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.  
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