June 2, 2016: President of Pharmaceutical Companies Sentenced to 60 Months in Prison for Long-Running Scheme to Sell Misbranded and Unapproved Chemotherapy and Other Prescription Drugs
U.S. Department of Justice Press Release
For Immediate Release
United States Department of Justice
Eastern District of New York
Earlier today in Central Islip, NY, William Scully, the president of Pharmalogical, Inc. (Pharmalogical) d/b/a Medical Device King and MDK, and Taranis Medical Corp. (Taranis), was sentenced to 60 months’ imprisonment and ordered to forfeit to the government close to $900,000 in criminal proceeds, following his conviction on November 12, 2015, after a six-week jury trial, of 64 felonies for mail and wire fraud, violations of the Food Drug & Cosmetic Act (FDCA), unlicensed wholesale distribution of prescription drugs, and multiple related conspiracy charges.
The convictions arose from Scully’s leadership role in a long-running scheme to sell misbranded and unapproved pharmaceutical products, including chemotherapy drugs for infusion into Stage 4 cancer patients, to medical providers across the United States. Evidence elicited at trial from 40 witnesses established that Scully deceived a wide array of doctors and cancer clinics into believing that he was selling legitimate FDA-approved products when, in reality, he was selling unapproved products imported through a series of unidentified middlemen in Turkey and elsewhere overseas. Many of the products Scully sold were highly sensitive, so-called “cold-chain” biologic drugs that did not have FDA-required warnings of potentially deadly side effects. The sentencing proceedings were held before U.S. District Judge Arthur D. Spatt.
The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Director George M. Karavetsos, Food and Drug Administration, Office of Criminal Investigations, New York.
“Those considering bypassing the FDA’s regulatory authority by selling unapproved and misbranded pharmaceutical products jeopardize the health and well-being of our nation’s patient population. All such individuals are on notice that they will be prosecuted to the fullest extent of the law,” stated United States Attorney Capers. Mr. Capers expressed his grateful appreciation to the FDA for its assistance in the investigation and prosecution of the defendant.
“This sentence reflects the serious nature of the defendant’s actions,” said FDA Office of Criminal Investigations Director Karavetsos. “Americans must have confidence that the drugs they are receiving are safe, effective and fully comply with U.S. laws. Our office will aggressively pursue those who place patients at risk and who seek to profit from the importation and distribution of potentially dangerous foreign unapproved drugs.”
Scully owned and operated Pharmalogical, MDK, and Taranis, which collectively sold over $17 million in pharmaceutical drugs and devices. Scully purchased these products through wholesalers overseas and received them in the United States with shipping labels stating “product samples” with “no commercial value,” even though the packages often contained tens of thousands of dollars of misbranded and unapproved prescription drugs. Scully would then execute “bait-and-switch” transactions with doctors by advertising FDA-approved products on his website but then sending them misbranded and unapproved products. Several doctors and health care professionals testified at trial that Scully deceived them into believing that the drugs they were purchasing were FDA-approved and legal. Ultimately, the drugs were infused into patients, including cancer patients and patients with Crohn’s disease.
Scully continued to sell these drugs well after his office was searched by FDA agents and all of his existing products were seized. To conceal the continued sales, he covertly set up a new company, Taranis, which he operated without a license and out of a storage space where he kept the drugs. Even after that storage space was searched and additional products were seized, Scully continued selling products to unsuspecting doctors.
The government’s case was prosecuted by Assistant United States Attorneys Charles P. Kelly and Kenneth M. Abell.
Residence: Commack, New York