CONCORD, NH: Beth Handy, of Milford, NH, was sentenced yesterday to 24 months in prison to be followed by three years of supervised release for illegally acquiring and distributing Serostim, an injectable drug approved for the treatment of AIDS-wasting syndrome in HIV infected patients. United States District Court Judge Paul J. Barbadoro also entered an order of forfeiture against Handy for the sum of $250,000 announced United States Attorney John P. Kacavas.

Handy, who was licensed by the State of New Hampshire as a wholesale distributor of prescription drugs, previously pleaded guilty to an Indictment charging her with wire fraud, money laundering, engaging in unlicensed wholesale distribution of prescription drugs, and false statements in a matter within the jurisdiction of the U.S. Food and Drug Administration.

The scheme involved purchasing large quantities of Serostim from illegitimate sources in Palm Springs and Los Angeles, California, at prices significantly below the price that the manufacturer charges pharmacies. Specifically, the Serostim was purchased from HIV-infected patients and then reintroduced into the wholesale distribution chain by using false documentation to make it appear that the Serostim had come from legitimate licensed wholesalers. Serostim, which is manufactured by Serono, Inc., of Massachusetts, is distributed in a secured distribution network whereby the manufacturer ships the drug directly to pharmacies who have contracts with Serono. These pharmacies then dispense the drug directly to patients.

Handy also conspired with Robert McFadden, a Palm Springs, CA attorney who used his client trust account to receive money from the purchasers of the prescription drugs and to pay the illegal suppliers of the Serostim. Over $2.1 million dollars was funneled through McFadden’s client trust account in furtherance of the scheme. On January 27, 2009, a federal jury in Concord convicted McFadden for his role in the scheme. He was sentenced to 36 months in prison followed by three years of supervised release.

The case was investigated by Special Agents of the Food and Drug Administration, Office of Criminal Investigations; the Internal Revenue Service; and Health and Human Services, Office of the Inspector General. The case was prosecuted by Special Assistant U.S. Attorney Sarah Hawkins and Assistant U.S. Attorneys Aixa Maldonado-Quinones and Mark Irish.

 

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