December 19, 2017: Senior Executives of Medical Drug Repackager Sentenced for Defrauding Healthcare Providers
Earlier today, in federal court in Brooklyn, Gerald Tighe and Stephen Kalinoski, were sentenced by United States District Court Judge I. Leo Glasser to six months’ home confinement, four years’ probation, and 300 hours of community service, for wire fraud conspiracy in connection with their operation of Med Prep Consulting, Inc. (Med Prep), a now-defunct Tinton Falls, New Jersey-based medical drug repackager and compounding pharmacy, which sold adulterated and contaminated drug products to healthcare providers across the country. As part of their sentences, Kalinoski will forfeit $140,000 of criminal proceeds to the government. The amount of forfeiture owed by Tighe and the amount of restitution both defendants must pay to Yale-New Haven Hospital, which discovered it had received drug products from Med Prep contaminated with mold, will be determined by the Court at a later date. The defendants pleaded guilty to the charges on July 14, 2017.
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), announced the sentence.
“Gerald Tighe and Stephen Kalinoski, motivated by a desire to increase profits and cut costs, put patients already suffering from serious illnesses at further risk by distributing drugs that were contaminated or mislabeled,” stated Acting United States Attorney Rohde. “We will continue to investigate and prosecute those drug repackagers and compounding pharmacies that would place corporate greed ahead of patient safety.” Ms. Rohde gratefully acknowledged the assistance and cooperation of the FDA’s Office of Criminal Investigations; 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.
The case is being prosecuted by Assistant United States Attorneys Alixandra E. Smith, Ameet B. Kabrawala and Erin E. Argo, with assistance provided by Assistant United States Attorney Tanya Hill of the Office’s Civil Division.
West Long Branch, New Jersey
Middletown, New Jersey
E.D.N.Y. Docket No. 15 CR 62 (ILG)
Health Care Fraud
John Marzulli Tyler Daniels United States Attorney’s Office (718) 254-6323
According to court filings and facts presented during the sentencing, 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 were 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 even the most basic industry standards of cleanliness, creating a risk to the health of already ill patients. Tighe, as Med Prep’s president and owner, and Kalinoski, as its director of pharmacy and registered pharmacist-in-charge, 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 Yale-New Haven Hospital.