FOR IMMEDIATE RELEASE CIV MONDAY, JANUARY 9, 1995 202 616-2765 GENERIC DRUG EXECUTIVE SENTENCED TO 18 MONTHS, FINED $5,000 WASHINGTON, D.C. -- Frederick Shainfeld, a former senior vice-president of Halsey Drug Company Inc., has been sentenced to 18 months imprisonment and fined $5,000 for obstructing a U.S. Food and Drug Administration inspection of the company, the Department of Justice announced today. Halsey, based in Brooklyn, New York, manufactures generic drugs. Lynne A. Battaglia, U.S. Attorney in Baltimore, and Frank W. Hunger, Assistant Attorney General in charge of the Civil Division, said the sentencing Friday by Judge Herbert N. Maletz of U.S. District Court in Baltimore resulted from the government's continuing investigation of the generic drug industry. Shainfeld, who was in charge of Halsey's Technical and Regulatory Affairs section, pleaded guilty on May 4, 1994. Shainfeld and four other Halsey executives were indicted July 12, 1993, on charges of conspiracy to impede FDA's regulatory function, interstate distribution of adulterated and unapproved new drugs, making false statements to the FDA and obstruction of an FDA inspection. Shainfeld admitted he and others created and gave to FDA inspectors records that fraudulently misrepresented certain research and development batch sizes the FDA required to ensure that a company can in fact manufacture production quantities of a drug according to the approved formula. Halsey made smaller batches, then falsely claimed they were the required size. When the FDA investigated, Shainfeld and others, including former president and chief executive officer Jay Marcus, ordered employees to create false inventory records to hide the fact that Halsey had insufficient raw materials to make the batches in the size they represented. In addition, evidence at the trial of Hedviga Herman, Halsey's former vice-president of manufacturing, showed that Halsey added unapproved ingredients to certain drugs and falsified records to cover up those additions. The drugs included quinidine gluconate, which is used to treat heart arrhythmias; metronidazole, used to treat serious infections; and propylthiouracil, used to treat hyperthyroidism. Shainfeld and Marcus sanctioned the falsifications. Herman was convicted June 2 and sentenced to 18 months' imprisonment on September 23, 1994. Halsey pleaded guilty July 16, 1993, to five felony counts of adulterating a heart medication, quinidine gluconate in 324 milligram tablets, and was fined $2.5 million. Marcus also pleaded guilty and was sentenced to 41 months imprisonment on October 24, 1994. The case arose out of a joint investigation conducted by the FDA Special Prosecution Staff in Baltimore and agents of the FBI in Silver Spring. Battaglia expressed particular thanks to the FBI for a successful undercover investigation. The investigation of the generic drug industry by the U.S. Attorney's office, the Department's Office of Consumer Litigation and the FDA is continuing. To date, more than 50 individuals and 14 companies have pleaded to, or been found guilty of, fraud or corruption. ##### 94-015