Majority Owner of NECC and Husband Sentenced for Illegal Cash Withdrawals Following Outbreak
Couple withdrew approximately $124,000 in structured cash transactions following the 2012 fungal meningitis outbreak
BOSTON – The majority owner of New England Compounding Center (NECC) and her husband were sentenced today in U.S. District Court in Boston in connection with illegally withdrawing cash following the 2012 fungal meningitis outbreak.
Carla Conigliaro, 53, of Dedham, Mass., the majority owner of NECC was sentenced by U.S. District Court Judge Richard G. Stearns to one year of probation and ordered to forfeit $4,600 and to pay a fine of $4,500. Her husband, Douglas Conigliaro, 55, also of Dedham, Mass., was sentenced by Judge Stearns to two years of probation and ordered to forfeit $119,647 and to pay a fine of $55,000. In July 2016, they each pleaded guilty to withdrawing cash from their bank accounts in a manner intended to defeat financial reporting requirements.
In September 2012, a nationwide outbreak of fungal meningitis was traced back to contaminated vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC, a compounding pharmacy located in Framingham, Mass. Beginning on Oct. 31, 2012, the day a search warrant was executed at NECC, Carla and Douglas Conigliaro began withdrawing unusual sums of cash from their personal bank accounts. The cash transactions were structured by the Conigliaros in a manner so as to evade the $10,000 reporting requirement for the filing of a currency transaction report. The Conigliaros admitted to withdrawing $124,000 in cash in this manner.
In December 2014, following a two-year investigation, the Conigliaros and 12 other employees and associates of NECC were charged in a federal indictment. The indictment did not charge the Conigliaros with having an active role in the operations or management of NECC, but did charge them with transferring assets following the fungal meningitis outbreak.
NECC’s owner and head pharmacist Barry J. Cadden and supervisory pharmacist Glenn A. Chin were charged with 25 racketeering acts of second-degree murder in seven states. Ten other defendants, including six pharmacists, the director of operations, the national sales director, an unlicensed pharmacy technician, and another owner, were charged with additional crimes including racketeering, mail fraud, conspiracy, and violations of the Food, Drug and Cosmetic Act. Cadden and Chin are scheduled to stand trial on Jan. 5, 2017.
United States Attorney Carmen M. Ortiz; Jeffrey J. Ebersole, Special Agent in Charge of the U.S. Food and Drug Administration, Office of Criminal Investigations, New York Field Office; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; Donna Nieves, Special Agent in Charge of the U.S. Department of Veterans Affairs, Office of Inspector General, Northeast Field Office; Craig Rupert, Special Agent in Charge of the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office; and Shelly Binkowski, Inspector in Charge of the U.S. Postal Inspection Service, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys George P. Varghese and Amanda P.M. Strachan of Ortiz’s Health Care Fraud Unit and John W.M. Claud of the Justice Department’s Consumer Protection Branch.
The details contained in the indictment are allegations. The defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.