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22.

Animal Drug Prosecutions -- Sample Indictment

IN THE UNITED STATES DISTRICT COURT

FOR THE Western DISTRICT OF Wisconsin

) UNITED STATES OF AMERICA, ) INDICTMENT ) v. ) No. _______________ ) 18 U.S.C. § 371 XXXXXXX X. XXX XXXXX, and ) 21 U.S.C. § 331 XXXXXXX X. XXXXXXXX, ) 21 U.S.C. § 333(a)(2) ) [before July 22, 1988, Defendants. ) 21 U.S.C. § 333(a)(2) was ) codified at 21 U.S.C. ) § 333(b)] )

THE GRAND JURY CHARGES:

COUNT 1

(CONSPIRACY)

INTRODUCTORY ALLEGATIONS

At times material to this Indictment:

1. The United States Food and Drug Administration ("FDA") was the agency responsible for protecting the American public by ensuring, among other things, that drugs used in animals (hereafter "animal drugs"), particularly in animals that produce meat, milk, and eggs for human consumption (hereafter "food-producing animals"), were safe and effective for their intended uses.

2. As used in this Indictment, "animal drugs" were drugs within the meaning of the Federal Food, Drug, and Cosmetic Act (hereafter the "Food and Drug Act"), and included drugs in concentrated form, often called "bulk drugs," that required further processing prior to use (hereafter "bulk drugs") and drugs in finished or dosage form. 21 U.S.C. § 321(g)(1).

Adulterated Drugs

3. The Food and Drug Act prohibited the distribution of a new animal drug in interstate commerce without FDA approval. Obtaining approval from the FDA required the submission of a "new animal drug application" containing extensive scientific data and other information about the drug, including information about the safety and effectiveness of the drug and proposed directions for the use of the drug. Under the Food and Drug Act, a new animal drug that was not covered by a new animal drug application, approved by the FDA, was "adulterated." 21 U.S.C. §§ 331, 351(a)(5).

4. The Food and Drug Act prohibited the distribution of animal drugs in interstate commerce unless they were manufactured, processed, packed, and held according to "good manufacturing practice," quality controls that are intended to assure that each batch of a drug is of consistent identity, potency, quality, and purity. Among other things, good manufacturing practice required drug manufacturers to test the identity and purity of raw ingredients and of drugs made from those ingredients, and to keep accurate, complete, and contemporaneous records of manufacturing and testing processes so the manufacturer and FDA could evaluate the safety and effectiveness of the drugs. In the case of an "injectable" drug, good manufacturing practice required that the finished product be sterile, so that use of the drug would not cause infections or other diseases. Under the Food and Drug Act, a drug that was not manufactured, processed, packed, or held according to good manufacturing practice was "adulterated." 21 U.S.C. §§ 331, 351(a)(2).

Misbranded Drugs

5. The Food and Drug Act prohibited the distribution of an animal drug in interstate commerce unless the label on that drug bore the name and place of business of the manufacturer, packer, or distributor. Under the Food and Drug Act, a drug that did not bear this information on its label was "misbranded." 21 U.S.C. §§ 331, 352(b)(1).

6. The Food and Drug Act prohibited the distribution of an animal drug in interstate commerce unless its labeling bore adequate directions for use (i.e., directions that would enable not only veterinarians, but also lay persons such as farmers and livestock owners, to use the drug safely and effectively.) Adequate directions for use would have included such information as the disease condition for which the drug could be used; the type of animal in which the drug could be used; the proper dosage of the drug; the proper method of administering the drug; and, if applicable, the amount of time that had to pass between the last use of the drug and the time that milk obtained from the animal could be sold (hereafter "milk withhold" time) and between the last use of the drug and the time the treated animal could be slaughtered for food (hereafter "slaughter withhold" time). Under the Food and Drug Act, a drug that did not have adequate directions for use was "misbranded." 21 U.S.C. §§ 331, 352(f)(1).

7. Under the Food and Drug Act (with exceptions that do not apply in this case), persons who manufactured, prepared, propagated, compounded, or processed drugs were required to register annually with the FDA so that the FDA could assure that the drug was manufactured, processed, packed, and held in compliance with good manufacturing practice, drug labeling rules, and other requirements intended to ensure that the drug was safe and effective for its intended use or uses. Under the Food and Drug Act, a drug that was not manufactured, prepared, compounded, or processed in an establishment registered with the FDA was "misbranded." 21 U.S.C. §§ 360; 352(o).

The Defendants

8. XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX were directors and shareholders of the Family Veterinary Clinic, Ltd., 21st & Vermont, Happy Valley, Wisconsin. [NOTE: names and places changed from original.]

9. Beginning in or about 1984 and continuing until in or about 1989, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX were officers of Whodunit Veterinary Products, Inc., a Wisconsin corporation. From in or about October 1984 until in or about April 1992, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX maintained a telephone number registered to Whodunit Veterinary Products.

10. From in or about June 1987 until in or about August 1989, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX were officers of KGB Enterprises, Inc., a Wisconsin corporation. Thereafter, until in or about 1992, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX continued to do business as KGB Enterprises and KGB Partners (hereafter " KGB Enterprises" or " KGB").

THE CONSPIRACY

11. Beginning at a time unknown to the Grand Jury, but at least as early as August 1986, and continuing until in or about October 1992, the exact dates being unknown to the Grand Jury, within the Western District of Wisconsin and elsewhere, the defendants,

XXXXXXX X. XXX XXXXX and

XXXXXXX X. XXXXXXXX,

and other individuals known and unknown to the Grand Jury, knowingly and willfully combined, conspired, and agreed to defraud the U.S. Food and Drug Administration, an agency of the United States, by impairing, impeding and defeating its lawful function of regulating the manufacture and distribution of drugs used in food-producing animals.

PLAN AND PURPOSE

12. It was part of the plan and purpose of this conspiracy that XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX, after receiving a "Regulatory Letter" from the FDA, continued to unlawfully manufacture and distribute animal drugs. This Regulatory Letter, dated July 22, 1986, warned XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX that they were manufacturing and distributing drugs in violation of the Food and Drug Act.

13. It was further part of the plan and purpose of this conspiracy that XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX, after receiving the FDA's Regulatory Letter, changed the name of their drug manufacturing and distribution business from Whodunit Veterinary Products, Inc., to KGB Enterprises, Inc. and KGB Partners, and took other steps to avoid being inspected and regulated by the FDA.

14. It was further part of the plan and purpose of this conspiracy that XXXXXXX X. XXX XXXXX purchased bulk drugs that were not approved by the FDA as safe and effective for their intended uses and that were not properly labeled.

15. It was further part of the plan and purpose of this conspiracy that XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX manufactured finished or dosage-form drugs, and caused the manufacture of finished or dosage-form drugs, at the Family Veterinary Clinic, in the basement of the Funlovers' Inn, 800 11th Avenue, Happy Valley, Wisconsin, and elsewhere, without registering these establishments with the FDA, as required, and without complying with good manufacturing practice.

16. It was further part of the plan and purpose of this conspiracy that XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX did not label KGB's drugs with adequate directions for use, with the name and place of business of the manufacturer, packer, or distributor, and with other information required by law.

17. It was further part of the plan and purpose of this conspiracy that, after receiving the FDA's Regulatory Letter, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX, for profit, distributed hundreds of thousands of dollars worth of adulterated and misbranded animal drugs to veterinarians in Wisconsin, Minnesota, and elsewhere.

OVERT ACTS

18. In furtherance of the conspiracy and to effect the plan and purpose thereof, the defendants, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX, committed and caused to be committed the following overt acts, among others, within the Western District of Wisconsin, and elsewhere:

(a) On or about August 4, 1986, in response to a Regulatory Letter from the FDA, XXXXXXX X. XXX XXXXX wrote to the FDA, falsely stating: "We are correcting the violations stated in that letter by limiting these drugs to the scope of our veterinary practice."

(b) In or about September 1986, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX began distributing drugs using invoices that were not imprinted with any business name or address.

(c-d) On or about the following dates, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX sold misbranded animal drugs to other veterinarians; each such sale being a separate overt act:

                    Drug
         Date       Invoiced   Drug Ordered    Purchaser
                    As

(c) 10/15/86 AB-43 Rifampin Lewiston Vet Cl. Lewiston, MN (d) 12/15/86 AB-38 GNRH Winona Vet Clinic Winona, MN

(e) On or about March 23, 1987, XXXXXXX X. XXX XXXXX falsely told an FDA investigator that neither he nor the Family Veterinary Clinic was distributing drugs to other veterinarians.

(f-g) On or about the following dates, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX sold misbranded animal drugs to other veterinarians; each such sale being a separate overt act:

                     Drug         
           Date      Invoiced   Drug Ordered   Purchaser
                     As

(f) 3/23/87 AB-33 Equipoise Lewiston Vet Cl. Lewiston, MN

(g) 5/4/87 AB-38 Generic Lewiston Vet Cl. Cystorellin Lewiston, MN

(h-k) On or about the following dates, XXXXXXX X. XXX XXXXX wrote the check or checks shown below, drawn on the KGB Enterprise account at the First National Bank in Happy Valley, Wisconsin, to pay for the purchase of bulk drugs; each such instance being a separate overt act:

            Date       Check(s)    Amount    Payee

(h) 8/31/87 1006 $23,200 NVP

(i) 4/25/89 1389 $ 4,000 XXXXXX XXXXX

1390 $ 4,000 XXXXXX XXXXX

1391 $ 4,000 XXXXXX XXXXX

1392 $ 4,000 XXXXXX XXXXX

1393 $ 4,000 XXXXXX XXXXX

(j) 2/19/91 1026 $ 3,950 Socomin-Quimed

1027 $ 3,950 Socomin-Quimed

(k) 2/25/91 1028 $ 2,030 Transo-Pharm

1029 $ 2,030 Transo-Pharm

(l) On or about February 1, 1989, XXXXXXX X. XXX XXXXX obtained a nonpublished telephone number (715-684-3011) in the name Whodunit Veterinary Products.

(m) In or about August 1989, XXXXXXX X. XXXXXXXX arranged for his father to receive in Playful, Iowa, on behalf of KGB, a shipment of 100 kilograms (approximately 220 pounds) of a drug invoiced as ampicillin trihydrate.

(n-r) On or about the following dates, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX, sold misbranded animal drugs to veterinary clinics; each such sale being a separate overt act:
               Drug
     Date      Invoiced   Drug Ordered    Purchaser
               As

(n) 4/24/90 AB-43 Clenbuterol Winona Vet Clinic Winona, MN

(o) 7/11/90 AB-43 Clenbuterol Lewiston Vet Cl. Lewiston, MN

(p) 8/18/90 AB-43 Clenbuterol Heritage Anim. Hosp. Hortonville, WI

(q) 2/6/91 AB-36DC Rifampin DC Grassland Vet Serv. Granton, WI

(r) 11/26/91 AB-36 Rifampin Bluff Country Vet Solution Caledonia, MN

(s) In or about the fall of 1991, XXXXXXX X. XXX XXXXX stored animal drugs above a ceiling at the Family Veterinary Clinic.
(t) In or about the summer of 1992, XXXXXXX X. XXX XXXXX sent substitute invoices to a veterinary clinic in Hortonville, Wisconsin, to replace original invoices issued by KGB on which the veterinary clinic had written the true names of the drugs that had been sent to it by KGB.

(u) On or about October 3, 1992, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX held for sale at the Family Veterinary Clinic the drug Clenbuterol, a drug that was not approved by the FDA as safe and effective for use in food-producing animals and that was stored in unlabeled containers in a box labeled "Breathe Easy."

(v) On or about October 3, 1992, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX held for sale at the Family Veterinary Clinic the drug Metronidazole, labeled in part "Metronidazole 500 mg," a drug that was a demonstrated carcinogen in laboratory animals and that was not approved by the FDA as safe and effective for use in food-producing animals.

(w) On or about October 3, 1992, XXXXXXX X. XXX XXXXX and XXXXXXX X. XXXXXXXX held for sale at the Family Veterinary Clinic a drug composed of clotrimazole and sulfamethoxazole, labeled in part "Clotrimazole/Gantanol," a drug that was not approved by the FDA as safe and effective for use in food-producing animals.

All in violation of Title 18, United States Code, Section 371.

COUNT 2

(ADULTERATED DRUG)

1. Paragraphs 1 through 10 of Count 1 are hereby realleged and incorporated by reference as if set forth in full herein.

2. On or about November 26, 1992, within the Western District of Wisconsin, the defendants,

XXXXXXX X. XXX XXXXX and

XXXXXXX X. XXXXXXXX,

with the intent to defraud and mislead, introduced and delivered for introduction into interstate commerce, at Happy Valley, Wisconsin, for delivery to Caledonia, Minnesota, a drug labeled "Rifampin Solution 150 mg/30 ml," which drug was adulterated within the meaning of Title 21, United States Code, Section 351(a)(2)(B), in that the methods used in, and the facilities and controls used for, its manufacture, processing, packing, and holding, did not conform to and were not operated in conformity with current good manufacturing practice.

All in violation of Title 21, United States Code, Sections 331(a) and 333(a)(2).

COUNT 3

(MISBRANDED DRUG)

1. Paragraphs 1 through 10 of Count 1 are hereby realleged and incorporated by reference as if set forth in full herein.

2. Between on about January 25, 1991, and on or about February 1, 1992, within the Western District of Wisconsin, the defendant,

XXXXXXX X. XXX XXXXX,

with the intent to defraud and mislead, caused to be introduced and delivered for introduction into interstate commerce, from Germany to Happy Valley, Wisconsin, 10 kilograms of Griseofulvin, a drug, that was misbranded within the meaning of Title 21, United States Code, Section 352(f)(1), in that the labeling of this drug did not bear adequate directions for use because it contained no directions for use.

All in violation of Title 21 United States Code, Sections 331(a) and 333(a)(2).

COUNT 4 AND COUNT 5

(MISBRANDED DRUGS)

1. Paragraphs 1 through 10 of Count 1 are hereby realleged and incorporated by reference as if set forth in full herein.

2. On or about the dates set forth below, within the Western District of Wisconsin, the defendants,

XXXXXXX X. XXX XXXXX and

XXXXXXX X. XXXXXXXX,

with the intent to defraud and mislead, introduced and delivered for introduction into interstate commerce, and caused to be introduced and delivered for introduction into interstate commerce, at Happy Valley, Wisconsin, to the destinations listed below, the drugs listed below, which were misbranded within the meaning of Title 21, United States Code, Section 352(f)(1), in that the labeling of these drugs did not bear adequate directions for use because they contained no directions for use; each such act being a separate count of this Indictment:

Approximate

Count    Date       Drug Labeled As     Destination

4 10/29/91 Rifampin Solution Casselman Vet 150 mg/30 ml Grantsville, MD

5 12/14/91 Neo-Meth Powder Todd County Vet Clarissa, MN

All in violation of Title 21 United States Code, Sections 331(a) and 333(a)(2).

COUNT 6

(UNREGISTERED DRUG MANUFACTURING)

1. Paragraphs 1 through 10 of Count 1 are hereby realleged and incorporated by reference as if set forth in full herein.

2. From in or about 1987 until in or about June 1992, the exact dates being unknown to the Grand Jury, within the Western District of Wisconsin,

XXXXXXX X. XXX XXXXX and

XXXXXXX X. XXXXXXXX

did own and operate the Family Veterinary Clinic, 11th & Hillcrest, in Happy Valley, Wisconsin, an establishment that manufactured, prepared, propagated, compounded, and processed drugs, and, with the intent to defraud and mislead, did fail to register this establishment with the U.S. Food and Drug Administration, as required by 21 U.S.C. § 360.

All in violation of Title 21, United States Code, Sections 331(p) and 333(a)(2).

COUNT 7

(UNREGISTERED DRUG MANUFACTURING)

1. Paragraphs 1 through 10 of Count 1 are hereby realleged and incorporated by reference as if set forth in full herein.
2. From in or about 1989 until in or about 1991, the exact dates being unknown to the Grand Jury, within the Western District of Wisconsin,

XXXXXXX X. XXX XXXXX and

XXXXXXX X. XXXXXXXX

did manufacture, prepare, propagate, compound, and process drugs in the basement of a house known as the "Funlovers' Inn," which was operated as a bed-and-breakfast inn and was located at 800 11th Avenue, in Happy Valley, Wisconsin, and, with the intent to defraud and mislead, did fail to register this establishment with the U.S. Food and Drug Administration, as required by 21 U.S.C. § 360.

All in violation of Title 21, United States Code, Sections 331(p) and 333(a)(2).

A TRUE BILL

___________________________
FOREPERSON

___________________________
Grant C. Johnson
United States Attorney

Indictment Returned:

[cited in USAM 4-8.255]