cross Blue Shield of Michigan. The indictment alleges that Kentwood Pharmacy received in excess of $70,000,000 from these health care benefit programs, and the government is seeking to forfeit more than $60,000,000 as a result of the alleged health care fraud. Conspiracy to commit health care fraud is punishable by up to ten years of imprisonment and a fine of $250,000 or twice the gross gain of the offense.
Mulder, Clarke, Harden and six other Kentwood Pharmacy employees also face a charge of conspiracy to misbrand drugs which was part of an earlier indictment. The conspiracy to misbrand drugs alleges that the defendants placed returned drugs into stock bottles, which bore incorrect lot numbers and expiration dates, and into amber pill vials which bore no lot numbers or expiration dates. The misbranding conspiracy also charges that a number of the defendants took actions to conceal this conduct by sorting returned drugs at unlicensed off-site locations, including a strip mall office and the basement of the chief pharmacist's home. Conspiracy to misbrand drugs is punishable by up to five years of imprisonment and a $250,000 fine.
A third charge alleges that Mulder, chief pharmacist Lawrence Harden, and a billing manager conspired to create false prescription records. This charge is punishable by up to five years of imprisonment and a $250,000 fine.
Mulder also faces three counts of money laundering and a single count of structuring monetary transactions to avoid bank reporting requirements. The money laundering charges are each punishable by up to ten years of imprisonment and a $250,000 fine and the structuring charge is punishable by up to three years of imprisonment and a $250,000 fine.
In addition to the felony charges, the Second Superseding Indictment also charges five additional Kentwood Pharmacy Employees, who were allegedly involved with the sorting and packing of the returned drugs, with misdemeanor misbranding offenses punishable by up to one year of imprisonment.
In November 2013, U.S. District Judge Janet T. Neff sentenced three semi-retired pharmacists to fines ranging from $15,000 to $30,000 on charges of felony misbranding of drugs related to their part time employment at Kentwood Pharmacy.
The ongoing investigation of this matter involves the FDA, FBI, DEA, HSS-OIG, IRS, and the Michigan State Police. Assistant U.S. Attorney Ray Beckering is the prosecutor.
The charges in any indictment are merely accusations, and these defendants are presumed innocent until and unless proven guilty in a court of law.
If Michigan residents or medical professionals suspect possible violations of law or other dangerous practices involving pharmacies or prescription drugs, they can contact: the FDA at http://www.fda.gov/ICECI/criminalInvestigations/default.htm, or the DEA at http://www.justice.gov/dea/ops/submit.php.