July 14, 2017: Senior Executives of Medical Drug Re-Packager Plead Guilty to Defrauding Healthcare Providers
President and Pharmacist-in-Charge Distributed Cancer Drugs Contaminated With Mold
Earlier today, in federal court in Brooklyn, Gerald Tighe, the president and owner of Med Prep Consulting Inc. (Med Prep), and Stephen Kalinoski, its director of pharmacy and registered pharmacist-in-charge, pleaded guilty to wire fraud conspiracy in connection with their operation of the now-defunct Tinton Falls, New Jersey-based medical drug re-packager and compounding pharmacy. The pleas were entered before United States District Judge I. Leo Glasser.
The guilty pleas were announced by Bridget M. Rohde, Acting United States Attorney for the Eastern District of New York, and Mark McCormack, Special Agent-in-Charge of the U.S. Food and Drug Administration’s Office of Criminal Investigations, Metropolitan Washington Field Office (FDA/OCI).
According to court filings and facts presented during the plea proceeding, Med Prep processed numerous drugs, including oncology and dialysis drugs, pain medications, anesthesia drugs, and operating room drugs, in purportedly aseptic conditions. In an effort to gain market share, Med Prep repeatedly misrepresented to its customers, who consisted of hospitals and other healthcare providers, that it adhered to, and in some areas exceeded, industry standards and laws applicable to sterile drug preparation. In fact, Med Prep produced drugs in a facility that fell far short of basic industry standards of cleanliness, creating a risk to the health of already ill patients. Tighe and Kalinoski lied to healthcare providers about Med Prep’s failures to comply with basic sterility practices. Med Prep halted its production of drug products in the summer of 2013, following an incident in which it had distributed intravenous drugs containing visible mold to a Connecticut hospital.
"Today's guilty pleas mark an important step in our continuing effort to hold accountable those who pursue corporate profits over the health and safety of vulnerable patients suffering from disease,” said Acting United States Attorney Rohde. In announcing the guilty plea, Ms. Rohde gratefully acknowledged the assistance and cooperation of the United States Department of Health and Human Services, Office of the Inspector General, Office of Investigations; the United States Office of Personnel Management, Office of the Inspector General; the Department of Justice, Civil Division, Consumer Protection Branch and Commercial Litigation Branch; the FDA’s Office of the Chief Counsel; the Office of the Attorney General of New Jersey; and the New Jersey Board of Pharmacy.
“Producing unsafe and contaminated drugs poses a serious threat to the U.S. public health and cannot be tolerated,” stated FDA/OCI Special Agent-in-Charge McCormack. “The FDA remains fully committed to aggressively pursuing those who place unsuspecting American consumers at risk by distributing adulterated drugs.”
The sentencing, Tighe and Kalinoski each face up to five years in prison, a fine and the forfeiture of criminal proceeds. They will also be required to make full restitution to their victims.
The case is being prosecuted by Assistant United States Attorneys Alixandra E. Smith, Ameet B. Kabrawala and Erin E. Argo.
West Long Branch, New Jersey
Middletown, New Jersey
E.D.N.Y. Docket No. 15-CR-62 (ILG)
John Marzulli Tyler Daniels United States Attorney’s Office (718) 254-6323