CEO of Kentwood Pharmacy Pleads Guilty
For Immediate Release
U.S. Attorney's Office, Western District of Michigan
GRAND RAPIDS, MICHIGAN – Kim Duron Mulder, 55, formerly of Grand Rapids, and Charles Wayne Brooks, 63, of Alma, entered guilty pleas today before United States District Judge Robert J. Jonker on charges related to the illegal restocking and re-dispensing of recycled drugs at Kentwood Pharmacy. Mr. Mulder, formerly the CEO of Kentwood Pharmacy, pled guilty to a conspiracy to commit health care fraud based on billing Medicare, Medicaid, and private insurance plans for misbranded and adulterated drugs. Mr. Brooks, a pharmacist at Kentwood Pharmacy’s facility in Alma, pled guilty to misbranding prescription drugs that had been previously dispensed and returned to pharmacy stock. Mr. Mulder faces up to ten years’ imprisonment; Mr. Brooks faces up to three years’ imprisonment.
The convictions of Messrs. Mulder and Brooks conclude the federal prosecution of individuals involved with Kentwood Pharmacy. A total of 18 people were convicted of criminal offenses stemming from the practices at Kentwood Pharmacy, including the felony convictions of six licensed pharmacists. Most recently, in December 2014, Judge Jonker sentenced Richard Clarke, formerly Kentwood Pharmacy’s Vice President of Sales, to 14 years in prison for his involvement in a conspiracy to commit health care fraud and a separate charge of possession of child pornography. In December 2014, Judge Jonker also sentenced pharmacist Lawrence Harden to six years’ imprisonment for his involvement in the conspiracy to commit health care fraud. As part of the sentencing hearings, Judge Jonker found that public and private insurers paid more $80,000,000.00 for adulterated and misbranded drugs. Judge Jonker found that Messrs. Clarke and Harden were responsible for restitution amounts of over $8,000,000.00 and $6,000,000.00, respectively.
The federal investigation revealed that Kentwood Pharmacy violated state pharmacy rules and federal law by recycling drugs that were returned from nursing homes and adult foster care homes. These included cross-contaminated drugs that were previously mixed together, drugs bearing foreign substances and residues, and discolored and expired medications. The process by which Kentwood Pharmacy returned drugs to pharmacy stock resulted in the improper labeling of drugs, the placement of different drug dosages into stock bottles, and the placement of the altogether wrong drugs into stock bottles. Because Kentwood Pharmacy did not trace the returned drugs, at least one defendant was able to take and sell controlled prescriptions on the street in northern Michigan.
U.S. Attorney Patrick Miles said, “The Federal Food Drug and Cosmetic Act provides an essential regulatory framework to safeguard the public’s use of prescription drugs. These federal regulations are buttressed by explicit state laws which strictly limit the reuse of drugs which have left the control of pharmacies. The public must be able rely on pharmacists who have both professional and statutory duties to ensure that pharmacies operate in compliance with these federal and state laws regulating the handling, packaging, and distribution of drugs.”
This case was investigated by the U.S. Food and Drug Administration, the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, the U.S. Department of Health and Human Services, and the Internal Revenue Service. Assistant U.S. Attorneys Raymond E. Beckering III and Adam B. Townshend prosecuted the cases on behalf of the United States.
The investigation of this case was initiated by confidential tips. If Michigan residents or medical professionals suspect possible violations of law or other dangerous practices involving pharmacies or prescription drugs, they can contact the FDA or the DEA.
Updated February 25, 2015
Health Care Fraud