Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 1 of 73 UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS. UNITED STATES OF AMERICA v. (1) BARRY J. CADDEN, (2) GLENN A. CHIN, (3) GENE SVIRSKIY, (4) CHRISTOPHER M. LEARY, (5) JOSEPH M. EVANOSKY, (6) SCOTT M. CONNOLLY, (7) SHARON P. CARTER, (8) ALLA V. STEPANETS, (9) GREGORY A. CONIGLIARO, (10) ROBERT A. RONZIO, (11) KATHY S. CHIN, (12) MICHELLE L. THOMAS, (13) CARLA R. CONIGLIARO, (14) DOUGLAS A. CONIGLIARO, Defendants. IYeR lo363-L65 CRIMINAL NO. x4 VIOLATIONS: 18 U.S.C. § 1962(c) (Racketeering); 18 U.S.C. § 1962(d) (Racket Conspiracy); ing 18 U.S.C. § 371 (Conspiracy); 18 U.S.C. § 1341 (Mail Fraud); 21 U.S.C. § 331(a) (Introduction of Adulterated Drugs into Interstate Commerce); 21 U.S.C. § 331(a) (Introduction of Misbranded Drugs into Interstate Commerce); 18 U.S.C. § 401(3) (Contempt); 31 U.S.C. § 5324 (Structuring); 18 U.S.C. § 2 (Aiding and Abetting); 18 U.S.C. §§ 1963; 981(a(1NXO)s 21 U.S.C. § 853; 31 U.S.C. § 5317; & 28 U.S.C. § 2461(c) (Forfeiture) THE GRAND JURY CHARGES THAT: PRELIMINARY ALLEGATIONS Atall times material hereto, unless otherwise alleged:Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 2 of 73 J, New England Compounding Pharmacy, Inc., doing business as New England Compounding Center (*NECC”), was a Massachusetts corporation licensed as a pharmacy in the Commonwealth of Massachusetts by the Massachusetts Board of Registration in Pharmacy (MABOP"), NEC's principal place of business was located in Framingham, Massachusetts From in or about 1998 until October 2012, NECC held itself out as a compounding-only pharmacy. Compounding was the preparation, mixing, assembling, packaging, and labeling of a drug pursuant to a valid, patient-specific prescription from a medical practitioner. NECC made ‘purportedly sterile drugs within two clean rooms — Clean Room 1 and Clean Room 2 — whi were purported to be controlled environments with low levels of environmental contamination. NECC sold drugs identified as sterile to medical facilities located throughout the country. From January through October 2012, NEC generated revenue of approximately $32.4 million. 2. Medical Sales Management, Inc. (*MSM") was a Massachusetts corporation that shared ownership with NECC. MSM provided sales and administrative services to NECC, including a sales force, finance department, purchasing department, human resources department, and information technology. MSM was paid a service fee by NECC, MSM’s sales representatives sold drugs on behalf of NECC to customers throughout the country. The Defendants 3. The defendant BARRY J. CADDEN (“CADDEN”) was an individual residing in Wrentham, Massachusetts, Defendant CADDEN was a pharmacist licensed in the Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant to a valid prescription from a medical practitioner. Defendant CADDEN was an owner and director of NECC, and served as NECC’s President, head pharmacist, and Manager of Record, Defendant CADDEN oversaw all of the operations of NECC. Defendant CADDEN was an owner and Page 2Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 3 of 73 director of MSM, and served as MSM’s Treasurer. Defendant CADDEN trained and instructed the MSM sales representatives, and routinely communicated with them about specific customer orders and accounts. 4. ‘The defendant GLENN A. CHIN (“CHIN”) was an individual residing in Canton, Massachusetts. CHIN was a pharmacist licensed in the Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant (o a valid prescription ftom a medical practitioner. From in or about April 2004 until October 2012, CHIN was employed as a pharmacist at NECC. In or about January 2010, CHIN was promoted to a supervisory pharmacist role at NECC, overseeing all aspects of NECC’s production and personnel in the two clean rooms. 5. The defendant GENE SVIRSKIY (“SVIRSKIY”) was an individual residing in Ashland, Massachusetts. SVIRSKIY was a pharmacist licensed in the Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant to a valid prescription from a medical practitioner, From in or about August 2007 until October 2012, SVIRSKIY was employed as a pharmacist at NECC. SVIRSKIY worked in Clean Room 1, and was a supervising pharmacist in Clean Room 2. 6. The defendant CHRISTOPHER M. LEARY (“LEARY”) was an individual residing in Marlborough, Massachusetts. LEARY was a pharmacist licensed in the Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant to a valid prescription from a medical practitioner, From in or about March 2011 until October 2012, LEARY was employed as a pharmacist at NECC. LEARY worked in Clean Rooms 1 and 2. 7. The defendant JOSEPH M. EVANOSKY (“EVANOSKY”) was an individual residing in Haverhill, Massachusetts. EVANOSKY was a pharmacist licensed in the Commonwealth of Massachuseits by the MABOP to dispense drugs pursuant to a valid Page 3Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 4 of 73 prescription from a medical pract joner, From in or about April 2011 until October 2012, EVANOSKY was employed as a pharmacist at NECC, EVANOSKY worked in Clean Room 1 8. The defendant SCOTT M. CONNOLLY (“CONNOLLY”) was an individual residing in Brockton, Massachusetts. From in or about September 2007 until January 2009, CONNOLLY was a pharmacy technician licensed in the Commonwealth of Massachusetts by the MABOP. Pharmacy technicians assisted licensed pharmacists in dispensing prescription drugs. Inor around January 2009, CONNOLLY voluntarily surrendered his pharmacy technician license in connection with a disciplinary action. From in or about January 2010 until August 2012, CONNOLLY was employed as a pharmacist technician at NECC, CONNOLLY worked as a pharmacy technician in Clean Room 2. 9. ‘The defendant SHARON P. CARTER (“CARTER”) was an individual residing in Hopkinton, Massachusetts. CARTER was a pharmacy technician licensed in the Commonwealth of Massachusetts by the MABOP. Beginning in or about September 2000, CARTER was employed at NECC in various capacities. In or about February 2012, CARTER was promoted to the position of NECC’s Director of Operations, overseeing NECC’s order processing, packaging, and shipping personnel. 10. The defendant ALLA V. STEPANETS (“STEPANETS”) was an individual residing in Framingham, Massachusetts. STEPANETS was a pharmacist licensed in the ‘Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant to a valid prescription from a medical practitioner. From in or about January 2008 until October 2012, STEPANETS was employed as a pharmacist at NECC. STEPANETS worked in, among other areas at NECC, the packing area checking orders prior to shipment to NECC’s customers, PageCase 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 5 of 73 11, The defendant GREGORY A. CONIGLIARO (“GREG CONIGLIARO”) was an individual residing in Southborough, Massachusetts. GREG CONIGLIARO was an owner and director of NECC, and served as NECC’s Vice President, Secretary, Treasurer, and General Manager. GREG CONIGLIARO was responsible for regulatory compliance for NECC. GREG CONIGLIARO was an owner and director of MSM, and served as MSM’s Secretary. 12, ‘The defendant ROBERT A. RONZIO (“RONZIO”) was an individual residing in North Providence, Rhode Island. Beginning in or about February 2010, RONZIO was employed at MSM. Beginning in or about September 2011, RONZIO served as the national sales director for NEC, and supervised the MSM sales representatives assigned to sell NECC drugs. 13, ‘The defendant KATHY S, CHIN (“KATHY CHIN”) was an individual residing in Canton, Massachusetts. KATHY CHIN was a pharmacist licensed in the Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant to a valid prescription from a medical practitioner. From in or about November 2010 until October 2012, KATHY CHIN was employed as a pharmacist at NECC, KATHY CHIN worked in the packing area checking orders, prior to shipment to NECC’s customers. 14, The defendant MICHELLE L. THOMAS (“THOMAS”) was an individual residing in Framingham, Massachusetts. THOMAS was a pharmacist licensed in the Commonwealth of Massachusetts by the MABOP to dispense drugs pursuant to a valid prescription from a medical practitioner. From in or about March 2012 until August 2012, THOMAS was employed as a pharmacist at NECC, THOMAS worked in the packing area checking orders prior to shipment to NECC’s customers. Page §Case 1:14-cr-10363-RGS “SEALED* Document 1 Filed 12/16/14 Page 6 of 73 15, ‘The defendant CARLA R. CONIGLIARO (“CARLA CONIGLIARO”) was an individual residing in Winter Park, Florida and Dedham, Massachusetts, CARLA CONIGLIARO was the majority sharcholder of NEC, and served as a director of NECC. 16, ‘The defendant DOUGLAS A. CONIGLIARO (“DOUG CONIGLIARO”) was an individual residing in Winter Park, Florida and Dedham, Massachusetts. DOUG CONIGLIARO was the husband of CARLA CONIGLIARO, DOUG CONIGLIARO was an owner and director of MSM, and served as MSM’s President. United States Pharmacopeia 17. The United States Pharmacopeial Convention was a scientific non-profit organization that published the United States Pharmacopeia (“USP”), the official pharmacopeia of the United States. The USP set standards for the identity, strength, quality, and purity of medicines, 18, Section 9.01(3) of Title 247 of the Code of Massachusetts Regulations required all pharmacists licensed in the Commonwealth of Massachusetts to follow the standards set forth in the USP. 19, Chapter 797 of the USP (“USP-797") set forth the standards for compounding drugs identified as sterile, All compounding personnel were responsible for understanding the fundamental practices and procedures outlined in USP-797 for developing and implementing appropriate procedures, and for continually evaluating the procedures and quality of sterile drugs. 20. USP-797's standards were meant to prevent harm, including death, to patients that could result from non-sterility of drugs. Non-sterility of purportedly sterile drugs was especially dangerous to patients when the drugs would be administered into the patients’ body cavities, central nervous systems, vascular systems, eyes, and j Page 6Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 7 of 73 21, USP-797 defined high-risk compounding as, among other things, using non-sterile ingredients to create sterile drugs. High-risk compounding posed the greatest threat to patients because, among other things, it required compounding personnel to sterilize non-sterile ingredients. Use of Ingredients 22. USP-197 prohibited the use of an ingredient in drugs when the beyond use date (“BUD”), or expiration date, of the ingredient had been exceeded. USP-797 noted that careful consideration and evaluation of non-sterile ingredients was especially warranted when the drug ‘would be administered into the vascular system, central nervous system, or eyes of patients Sterilization 23. One way to sterilize drugs was through the use of an autoclave, which exposed the drugs to high pressure saturated steam. To achieve sterilization through autoclaving, USP-797 required that the drugs be exposed to steam at 121° under pressure of one atmosphere for a duration verified by testing; USP-797 defined this duration as usually 20 10 60 minutes. Autoclaving drugs at a lower temperature, a lower pressure, or for less time could result in the drugs not being sterile, USP-797 required verification of the effectiveness of the sterilization process for the quantity and type of containers of drugs through the use of a biological indicator. A biological indicator was a packaged resistant, spore-forming bacterium that provided a defined and stable resistance to a sterilization process. The sterilization process was validated when the packaged resistant, spore-forming bacterium within the biological indicator was destroyed, Given the critical importance of sterilization, the USP required that the description of steam sterilization conditions and durations for specific drugs be included in written documentation in the compounding facility Page 7Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 8 of 73 24. USP-797 mandated that all high-risk drugs prepared in groups of more than 25 individual single-dose packages or multiple-dose vials be tested for sterility consistent with the standards set forth in Chapter 71 of the USP (“USP-71"). In addition, USP-797 mandated that all high-risk drugs, regardless of the quantity, with assigned BUDs beyond 24 hours at room temperature be sterility tested. USP-71 defined sterility as the absence of the growth of microorganisms over a 14-day period. USP-71 set forth the minimum number of articles (ie., Vials, syringes, bags) from varying batch sizes that had to be sterility tested t0 meet USP requirements. 25. USP-797 allowed for the dispensing of high-risk drugs to patients prior to the receipt of sterility test results if the patient and the physician were notified of the potential risk, and an immediate recall was instituted if microbial growth was observed during the test. Any positive sterility test result should prompt a rapid and systematic investigation of aseptic technique, environmental control, and other sterility assurance controls to identify the sources of contamination and to correct problems in the methods or processes. Labeling 26. Chapter 1 of the USP (“USP-1") defined an injectable drug as a preparation intended for “parenteral administration,” meaning that the preparation was injected through the skin or other external boundary tissue, so that the active substances it contained were administered, using gravity of force, directly into a blood vessel, organ, tissue, or lesion, Drugs labeled as injectable ‘were required to be prepared scrupulously by methods designed to ensure that they met standards for sterility stated in USP-797 and USP-71 Page 8Case 1:14-cr-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 9 of 73 27. Labels on injectable drugs were required fo state the name of the preparation, the percentage content of drug or amount of drug in a specified volume, the route of administration, a statement of storage conditions, an expiration date, the name and place of bi 38 of the manufacturer, and an identifying lot number. The identifying lot number had to be capable of yielding the complete manufacturing history of the specific drug, including all manufacturing, filling, sterilizing, and labeling operations. Cleaning and Disinfecting 28. USP-797 required scrupulous attention to cleaning and disinfecting the sterile compounding areas to minimize environmental contact as a source of microbial contamination of sterile drugs. USP-797 required all cleaning and disinfecting practices and policies to be included in written standard operating procedures (“SOPs”) and to be followed by all compounding personnel. Environmental Monitoring 29. To evaluate the cleaning and disinfecting practices at a compounding facility, USP-797 required surface and air sampling of the sterile compounding areas. USP-797 identified microbial contamination from improperly cleaned and disinfected work surfaces as a major source of contamination of sterile drugs. 30, USP-797 required « compounding facility to establish “action” levels for microbial contamination, If surface or air sampling revealed contamination above an “action” level, USP-797 required a re-evaluation of the compounding facility's practices and procedures, In addition, USP-797 required an investigation into the source of the contamination, the elimination of the source, re-cleaning and re-disinfecting of the area, and re-sampling, If the surface or air sampling consistently revealed elevated levels of microbial growth, USP-797 required the Page 9Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 10 of 73 compounding facility to consult with competent microbiology personnel. If the surface or air sampling revealed highly pathogenic microorganisms that could be potentially fatal to patients receiving the purportedly sterile drugs, such as mold, USP-797 required the compounding facility to immediately remedy the issue, regardless of whether an “action” level was reached, with the assistance of a competent microbiologist, infection control professional, or industrial hygienist Personnel Training and Testing 31. USP-797 required compounding personnel to be adequately skilled, educated, Instructed, and trained to properly compound sterile drugs, To ensure proper aseptic technique, compounding personnel were required to perform media-fill testing, which was a process simulation using a microbiological growth medium instead of adrug. Media-fill testing was used to validate the aseptic techniques of compounding personnel and ensure that the processes employed would produce sterile drugs without microbial contamination. Compounding personnel were required to perform media-fill testing prior to performing any sterile ‘compounding, and semiannually thereafter. 32, USP-797 required gloved-fingertip sampling of all compounding personnel to monitor any microbial contamination on the gloved-hands of compounding personnel, USP-797 identified direct touch contamination as the most likely means of introducing microorganisms into sterile drugs. If personnel gloved-fingertip sampling revealed contamination above an “action” level, USP-797 required a review of hand hygiene and garbing procedures, glove and surface disinfection procedures, and work practices. If the personnel glovedsfingertip sampling consistently revealed elevated levels of microbial growth, USP-797 required the compounding, facility to consult with competent microbiology personnel. If the personnel gloved-fingertip sampling revealed highly pathogenic microorganisms that could be potentially fatal to patients Page 10Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 11 of 73 receiving the sterile drugs, such as mold, USP-797 required the compounding facility to immediately remedy the issue, regardless of whether an “action” level was reached, with the assistance of competent microbiologist, infection control professional, or industrial hygienist. COUNT (18 U.S.C. § 1962(c) — Racketeering) [DEFENDANTS (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, (6) CONNOLLY], 33, The allegations contained in paragraphs 1 through 8, and 17 through 32 are re-alleged and incorporated herein by reference. The Enterprise 34. NECC and MSM constituted an “enterprise” as defined by Title 18, Unit Code, Section 1961(4) (hereinafter, “the enterprise”), that is, a group of legal entities associated in fact. The enterprise constituted an ongoing organization whose members functioned as a continuing unit for a common purpose of achieving the objectives of the enterprise, which was to obtain money and property including through the means of materially false and fraudulent pretenses, representations, and promises. The enterprise was engaged in, and its activities affected, interstate and foreign commerce. Manner and Means of the Enterprise ‘MSM’s Representations to Customers 35. NECC’s primary business was high- sk compounding, that is, u 1g non-sterile ingredients to create sterile drugs. Defendant (1) CADDEN instructed the MSM sales force to falsely represent to customers that NECC was providing the highest quality compounded medications. MSM’s sales force and its marketing materials distributed to hospitals and medical facilities throughout the country falsely claimed NECC was USP-797 compliant, meaning that it Page 11Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 12 of 73 met the USP standards for compounding sterile drugs. MSM’s marketing materials also falsely claimed that NECC had a strictly enforced environmental monitoring program and a comprehensive end-product testing program for its drugs. Each quarter, MSM issued a Quality Assurance Report Card (“QA Report Card”) to NECC customers signed by defendant (1) CADDEN. ‘The QA Report Cards for the first and second quarters of 2012 falsely reported environmental monitoring results at NECC during the respective quarters, The QA Report Card for the second quarter of 2012 also falsely listed no sterility, endotoxin, or other out-of specification test results from the testing of NECC’s drugs during the time period. NBCC's Production Practices 36. NEC "s production of purportedly sterile drugs by the pharmacists and pharmacy technicians in Clean Rooms 1 and 2 failed to comply with the standards of the USP and the regulations promulgated by the MABOP in several ways, including: a. Beginning in at least 2008 and cor ing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY used, caused others to use, and approved the use of expired and expiring ingredients in the compounding of purportedly sterile drugs in violation of USP-797. To conceal the use of the expired ingredients from regulators, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY completed, caused others to complete, and approved the completion of written documentation with fictitious expiration dates. b. Beginning in at least 2009 and continuing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY used, caused others to use, and approved the use of expired or expiring stock solutions in the compounding of purportedly sterile drugs and to fill customer orders in violation of USP-797.. To Page 12Case 1:14-ct-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 13 of 73 conceal the use of the expired or expiring stock solutions from regulators, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY labeled, caused others to label, and approved the labeling of the final drugs with a new NECC lot number and BUD. c. Beginning in at least 2009 and continuing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (4) LEARY, and (5) EVANOSKY failed and caused others to fail to properly sterilize drugs in violation of USP-797. Drugs were routinely autoclaved for a period of 15 to 17 minutes in duration, less than the 20-minute duration identified in NECC’s formulation worksheets for specific drugs and USP-797. Defendants (1) CADDEN, (2) CHIN, (4) LEARY, and (5) EVANOSKY never verified and caused others to verify the effectiveness of the sterilization process through the use of a biological indicator as required by USP-797. d, Beginning in at least 2009 and continuing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY mixed, caused others to mix, and approved the mixing of stock solutions of different drug lots to fill customer orders violation of USP-797, The mixing of the lots was done to fill orders and conceal the use of an expiring older lot or the use of a newer lot that had not been tested. For stock drug products, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, and (4) LEARY falsely labeled, caused others to falsely label, and approved the false labeling of drugs sent to customers with either the newer lot number in the ease of an expiring older lot, or the older lot number in the case of an untested newer Jot. For custom drug products, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY labeled, caused others to label, and approved the labeling of drugs sent to customers with a new, third NECC lot number for the specific customer order, Page 13,Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 14 of 73 ¢, Beginning in at least 2006 and continuing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKTY, (4) LEARY, and (5) EVANOSKY failed and caused others to fail to properly test drugs for sterility in violation of USP-797. Only two samples of each batch of drugs were taken for testing regardless of the size of the batch; only one of the two samples was sent for sterility testing, Defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY also sampled, caused others to sample, and approved the sampling from batches of stock solutions, and not the filled vials, of drugs that NECC shipped to customers for patient use. £ Beginning in at least 2008 and continuing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY caused shipments to NECC customers of purportedly sterile drugs that were never tested and for which test results had not yet been received. The physicians and patients were not notified of the potential risk of using the untested drugs. In circumstances in which microbial growth was later detected in sterility tests, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY never instituted a recall, and never notified the physicians or patients to whom the drugs were sent of the adverse results, g. Beginning in or around March 2010 and continuing until in or around August 2012, defendant (6) CONNOLLY, who had voluntarily surrendered his pharmacy technician license in or around January 2009, worked as a pharmacy technician in Clean Room 2 filling cardioplegia drugs for hospital customers. Cardioplegia drugs were used for the intentional and temporary cessation of cardiac activity during cardiac surgery. Defendant (6) CONNOLLY’s unlicensed status was known to defendants (1) CADDEN, (2) CHIN, and (3) SVIRSKIY. Defendant (6) CONNOLLY was supervised by defendants (2) CHIN and (3) SVIRSKIY. Page 14Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 15 of 73, Defendant (6) CONNOLLY supervised the other pharmacy technicians in Clean Room 2, To conceal his presence from regulators, defendant (6) CONNOLLY operated the equipment in Clean Room 2 using defendant (1) CADDEN’s username and password, During his time working as a pharmacy technician at NEC, defendant (6) CONNOLLY was not administered a media-fil test to verify his aseptic technique NECC’s Cleaning and Disinfecting Practices 37. NECC’s cleaning and disinfecting practices in Clean Rooms | and 2 failed to comply with the standards of USP-797 and the regulations promulgated by the MABOP in several ways, including a. Beginning in at least 2009 and continuing until in or around October 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY failed and caused others to fail to properly clean and disinfect Clean Rooms 1 and 2 as required by USP-797. b, Defendant (2) CHIN instructed pharmacy technicians working in Clean Room 1 under his supervision to prioritize production over cleaning and disinfecting. Accordingly, cleaning and disinfecting tasks in Clean Room 1 were often either poorly completed or not completed at al ¢. Beginning in at least 2010 and continuing until in or around October 2012, defendant (2) CHIN instructed pharmacists and pharmacy technicians working in Clean Room 1 under his supervision to fraudulently complete cleaning logs at the end of the month purporting to show that NECC Clean Room 1 was properly cleaned and disinfected. 4. Beginning in at least January 2012, NECC’s surface and air sampling produced alert-level and action-level results from throughout the Clean Room I suite of rooms ~ the main Page 15Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 16 of 73 clean room, the gown room, the crimp room, and the prep room. Moreover, beginning in at least January 2012, NECC’s personnel gloved-fingertip sampling revealed the presence of microorganisms on the hands of NECC compounding personnel, including defendants (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY, while compounding and filling drugs, including within the glove boxes in Clean Room 1. From January 2012 through September 2012, NECC’s surface and air sampling and personnel gloved-fingertip sampling from the Clean Room | suite of rooms produced the following results: Surface Sampling | Microorganisms | AirSampling | Gloved-Fingertip | Week Action/Alert Action/Alert | Sampling Results 1/06/2012 Action Not tested | technician Teo | Action Bacteria ‘Action 11972012 Alen = Not tested i 1/26/2012 Action Bacteria/Mold “Action = 2102/2012 Action BacteriaMold | Not tested (5) EVANOSKY 2/08/2012 ‘Action = Alert = 2/16/2012 __ Action Bacteria/Mold | Not tested | 2232012 Action Bacteria/Mold ‘Action Oe [31012 | Action " Bacteria/Mold_| Not tested _ 3/08/2012 Action Bacteria/Mold Alert technician 3/15/2012 Action ' Bacteria/Mold | Not tested technician 3722/2012 Action = Alert | _ (3) SVIRSKIY | sr9r2012 Action Bacteria/Mold | Nottested | _@) SVIRSKIY (aso | Action “Mold “Action (5) EVANOSKY 4nz2012 Action BacteriyMold | Nottested | (@) LEARY and 1 4/20/2012 Action = _S Technician [ anen012 Action = Not tested _- 5/3/2012 Action | — Action = Page 16Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 17 of 73 [ Surface Sampling | Microorganisms | Air Sampling | Gloved-Fingertip | Week Action/Alert Listed Action/Alert | Sampling Results | sno Action Bacteria/Mold | Not tested = 5172012 | __Action = Action = 5/24/2012 Action “Bacteria/Mold | Not tested i (312012 | Action Bacteria/Mold | Action = or2012 Action Bacteria Not tested 1 technician 6/13/2012 ‘Action | _Bacteria/Mold ‘Alert 1 technician | 62172012 Action Mold Not tested 6728/2012 Action Bacteria/Mold Action 2iechnicians | vsn012 | Action Mold “Nottested | | [nano | Action Mold Action | ©PSVIRSKIV and | 7182012 Action Not tested 2 technicians : ~ (@) CHIN, 7/26/2012 Action Mold Action (5) EVANOSKY, and 1 technician ___ 82n012 Action Bacteria/Mold | Not tested 1 technicians [sno Action Bacteria Action 2 technicians 8/16/2012 Action = Not tested (4) LEARY | 3012 Action Mold Action technician 8/30/2012 Action = Nottested | (5) EVANOSKY 96/2012 Action i Action ] 9/13/2012 Action Bucteria/Mold | Not tested “technician [9202012 | Action BacteriwMold | Action | €. Defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY were notified of action-level sampling hits from the Clean Room 1 rooms. £ Despite the action-level sampling hits recorded in thirty-seven out of thirty-eight weeks in 2012, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY did not conduct a re-evaluation of their practices and procedures as required Page 17Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 18 of 73 by USP-797. Defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY did not conduct an investigation into the source of the contamination as required by USP-797, Defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY did not consult with a competent microbiologist, infection control professional, or industrial hygienist regarding the mold consistently found in the Clean Room | rooms during 2012 as required by USP-797. ‘The Racketeering Violation 38. From in at least 2006 and continuing until in or around October 2012, within the District of Massachusetts and elsewhere, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, and (6) CONNOLLY, along with others known and unknown to the Grand Jury, being persons employed by and associated with the enterprise described above, which enterprise was engaged in and the activities of which affected interstate commerce, did knowingly and unlawfully conduct and participate, directly and indirectly, in the conduct of the affairs of that enterprise, through the pattern of racketeering activity set forth below in paragraphs 39 through 71 ‘The Pattern of Racketeering Activity 39. The pattern of racketeering activity as defined in Title 18, United States Code, Section 1961(1) and 1961(5), consisted of the following acts: Racketeering Acts 1 through 52: Methylprednisolone Acetate 40. The defendants named below committed the below-described Racketeering Acts: Page 18Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 19 of 73 Racketeering Acts | through 27; Mail Fraud ‘The Scheme 41. From in or around May 2012 to in or around October 2012, in the District of “Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN devised and intended to devise a scheme and artifice to defraud NECC’s customers and the patients of those customers and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promis 42, The purpose of the scheme and artifice to defraud was to enrich defendants (1) CADDEN and (2) CHIN and NECC, by selling for a profit to NECC’s customers and the patients of those customers, preservative-free methylprednisolone acetate 80 mg/ml, a steroid labeled as injectable, which was made in a manner that did not mect the standards set forth in the USP and, therefore, could not be labeled and sold as a sterile drug, The 05212012 8 Lot 43. It was part of the scheme and artifice to defraud that on or about May 21, 2012, defendant (2) CHIN, acting under the direction of defendant (1) CADDEN, compounded a 12.5 liter stock lot of preservative-free methylprednisolone acetate 80 mg/ml with lot number 05212012@68 (the “05212012@68 lot") in Clean Room 1. Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, attempted to sterilize the 05212012@68 lot in the autoclave for 15 minutes and 4 seconds, rather than 20 minutes as stated in the written formula instructions and USP-797, Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, did not verify the sterilization process used for the 05212012@68 lot through the use ofa biological indicator as required by USP-797, Page 19Case 1:14-cr-10363-RGS *SEALED* Document Filed 12/16/14 Page 20 of 73 44, It was further part of the scheme and artifice to defraud that defendant (2) CHIN filled two 5 milliliter vials from the batch of the 05212012@68 lot to be sent to an independent laboratory for testing. On’or about June 5, 2012, based on a single 5 milliliter vial, the independent laboratory issued a report indicating the 05212012@68 lot was sterile. It was further part of the scheme and artifice to defraud that defendant (2) CHIN directed pharmacy technicians to fill and supervised pharmacy technicians in filling viels with the 05212012@68 lot on repeated occasions to fulfill NECC’s customer orders. Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, did not conduct any sterility testing of the filled vials of the 05212012@68 lot, which NEC shipped to customers for patient use. 45. Itwas further part of the scheme and artifice to defraud that defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, directed pharmacy technicians and other NECC personnel to label the vials filled with the 05212012@68 lot as injectable. During the time that the 05212012@68 lot was compounded and filled, NECC recorded action-level environmental sampling results every week in the Clean Room 1 rooms but did not take any action to remediate the issues as required by USP-797. 46. It was further part of the scheme and artifice to defraud that defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, directed that filled vials of the 05212012@68 lot be sent out of Clean Room 1 for shipment by private and commercial interstate carrier to NECC’s customers for use on the patients of those customers. From on or about June 8, 2012, through on or about July 27, 2012, approximately 6,500 vials labeled as the 05212012@68 lot were sent to NECC’s customers throughout the country. Page 20Case 1:14-cr-10363-RGS *SEALED* Document Filed 12/16/14 Page 21 of 73 ‘The 06292012@26 Lot 47, It was part of the scheme and artifice to defraud that on or about June 29, 2012, defendant (2) CHIN, acting under the direction of defendant (1) CADDEN, compounded a 12.5 liter stock lot of preservative-fiee methylprednisolone acetate 80 mg/ml with lot number 06292012@26 (the “06292012@26 lot"). Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, attempted to sterilize the 06292012@26 lot in the autoclave for 15 minutes and $ seconds, rather than 20 minutes as stated in the written formula instructions and USP-797, Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, did not verify the sterilization process used for the 06292012@26 lot through the use of a biological indicator as, required by USP-797. 48. It was further part of the scheme and artifice to defraud that defendant (2) CHIN filled two 5 milliliter vials from the stock of the 06292012@26 lot to be sent to an independent laboratory for sterility testing. On or about July 17, 2012, based on a single $ milliliter vial, the independent laboratory issued a report indicating the 06292012@26 lot was sterile. It was further part of the scheme and artifice to defraud that defendant (2) CHIN directed pharmacy technicians to fill and supervised pharmacy technicians in filling vials with the 06292012@26 lot on repeated occasions to fulfill NECC’s customer orders. Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, did not conduct sterility testing of the filled vials of the 06292012@26 lot, which NEC shipped to customers for patient use, 49. It was further part of the scheme and artifice to defraud that defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, ditected pharmacy technicians and other C personnel to label the vials filled with the 06292012@26 lot as injectable. During the time that the 06292012@26 lot was compounded and filled, NECC recorded action-level environmental Page 21Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 22 of 73 sampling results every week in the Clean Room | rooms but did not take any action to remediate the issues as required by USP-797. 50. It was further part of the scheme and artifice to defraud that defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, directed that filled vials of the 06292012@26 lot be sent out of Clean Room I for shipment by private and commercial interstate carrier to NEC's customers for use on the patients of those customers. From on or about July 16, 2012, through on. or about August 27, 2012, approximately 6,200 vials labeled as the 06292012@26 lot were sent to NECC’s customers throughout the country. ‘The 08102012@51 Lot 51. It was part of the scheme and artifice to defraud that on or about August 10, 2012, defendant (2) CHIN, acting under the direction of defendant (1) CADDEN, compounded a 12.5 liter stock lot of preservative-free methylprednisolone acetate 80 mg/ml with lot number 08102012@51 (the “08102012@51 lot”). Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, attempted to sterilize the 08102012@S1 lot in the autoclave for 15 minutes and 4 seconds, rather than 20 minutes as stated in the written formula instructions and USP-797. Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, did not verify the sterilization process used for the 08102012@51 lot through the use of a biological indicator as required by USP-797. 52. It was further part of the scheme and artifice to defraud that defendant (2) CHIN filled two 5 milliliter vials from the stock of the 08102012@S1 lot to be sent to an independent laboratory for sterility testing. On or about August 28, 2012, based on a single 5 milliliter vial, the independent laboratory issued a report indicating the 08102012@S1 lot was sterile. It was further part of the scheme and artifice to defraud that defendant (2) CHIN directed pharmacy Page 22Case 1:14-cr-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 23 of 73 technicians to fill and supervised pharmacy technicians in filling vials with the 08102012@S1 lot ‘on repeated occasions to fulfill NECC’s customer orders. Defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, did not conduct sterility testing of the filled vials of the 08102012@51 lot, wt NECC shipped to customers for patient use, 53. Itwas further part of the scheme and artifice to defraud that defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, directed pharmacy technicians and other NECC personnel to label the vials filled with the 08102012@S1 lot as injectable. During the time that the 08102012@51 lot was compounded and filled, NECC recorded action-level environmental sampling hits every week in the Clean Room I rooms but did not take any action to remediate the issues as required by USP-797, 54. It was further part of the scheme and artifice to defraud that defendant (2) CHIN, with the knowledge of defendant (1) CADDEN, directed that filled vials of the 08102012@T lot be sent out of Clean Room 1 for shipment by private and commercial interstate carrier to NECC’s customers for use on the patients of those customers. From on or about August 17, 2012, through on or about September 25, 2012, approximately 4,600 vials labeled as the 08102012@51 lot were sent to NECC’s customers throughout the country. The Mailings 55. On or about the dates listed below, defendants (1) CADDEN and (2) CHIN, having devised and intending to devise a scheme and artifice to defraud and to ob’ money and property by means of materially false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice and attempting to do so, deposited and caused to be deposited matters and things - to wit, vials of the 05212012@68, 06292012@26, and Page 23Case 1:14-cr-10363-RGS *“SEALED* Document1 Filed 12/16/14 Page 24 of 73 08102012@SI lots, each labeled as injectable —to be sent and delivered by private and commercial interstate carrier to NECC’s customers and the patients of those customers as specified below: Racketeering Act Date Description Destination Michigan Pain Specialists, 1 8/8/2012 | 400 5 ml vials of 06292012@26 Brighton, Michigan 2 77/2012 | 100 1 ml vials of 06292012@26 Specialty Surgery Center, 3 8/14/2012 | 120 1 ml vials of 06292012@26 Crossville, Tennessee 4 6/27/2012 | 500 1 ml vials of 05212012@68 : 5 7252012 | $00 1 ml vials of 06292012@26 ee 6 8/13/2012 | $00 | ml vials of 06292012@26 Na fie “Tennesses 7 9/4/2012 | $00 1 ml vials of 08102012@51 ee ee 8 6/25/2012 | 125 1 ml vials of 05212012@68 me 9 7/16/2012 125 1 ml vials of 05212012@68. OSMC Outpatient 10 8/2/2012 | 150 1 ml vials of 06292012@26 Surgery Center, nT 8/28/2012 | 1301 ml vials of 08102012@51 Elkhart, Indiana 2 9/17/2012 | 1001 ml vials of 08102012@51 13 8/15/2012 | 1001 ml vials of 06292012@26 South Bend Clinic, 4 9125/2012 | 100 1 ml vials of 08102012@51 South Bend, Indiana 15 75/2012 | 1501 ml vials of 05212012@68 | Marion Pain Management, 16 8/15/2012 | 150 1 ml vials of 06292012@26 Ocala, Florida 7 8/13/2012 | 85 5 ml vials of 06292012@26 Box Hill Surgery Center, 18 9/25/2012 | 300 1 ml vials of 08102012@S1 ‘Abingdon, Maryland 19 79/2012 | 200 1 ml vials of 05212012@68 20 7/26/2012 | 200 1 ml vials of 06292012@26 Insight Imaging, 21 8/17/2012 | 200 1 ml vials of 06292012@26 Roanoke, Virginia 2 9/7/2012 | 200 1 ml vials of 08102012@51 2B 6725/2012 | 201 ml vials of 05212012@68 py] 7/13/2012 | 201 ml vials of 05212012@68 | High Point Surgery Center, 28 8/7/2012 | 401 ml vials of 06292012@26 High Point, North Carolina 26 8/14/2012 | 80 1 ml vials of 06292012@26 n 9/20/2012 | 601 ml vials of 08102012@51 All in violation of Title 18, United States Code, Section 1341 Page 24Case 1:14-c-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 25 of 73 Racketeering Acts 28 through 35: Second Degree Murder ~ Michigan 56. On or about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN, acting in wanton and willful disregard of the likelihood that the natural tendency of their actions would cause death or great bodily harm, caused the deaths of the individuals listed below, that is, the individuals died as a result of receiving injections of the 06292012@26 lot of methylprednisolone acetate made and sold by NEC: Racketeering | Date of Date of Act Injection Individual Location of Injection Death 28 8/16/2012 | Karina Baxter Brighton, Michigan 9723/2012 2» | 87202012 | Paula Brent Brighton, Michigan — | 11/17/2012 30 8/29/2012 | Gayle Gipson Brighton, Michigan | 1026/2012 | [ou 8/21/2012 | Donna Kruzich Brighton, Michigan 10/8/2012 | 2 9/6/2012) Lym Laperriere Brighton, Michigan | 101772012 | 8/16/2012 Mary Pletth Brighton, Michigan 11572012 uM 91182012 | Sally Roe Brighton, Michigan | 10/18/2012 | 35 9/10/2012 Emma Todd Brighton, Michigan 37222013, All in violation of Chapter 750, Michigan Compiled Laws, Section 317 and Chapter 767, Michigan Compiled Laws, Section 39. Racketeering Acts 36 through 42: Second Degree Murder — Tennessee 57. On or about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN knowingly, that is, acting with an awareness that their conduct was reasonably certain to cause death, and unlawfully killed the individuals listed below, that is, the individuals died as a result of receiving injections of the 05212012@68, 06292012@26, and 08102012@I lots of methylprednisolone acetate made and sold by NEC Page 25Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 26 of 73 Racketeering | Date of Date of Act | Injection(s) |__Individual Location of Injection Death 36 8/31/2012 | Marie Hester Nashville, Tennessee | 11/1/2012 2772012 | 37 8/17/2012 | Eddie Lovelace | Nashville, Tennessee | 9/17/2012 8/31/2012 8292012 | . sville. , 38 Seemig | Donald MeDavid | Crossville, Tennessee | 11/4/2012 | 8/21/2012 39 9/4/2012 | Diana Reed Nashville, Tennessee | 10/3/2012 9118/2012 40 7730/2012 | ‘Thomas Rybinski | Nashville, Tennessee | 9/29/2012 41 9/17/2012 | Carol Wetton Nashville, Tennessee | 4/16/2013 | 2 8/23/2012 | Earline Williams | Nashville, Tennessee | 10/15/2012 Alll in violation of Title 39, Tennessee Code, Sections 13-210, 11-302, and 11-402. Racketeering Acts 43 through 45: Second Degree Murder — Indi na 58. On or about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN, knowingly, that is, acting with an awareness of a high probability that their conduct would result in death, killed the individuals listed below, that is, the individuals died as a result of receiving injections of the 05212012@68, 06292012@26, and 08102012@51 lots of methylprednisolone acetate made and sold by NECC, and defendants (1) CADDEN and (2) CHIN have committed other murders: Racketeering | Date of Date of Act Injection(s) |__Individual Location of Injection Death 8722/2012 ‘ | 8 97772012. | Pauline Burema Elkhart, Indiana 10/10/2012 | 4 9/14/2012 | Kathy Dillon Elkhart, Indiana 1usn012 | ee | Page 26Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 27 of 73 Racketeering | Date of | a Date of Act | Injection(s) | __ Individual Location of Injection | Death | 45 | iio | Alice Machowiak | South Bend, Indiana | 12/10/2012 Allin violation of Title 35, Indiana Code, Sections 42-I-1, 41-2-2, 50-2-9, and 41-2-4 Racketeering Acts 46 through 48:_Second Degree Murder — Maryland 59. On or about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN created a very high degree of risk to the lives of the individuals listed below, and, conscious of such risk, acted with extreme disregard of the life-endangering consequences, thereby causing the deaths of the individuals listed below, that is, the individuals died asa result of receiving injections of the 06292012@26 and 08102012@51 lots of methylprednisolone acetate made and sold by NECC: Racketeering | _ Date of | Date ot — Act | Injeetion(s) |__Individual Location of Injection Death 46 9/5/2012 | Bahman Kashi Abingdon, Maryland | 1/28/2013 | 8312012 | Brenda Rozek Abingdon, Maryland | 9/16/2012 7202012 |p . : 48 dowaoiz | Bana Young Abingdon, Maryland] 12/31/2012 All in violation of Title 2, Maryland Code, Section 204 and Title 4, Maryland Code, Section 204, Racketeering Acts 49 through 50:_Second Degree Murder — Virginia 60. On o about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN willfully and purposefully embarked upon a course of wrongful conduct likely to cause death and great bodily harm, and unlawfully killed the individuals listed below, that is, the individuals died as a result of receiving injections of the Page 27Case 1:14-cr-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 28 of 73 05212012@68, 06292012@26, and 08102012@51 lots of methylprednisolone acetate made and sold by NECC: Racketeering | Date of 7 - | Dateor | | Act | Injection(s) | __ Individual Location of Injection | Death | r t t , 8 aaa Kathy Sinclair Roanoke, Virginia 1/19/2013 | | 50 9162012 | Douglas Wingate | Roanoke, Virginia | 9182012 | All in violation of Title 18.2, Virginia Code, Sections 32 and 18. Racketeering Act 51: Second Degree Murder ‘lorida 61. On or about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN, acting imminently dangerous to another and demonstrating a depraved mind without regard for human life, unlawfully killed the individual listed below, that is, the individual died as a result of receiving an injection of the 06292012@26 lot of methylprednisolone acetate made and sold by NECC: Racketeering | Date of ] Dateof | Act | Injection Individual Location of Injection Death | si 9/6/2012 | Godwin Mitchell Ocala, Florida 3/18/2013 All in violation of Florida Code, Sections 782.04(2) and 777.011. Racketeering Act $2:_Second Degree Murder — North Carolina 62. On or about the dates listed below, in the District of Massachusetts and elsewhere, defendants (1) CADDEN and (2) CHIN, acting in a manner inherently dangerous to human life so recklessly and wantonly as to manifest a mind utterly without regard for human life and social duty and deliberately bent on mischief, unlawfully killed the individual listed below, that is, the Page 28Case 1:14-cr-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 29 of 73 individual died as a result of receiving an injection of the 06292012@26 lot of methylprednisolone acetate made and sold by NEC: [Racketeering | Date of Date of Act Injection | Individual Location of Injection Death 52 8/28/2012 | lwina Shaw | High Point, North Carolina | 10/19/2012 Allin iolation of North Carolina General Statutes Sections 14-17(b) and 14-5.2. Racketeering Acts 53-63: Shipments of Untested Lots 63, The defendants named below committed the below-described Racketeering Acts: Racketeering Acts $3-63:_Mail Fraud ‘The Scheme 64. From in or around July 2012 through October 2012, in the District of Massachusetts, and elsewhere, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, and (5) EVANOSKY devised and intended to devise a scheme and artifice to defraud NECC’s customers and the patients of those customers, and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, in that NECC shipped to its customers throughout the country drugs identified as sterile and containing certain ingredients prior to receiving the results of testing confirming the sterility and quality of the drugs, NEC failed to inform its customers that independent sterility testing had not yet been completed at the time of the shipments, In instances in which the independent laboratory issued non-sterile or otherwise out-o specification results, NECC failed to notify the customers of the results, institute a recall, and conduct an investigation into the source of the results as required by USP-797. Page 29Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 30 of 73 The Mailings . On or about the dates listed below, the defendants listed below, having devised and intending to devise a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice and attempting to do so, deposited and caused to be deposited ‘matters and things — to wit, untested drugs identified as sterile and containing certain ingredients ~ to be sent and delivered by private and commercial interstate carrier to NECC’s customers to be used on the patients of those customers as set forth below: Racketeering Date of Testing act Defendants _| Shipment | Des Destination Result | = Good Shepherd | 8 CY CADDEN, |} apqaq12_ | 150 bacitracin Hospital, Not sterile @Q)CHIN 20 mi syringes | : Barrington, Illinois | | 18 (1) CADDEN, polymyxins | Glens Falls Hospital, be Gysvirskty | 872012 | “pacitracin | Glens Falls, New York | Not sterile itrigation bags | an | (1) CADDEN, polymyxin- | Glens Falls Hospital, | 4 ser co (LEARY | 8272012] “sacitracin | Glens Falls, New York | Notsterle 20 (1) CADDEN, polymyxin- | Winchester Hospital, ‘ 56 | (sy evANOSKY | 878012 | “Lacitracin | Winchester, Virginia | Notsterile | jon bags I ie 20 | (1) CADDEN, polymyxin- Winchester Hospital, fot sterile | ; 37 (syEVANOSKY | 830012 | yacitracin | Winchester, Virginia | Not ster irrigation bags | 100 potassium (1) CADDEN, Port Huron Hospital, ; 58 Semnn’ | 9102012 | chloride | per wm wtehigan | Notsterle |_ injectables Page 30| Racketeering Case 1:14-cr-10363-RGS *“SEALED* Document Filed 12/16/14 Page 31 of 73 Date of Testing Act | __Defendants__| Shipment | Description Destination Result | oo Brigham and Women’s ()CADDEN, | 9, cardioplegia ; oo | s9 rr Hospital, Not sterile Boston, Massachusetts | (low-k) | 7 Sentara Norfolk General ow sean | 9272012 | Sperm Hospital, Not sterile | Bs Norfolk, Virginia : eee 1 300 lidocaine- | ; ; Massachusetts Bye and | 6 COyiteamy! | 2232012 | pupivecsing, Ear Institut, oe vyaleron Boston, Massachusetts | Potent | injections 50.55 ml Oakleaf Surgical o OO TRARY 8/21/2012 | pericapsular Hospital, era, injections | Eau Claire, Wisconsin | ©P™°P! | 15 (1) CADDEN, clindamycin. | Florida Hospital me 63 (4)LEARY, | 9/17/2012. gentami Waterman, ae (5) EVANOSKY | polymyxin Tavares, Florida | POM me | Allin violation of Title 18, United States Code, Section 1341. Racketeering Acts 64-68: Shipments of Expired Drugs 66. The defendants named below committed the below-described Racketeering Acts Racketeering Acts 64-68: Mail Fraud The Scheme 67. From in or around January 2008 through July 2012, in the District of Massachusetts and elsewhere, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, and (4) LEARY devised and intended to devise a scheme and artifice to defraud NECC’s customers and the patients of those customers and to obtain money and property by means of materially false and fraudulent Page 31Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 32 of 73 pretenses, representations, and promises, in that they made drugs using an ingredient that had expired on or about January 23, 2007, in violation of USP-797. To mask the use of the expired ingredient, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, and (4) LEARY completed, caused others to complete, and approved the completion of written documentation with fictitious expiration dates. Defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, and (4) LEARY caused the drugs to be shipped to NECC’s customers throughout the country without notifying them of the use of the expired ingredient, The drugs were labeled with fictitious BUDs indicating expiration dates three to six months after the date the drugs were made. The Mailings 68. On or about the dates listed below, the defendants listed below, having devised and intending to devise a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice and attempting to do so, deposited and caused to be deposited matters and things ~ to wit, drugs made with an expired ingredient in violation of USP-797 —-to be sent and delivered by private and commercial interstate carrier to NECC’s customers to be used on the patients of those customers as set forth below: Date of |__Defendants | Shipment | Description | Destination | | 625 mg/ml ee (1) CADDEN, USC University Hospital, 64 772011. | methotrexate eens | @svinskiy irjectebes Los Angeles, California | . 84 mg/ml (1) CADDEN, || Augusta Bye Associates, 6s Coveany, | 782011 | methotrexate Teaenile, viginie | |__injectabies i Page 32Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 33 of 73 Racketeering | Date of ‘Act Defendants | Shipment | Description Destination a 625 mg/ml Aj 66 SGN | 10312011 | methotrexate | oumpore Medial Group _ mall injectatles outhboro, Massachusetts | a 25 25 mg/ml | fe (DEADDEN, | 15919 | Grethomeate | Decatur Memorial Hospital, | (2) CHIN pete Decatur, Illinois i } a Fa | (CADE! 104 mg/ml 5 68 | S@cHIN,” | ois2012 —methotenste | Retina Group of Wasingion, (4) LEARY |__ injectables revy Chase, Marylane All in violation of Title 18, United States Code, Section 1341. Racketeering Acts 69-78: Unlicensed Pharmacy Technician 69, The defendants named below committed the below-described Racketeering Acts: Racketeering Acts 69-78: Mail Fraud The Scheme 70. From in or around March 2010 to in or around August 2012, in the District of Massachusetts and elsewhere, the defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, and (6) CONNOLLY devised and intended to devise a scheme and artifice to defraud NECC’s customers and the patients of those customers and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, in that NECC represented to its customers that it complied with Massachusetts pharmacy regulati s even though defendant (6) CONNOLLY, who had voluntarily surrendered his pharmacy technician license in or about January 2009, worked as a pharmacy technician in Clean Room 2 filling cardioplegia orders for hospital customers in violation of Massachusetts law, To conceal his presence from regulators, Page 33Case 1:14-cr-10363-RGS “SEALED* Document 1 Filed 12/16/14 Page 34 of 73 defendant (6) CONNOLLY operated the equipment in Clean Room 2 using defendant (1) CADDI 's usemame and password. The Mailings TI. On or about the dates listed below, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, and (6) CONNOLLY, having devised and intending to devise a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice and attempting to do so, deposited and caused to be deposited matters and things — to wit, drugs made by an unlicensed pharmacy technician - to be sent and delivered by private and commercial interstate carrier to NECC’s customers to be used on the patients of those customers as set forth below: [ Racketeering Date of | ‘Act Defendants | Shipment | __Deseription Destination (1) CADDEN, 7 i [ cy) @) CHIN, | sasraoio | — 7cardioplegia ene | (3) SVIRSKIY, solution bags ae | (SCOMNOLEY jem, Virginia | r —- — 4 | vOicuINte 10 cardioplegia (cold | Osceola Regional 0 csvinsxiy, | 1212010! induction high K) Medical Center, ae bags Kissimmee, Floride | KS | | aad | | ()CADDEN, | | 2) CHIN, 10-cardioplegia | Baptist Medical Center, WJ 3) svirskty, | 12212010 cotution bags Jacksonville, Florida | | | © CONNOLLY | | Page 34Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 35 of 73 Racketeering Date of | Act Defendants | Shipment | Description Destination | /-@cappen, | fos QCHIN, | | srsyp911 | Seardioplegia | Noch Shore Medical (3) SVIRSKTY, solution bags pee (CONNOLLY | Massachusetts | (1) CADDEN, (2) CHIN, | 20 cardioplegia (high | Sunrise Medical Center, | 73) @ysvirskry, | 2929! | ig) sotution bags Las Vegas, Nevada | (6) CONNOLLY (1) CADDEN, lOcardioplegia |g, . (2) CHIN, St. Vincent's Hospital, ™ Gsvirskiy, 11/152011 Gaduetion formals) | Birmingham, Alabama (6) CONNOLLY | ()CADDEN, | | (2) CHIN, 20 cardioplegia (high } Sunrise Medical Center, fe cysvirskty, | 2222012 |“) solution bags Las Vegas, Nevada (6) CONNOLLY | (1) CADDEN, (Q) CHIN, | 30 cardioplegia (cold St. Peter's Hospital, 7 3) svirsKiy, | 942012 |“ induction) bags ‘Albany, New York (6) CONNOLLY | (1) CADDEN, . soplesia | West Virginia University, (2) CHIN, 25 cardioplegia ” cxsvinsniy, | 712A012 | 7s saoneet Morganton, West (6) CONNOLLY | ein (1) CADDEN, (2) CHIN, 20 cardioplegia (high | Sunrise Medical Center, 7% svirsKiy, | 8%70!2 | “'x) solution bags Las Vegas, Nevada (6) CONNOLLY Allin violation of Title 18, United States Code, Section 1341. All of the above done in violation of Title 18, United States Code, Section 1962(c). Page 35,Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 36 of 73 COUNT 2 (18 US.C. § 1962(¢) ‘Racketeering Conspiracy) [DEFENDANTS (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, (6) CONNOLLY, (7) CARTER, (8) STEPANETS] 72, The allegations contained in paragraphs 1 through 10, 17 through 32, and 34 through 37 are re-alleged and incorporated herein by reference, 73. Beginning in at least 2006 and continuing until in or around October 2012, within the District of Massachusetts and elsewhere, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, (6) CONNOLLY, (7) CARTER, and (8) STEPANETS, along with others known and unknown to the Grand Jury, being persons employed by and associated with the enterprise described above, which enterprise was engaged in and the activities of which affected interstate commerce, unlawfully and knowingly conspired to violate Title 18, United States Code, Section 1962(c), that is, 1o conduct and participate, directly and indirectly, in the conduct of the affairs of that enterprise through a pattern of racketeering activity, as that term is defined by Title 18, United States Code, Sections 1961(1) and (5), consisting of multiple acts indictable under Title 18, United States Code, Section 1341 (mail fraud), Manner and Means of the Conspiracy 74, It was part of the conspiracy that defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, and (6) CONNOLLY defrauded NECC’s customers and the patients of those customers, by selling for a profit: purportedly sterile drugs that were ‘made and tested in a manner that did not meet the standards set forth in USP-797 and USP-71; untested drugs identified as sterile and containing certain ingredients that were made in violation of USP-797 and tested in violation of USP-71; drugs made with an expired ingredient in violation of USP-797; and drugs made by an unlicensed pharmacy technician in violation of Massachusetts Page 36,Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 37 of 73, Jaw, It was further part of the conspiracy that defendants (7) CARTER and (8) STEPANETS knowingly confirmed and authorized shipments of orders to be sent to NECC customers of drugs that were improperly tested, drugs for which test results had not yet been received, drugs that were not tested at all, and drugs that were made with an expired ingredient. 75, It was further part of the conspiracy that defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, (6) CONNOLLY, (7) CARTER, and (8) STEPANETS cach agreed that a conspirator would commit at least two acts of racketeering in the Alll done in violation of Title 18, United States Code, Section 1962(4), (OUNT 3 (18 U.S.C. § 371 - Conspiracy to Defraud the United States) {DEFENDANTS (1) CADDEN, (7) CARTER, (8) STEPANETS, (9) GREG CONIGLIARO, (10) RONZIO} 76. ‘The allegations contained in paragraphs | through 3, and 9 through 12 are re-alleged and incorporated herein by reference. 77. From in or around 1998, the exact date being unknown to the Grand Jury, through in or around October 2012, within the Distriet of Massachusetts and elsewhere, defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, (9) GREG CONIGLIARO, and (10) RONZIO, knowingly and willfully conspired and agreed together and with each other, and with other persons known and unknown to the Grand Jury, to defraud the United States of and concerning its governmental functions and rights, hereinafter described, that is, of and conceming its right to have its business and its affairs, and particularly the transaction of the official business of the Food and Drug Administration (“FDA”), conducted honestly and impartially, free from corruption, fraud, improper and undue influence, dishonesty, unlawful impairment, and obstruction, Page 37Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 38 of 73 Manner and Means of the Conspiracy 78. It was part of the conspiracy that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, (9) GREG CONIGLIARG, and (10) RONZIO would, by deceit, eral, trickery, and dishonest means, defraud the United States by interfering with and obstructing the lawful governmental functions of the FDA, in that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, (9) GREG CONIGLIARO, and (10) RONZIO purported to be operating NECC as a state-regulated pharmacy, dispensing drugs pursuant to valid, patient-specific prescriptions as required by Massachusetts law, rather than as a drug manufacturer distributing drugs in bulk to customers without prescriptions and thereby subject to heightened regulatory oversight by the FDA. 79. It was further part of the conspiracy that defendants (1) CADDEN and (9) GREG CONIGLIARO falsely represented to the FDA and the MABOP that NECC, as a pharmacy, dispensed drugs only upon receipt of valid, patient-specific prescriptions as required by Massachusetts law. Furthermore, defendants (1) CADDEN and (9) GREG CONIGLIARO. falsely represented that NECC was a compounding pharmacy and not a manufacturer, and therefore defendants (1) CADDEN and (9) GREG CONIGLIARO claimed NECC was not subject to FDA oversight. 80. It was further part of the conspiracy that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, and (10) RONZIO instructed the MSM sales force to inform customers they needed to provide names of patients for orders of drugs, 81. It was further part of the conspiracy that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, and (10) RONZIO instructed the MSM sales force to inform customers that Page 38Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 39 of 73 NECC would not include the patients’ names on the labels affixed to the drugs, thereby allowing the facilities to use the drugs for any patient. 82. It was further part of the conspiracy that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, and (10) RONZIO used and caused others to use the names of patients supplied by ‘NECC’s customers to create fraudulent prescriptions for drugs. 83. It was further part of the conspiracy that defendants (1) CADDEN, (7) CARTER, and (8) STEPANETS reused and caused others to reuse the names of patients from the same order or previous orders supplied by NECC’s customers to create fraudulent prescriptions for drugs. 84, It was further part of the conspiracy that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, and (10) RONZIO shipped and caused others to ship drugs to NECC’s customers. ‘without any patient names, and then used and caused others to use the names of patients received after the drug shipments to create fraudulent prescriptions for those or subsequent orders. 85. It was further part of the conspiracy that defendants (1) CADDEN, (7) CARTER, and (8) STEPANETS used and caused others to use the names of celebrities, fictional characters, doctors, and medical staff to create fraudulent prescriptions for drugs. 86, It was further part of the conspiracy that defendant (1) CADDEN waived the need for patient names for customers’ first orders, that defendants (1) CADDEN, (7) CARTER, and (10) RONZIO waived the need for patient names for subsequent orders for certain other customers, and that defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, and (10) RONZIO used and caused others to use the name of the hospital or medical facility as the patient name to create fraudulent prescriptions. 87, It was further part of the conspiracy that defendants (1) CADDEN and (7) CARTER created ratios of fraudulent prescriptions to number of drug units sold for NECC’s various drugs, Page 39Case 1:14-ct-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 40 of 73 and defendants (1) CADDEN, (7) CARTER, and (10) RONZIO instructed NECC staff and the MSM sales force on the ratios of how many patient names would be needed for each order size. Overt Acts 88. In furtherance of the conspiracy and to effect the objects of the conspiracy, defendants (1) CADDEN, (7) CARTER, (8) STEPANETS, (9) GREG CONIGLIARO, and (10) RONZIO committed the following overt acts, among others, in the District of Massachusetts and elsewhere: Representations 10 Regulators 89, Onor about May 20, 2003, in response to an FDA inspection of NECC, defendant (1) CADDEN wrote to the FDA, “we are not subject to (nor are we voluntarily subjecting ourselves to) current good manufacturing practices (CGMPs) as promulgated by the FDA, since we are a compounding pharmacy, not a manufacturer.” 90. On or about October 1, 2004, in response to an FDA inspection of NEC, defendant (9) GREG CONGILIARO falsely wrote to the FDA, NECC “compounds numerous different sterile and non-sterile preparations to fill patient-specific, physician prescriptions.” Defendant (9) GREG CONGILIARO further falsely noted, “[w]e always compound only the amount we anticipate will be required based on our prescribing physician’s historical prescribing pattems.” Defendant (9) GREG CONGILIARO concluded by stating, “we are a small-scale, family-run, ‘compounding-only pharmacy, not a manufacturer, As such we are not subject to GMP.” 91. On orabout January 5, 2007, in response to an FDA Waming Letter issued to NEC, defendant (1) CADDEN falsely wrote to the FDA, “NEC dispenses compounded medications upon the receipt of valid prescriptions. We are engaged in the practice of pharmacy and comply ‘with the Massachusetts Board of Registration in Pharmacy’s laws and rules.” With respect to an Page 40Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 41 of 73 allegation that NECC had informed its customers to provide names of staff members instead of patients, defendant (1) CADDEN falsely wrote, “(tJhis allegation contradicts all of our standard operating procedures.” NECC's Fraudulent Practices 92. On orabout September 15, 2010, defendant (1) CADDEN sent an e-mail to defendant (10) RONZIO in response to a complaint from a potential customer about supplying patient names with a drug order. In the e-mail, defendant (1) CADDEN wrote: Unfortunately we are a ‘pharmacy’...how can you get medication from a pharmacy without a prescription which must contain a patient name. We must connect the patients to the dosage forms at some point in the process to prove that we are not a MFG, They can follow up each month with a roster of actual patients and we can back-fill. If we just sell drugs we are a MFG. We can label with office name but process patients in our data base [sic] 93, On or about October 13, 2010, in response to an NECC customer's request to use the word “generic” on a drug label, defendant (8) STEPANETS wrote to the MSM sales representative: [Defendant (1) CADDEN] and I looked over the label...the reason is the word GENERIC is on there...this is a big red flag for manufacturing. Since we are not a manufacturer, I cannot put that on the label. We ate getting into “misbranding” and all sorts of things. So, to avoid any potential issues, we can say something like “compounded for...” 94, On or about May 2, 2011, defendant (7) CARTER sent defendant (1) CADDEN an e-mail stating that an NECC customer was providing the names of staff members for its orders, In response, defendant (1) CADDEN wrote, “I will speak to rep. ‘There are better ways to do this. ‘Same names all the time makes no sense.” 95, On or about August 9, 201 1, an MSM sales representative sent an e-mail to defendant (1) CADDEN stating, “[clurremt customer since 05° [sic] ordering $7,200 a month in Page 41Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 42 of 73 methylprednisolone, They refuse to provide names and have not since they began ordering with us...Is it ok to process without names?” Defendant (1) CADDEN replied, “Yes...OK.” 96. On or about September 23, 2011, defendant (7) CARTER sent an e-mail to an MSM ales representative to inform him that a customer did not provide patient names for the order, but that “[w]e processed it using old pt names.” 97. Onor about February 23, 2012, defendant (1) CADDEN sent an e-mail to defendants (7) CARTER and (10) RONZIO regarding the processing of orders for hospitals. In the e-mail, defendant (1) CADDEN wrote that a hospital “[glives patient names with orders but may be patients from ‘last month,” We now process and label the bags [of drugs] with these names...We now want to pack as ‘Bulk’ + label with facility name label while still processing patient names into data base [sic].” 98. Onorabout March 13, 2012, defendant (8) STEPANETS sent an e-mail to defendant (1) CADDEN in which she wrote, “I know that [specific NECC customers] are exempted from patient names for now. Can you please send a list of [specific NECC customers} to all confirming, staff, please.” 99. On orabout March 20, 2012, defendant (8) STEPANETS sent an e-mail to an MSM sales representative in which she wrote about a specific NECC customer, “facility uses bogus patient names that are just ridiculous!” The sales representative replied, “{tJhese are RIDICULOUS.” Defendant (8) STEPANETS responded that the order was sent out anyway. 100. On or about May 21, 2012, defendant (1) CADDEN sent an e-mail to defendant (7) CARTER with the subject line “RX processing,” Defendant (7) CARTER amended the e-mail and forwarded it to all NECC order-processing staff, The e-mail was printed out and hung in the Page 42Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 43 of 73 cubicles of NECC order-processing staff, In the e-mail, defendants (1) CADDEN and (7) CARTER wrote: ‘The MAX total number of units (vials, syringes, etc..) per patient must make sense, I must be able to logically explain to a regulator why we processed x# of units per patient. We must process only complete names......not (K, Smith) A facility can't continuously provide the same roster of names. ...unless they are truly treating the exact same patients over and over again! All names must resemble “real” name names! (Mickey Mouse. 10m! multi-dose vials, must be (1:)......one vial per patient Sml, 2ml, Im! (pf) single dose vials. (MP40-pf, TA4O-pf....ete)...can be processed as (5:1 of 3:1). Many patients come back over and over again for a series of injections over many weeks/few months. Can process multiple meds for same patient on a single order.example: facility orders omnipaque + betamethasone SP (pf)......can process 3-5 of each for single patient = series of injection: Can process 3-5 Avastin syringes per patient name = this is chronic treatment, patients are injected every month or so, If you have any questions then ask. ‘The 3 per prescription must be logical..... per patient does NOT make sense! LET gel....3:1 ‘Combo drops, Im... ‘Combo drops 3mi+1 Avastin 5:1 (pf) steroids Iml, 2m, Sml....5:1 Omnifisov....5:.. fs Hydroxyp[rogesterone injections Ondansetron/Metoclopramide/Ketorolac/Prochlorperazine! Nalbuhine — 10 units/pt +... obviously false -off20 LET gel sic] Iml...can 20:1. long time series of 101, On or about August 24, 2012, defendant (10) RONZIO forwarded part of the above e-mail from defendants (1) CADDEN and (7) CARTER to the MSM sales force with the subject line “HUUUUUUUUUUUUUUGE IMPORTANCE!!! THEI HINtIttHHt At the bottom of the e-mail, defendant (10) RONZIO wrote: Page 43Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 44 of 73 DO NOT GIVE RATIOS!! unt! IT'S THE WRONG THING TO SAY PERIODI!!I!!!!' [ CANNOT STRESS THIS ENOUGH TO ALL OF YOU!!!!!!_ ITS [sic] WILL BE A FATAL. ERROR FOR YOU!!!!!!!_ 1 KNOW I DON'T HAVE TO SAY THIS BUT ALSO NEVER PUT ANYTHING IN WRITING... .OTHER KEY WORDS NEVER TO SAY ARE BACKFILL.......OR ANYTHING ALONG THOSE LINES. ....!!!! NECC's Fraudulent Prescriptions 102. In furtherance of the conspiracy and to effect the objects of the conspiracy, defendants (1) CADDEN, (7) CARTER, and (8) STEPANETS committed and caused to be committed the following additional acts, among others, in the District of Massachusetts and elsewhere: Overt | Date of — | Deseription Fake Patient Names Listed | Act | Shipment | ‘°CAHOR | eserip' | on NECC Prescriptions 10 vials of \ betamethasone repository San Marcos, (pf) 6 mg/ml, Big Baby Jesus, Weslie Willis, eee areas S vials of 10 ml | Method Man methylprednisolone | acetate 40 mg/ml i { ok | eeeaee John Meier, Lisa Kudro, David Lincoln, story | SPades Ryan Reynolds, |B }11/23/2009 |) Nebraska eaGice IpPsHOrY | Matthew Perry, Tyler Perry, | | (Pf 6 mg/ml Roy Rogers | | Michael Baldwin, Alex | ies 60 vials of| Baldwin, Steven Baldwin, | 1221/2009 | SINE | betamethasone repository | Billy Baldwin, Diana Ross, ‘ebraska (pf) 6 mg/ml Michael Jackson, Daily Niner, Chris Rock | | Fast Man, Wonder Woman, | rot. | 60 vials of Fat Albert, Wayne Newton, | p_ | 2ngoi0 Netra ri betamethasone repository | Cyndi Lopler, John Candie, { {Nebraska (pf) 6 mg/ml Pewe Herman, Josh Grovan, | l L Nelly Fertado Page 44Case 1:14-cr-10363-RGS *SEALED* Overt | Date of | Document 1 Filed 12/16/14 Page 45 of 73 Fake Patient Names Listed [Act | Shipment | /eeation Deseription | on NECC Prescriptions fans 60 vials of Robert Redford, William lg 4/22/2010 Nebraska | betamethasone repository | Dafoo, Lucy Lue, Freddy 7 (pf) 6 mg/ml ] Mercury, Martha Stewart | John Pfizer, Gerry Schlitz, Pat | An Blue, Bud Weiser, Richard ; Lincoln, story | C00 Michael Keystone, F | srv2010 | ebasta | beumetione nen | Aas roster Samuel Ads, bf) 6 mg/ml John Killian, Raymond | Rollingrock | : San Marcos, 8 vials of 10 ml | eee Texas triamcinolone 40 mg/ml | Hugh Jass | 10 vials of — dexamethasone, | siazoi0 | Sen Marcos, S vialsof 10m | Freddie Mae, Fannie Mac methylprednisolone | acetate 40 mg/ml | | | Fast Phil, Parma Reigns, | . Hindsight Man, Peggy 1 | tineroi0| Lincoln, betamethasone repository eens Jom SiS a Nebraska es Surfer, Ned Flanders, Ted} | PI ‘Nuget, Bob Barker, Burt | | Reynolds | | 10 vials of | betamethasone repository (pf) 6 mg/ml, San Marcos, 10 vials of Betty Ford, Jimmy Carter, Bill SE eee Texas methylprednisolone | Clinton | acetate 40 mg/ml, | 10 vials of triamcinolone 40 mg/ml | i 20 vials of t betamethasone repository | | | (pf) 6 mg/m|, moi, | SanMarcos, 5 vials of Donald Trump, Calvin Klein, K | 58011 Texas methylprednisolone | Jennifer Lopez | acetate 40 mg/ml, 5 vials of tiameinolone | | 40 mg/ml _| Page 45,Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 46 of 73 [Overt | Dateot | y cation | Deveription _| Fake Patient Names Listed ‘Act | Shipment { ‘i ‘on NECC Prescriptions { | John Stewart, Craig Killbome, | | oe 60 vials of David Letterman, Jay Leno, L | sao ‘incoln, | betamethasone repository | Jimmy Kimmel, Al Bundie, | ‘Nebraska (pf) 6 mg/ml Johnny Knoxville, Dick Van Dike ] Vials of triamcinolone | Mike Myers, Bella Swan, ee a cesta C Sa ee | William Tweedy, Stefan Georgia | 5 ssa eye drops. | Salvatore Sookie Stackhouse, | } 60 combo #4 eye drops. | Ruby Falls \ | i Dale Eamhardt, Johnny | | ie 60 vials of Johnson, Jerry Jone, Jimmy | 2/7/2012 ' | betamethasone repository | Stewart, Mark MeGirath, ‘Nebraska os | (pf) 6 mg/ml Bobby Lebonny, Tom | I I | Brokohy, Chris Rock | ae Flash Gordon, Long John, ; Lincoln, stom | TORY Tiger, Chester Cheeto, © | 387012 | Nebraska | temetmsone ZePPst™ | stuart Lite, John Song, Bil | Ransic, Tom Landry naan LLL. Bean, Filet O'fish, Rug Elkhart, itary | Dovtor, Squeaky Wheel, P| 307012 | indiana | Pemetinne TeEPsHO™ | Dingo Boney, Coco Pu, | e Harry Potter 60 vials of | _Lineoin, Mary Lamb, Ginger Rogers, Q | 4972012 | Nebraska acne cme Mike Marker, Carrol Sharpie 103. In furtherance of the conspiracy and to effect the objects of the conspiracy, defendants (1) CADDEN and (9) GREG CONIGLIARO committed and caused to be committed the following additional acts, among others, in the District of Massachusetts and elsewhere: 104, On or about May 14, 2012, the MABOP began an investigation of NECC after learning that a sub-potent eye block was compounded by NECC and dispensed to a Massachusetts hospital for use on patients. ‘The eye block, which was an anesthetic used in eye surgeries, failed Page 46Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 47 of 73 to properly anesthetize the patients’ eyes, causing them to experience pain during surgery. As part of the investigation, the MABOP requested from NECC, among other things, copies of the prescriptions for the dispensed eye block. 105. On or about May 31, 2012, defendant (1) CADDEN wrote an e-mail to defendant (9) GREG CONIGLIARO informing him that the eye block was dispensed in February 2012 without any prescriptions. Defendant (9) GREG CONIGLIARO responded, “call [the Massachusetts hospital] and ask nonchalantly for a patient roster for the 170 syringes and ask where all the rest of the syringes are.” Defendant (1) CADDEN replied, “I will try but unless she is dumb she will smell a skunk...” 106. On or about June 4, 2012, defendant (1) CADDEN e-mailed defendant (9) GREG. CONIGLIARO a prescription template and a list of identified surgical patients of the Massachusetts hospital who underwent surgical procedures during a one-week period in February 2012, 107, On or about June 4, 2012, defendant (9) GREG CONIGLIARO instructed his staff to create 300 fraudulent prescriptions for the surgical patients of the Massachusetts hospital identified by defendant (1) CADDEN. 108. On or about June 14, 2012, defendant (1) CADDEN submitted NECC’s response to the MABOP, in which defendant (1) CADDEN wrote that he was including in an attachment “[t]hree hundred (300) patient-specific transcribed prescriptions #1320237 - #1320536 which are retained per [NECC’s standard operating procedure].”. The attachment contained the 300 fraudulent prescriptions made upon instructions by defendants (9) GREG CONIGLIARO and (1) CADDEN. All done in violation of Title 18, United States Code, Section 371, Page 47Case 1:14-ct-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 48 of 73, OUNTS 4 - 56 .C. § 1341 (8 US Fraud) {DEFENDANTS (1) CADDEN, (2) CHIN, (3) SVIRSKLY, (4) LEARY, (5) EVANOSKY, (6) CONNOLLY] 109. The allegations contained in paragraphs 1 through 8, and 17 through 32 are re-alleged and incorporated herein by reference, ‘The Scheme to Defraud 110. Beginning in at least 2006 and continuing until in or around October 2012, within the District of Massachusetts and elsewhere, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKAIY, (4) LEARY, (5) EVANOSKY, and (6) CONNOLLY, along with others known and unknown to the Grand Jury, devised and intended to devise a scheme and artifice to defraud NECC’s customers and the patients of those customers and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises. ‘The Purpose of the Scheme 111, The purpose of the scheme and artifice to defraud was to enrich NECC and defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, and (6) CONNOLLY, by selling to NECC’s customers and the patients of those customers for a profit: purportedly sterile drugs that were made and tested in a manner that did not meet the standards set forth in USP-797 and USP-71; untested drugs identified as sterile and containing certain ingredients that were made in violation of USP-797 and tested in violation of USP-71; drugs made with an expired ingredient in violation of USP-797; and drugs made by an unlicensed pharmacy technician in violation of Massachusetts law Page 48Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 49 of 73 Manner and Means 112. The manner and means whereby the scheme and artifice to defraud was to be accomplished are set forth in paragraphs 35 through 37, which are re-alleged and incorporated herein by reference. ‘The Mailings 113, On or about the dates listed below, the defendants listed below, having devised and intending to devise a scheme and artifice to defraud and to obtain money and property by means of materially false and fraudulent pretenses, representations, and promises, for the purpose of executing such scheme and artifice and attempting to do so, deposited and caused to be deposited ‘matters and things ~ to wit, drugs ~ to be sent and delivered by private and commercial interstate carrier to NECC’s customers to be used on the patients of those customers as set forth below: y [ Date of | | Count | Defendants Shipment | Description Destination — = T . Michigan Pain | a | aca 8/8/2012 | 4005 ml vials of 06292012@26 | Specialists, Brighton, | | tery 5 () CaDDEN, | 7/17/2012. | 1001 mi vials ofo6292012@26 | Gece, Surety 6 | @ CHIN 8/14/2012 | 120 1 ml vials of 06292012@26 aes _ 7 = : - ~ 7 | 6/27/2012 | 500 1 ml vials of 05212012068 : , 8 | ()CADDEN, | 7/25/2012 | 500 1 mi vials of 06292012@26 ae 9 | @)CHIN 8/13/2012 | $00 1 ml vials of 06292012@26 | Siaiie ——— 10 9/4/2012 | 5001 ml vials of 08102012@51 | N#ShYN' n 6/25/2012. | 125.1 ml vials of 0521201268 2 ycappen, | 7162012 | 1251 mi vials of05212012@68 | OSMC Outpatient | 3 CADMNN | 8/2/2012 | 1501 mi vials of06292012@26 | Surgery Center, | 4 @ 8/28/2012 | 130 1 ml vials of 08102012@31 | Elkhart, Indiana | 15 [91172012 | 1001 mi vias ofo8102012@51 | Page 49Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 50 of 73, Date of — |. Shipment Destination 16 | Q)CADDEN, | 8/15/2012 | 100 1 ml vials of 06292012@26 | South Bend Clinic, 7 9/25/2012 | 1001 ml vials of 08102012@51 | South Bend, Indiana 18 7/5/2012 | 150 1 ml vials of 05212012@68 pes v 811572012 | 1501 mi vials of 0629201226 | Gmaeeen, 20 8/13/2012 | 85 5 ml vials of 06292012@26 | BOS Hil Surgery 21 972572012 | 3001 mi vals of 09102012051 | .inador Moryland {| { Aa | | 2 71972012 | 200 1 ml vials of 05212012@68 | 23 77262012 | 200 1 ml vials of 06292012@26 | Insight Imagine, 24 8/17/2012 | 200 1 ml vials of 06292012@26 | Roanoke, Virginia | | 25 9/7/2012 | 200 1 ml vials of 08102012@51 | 26 6/25/2012 sof os2i2012@68 | High Point | 27 7113/2012 sof 05212012@68 |g Neh Point | 28 8/7/2012 Js of 06292012@26 | eo North 29 8/14/2012 | 80 1 mi vials of 06292012@26 eee 30 9/20/2012 | 60 1 ml vials of 08102012@51 | Good Shepherd 31 7/24/2012 | 150 bacitracin 20 ml syringes Hospital, L ington, Iinois ie ce [ Glens Falls Hospital, | a bacitracin irrigation bags | Glens Falls, New York Glens Falls Hospital, | [3 eee bacitracin irrigation bags | Glens Falls, New York | Winchester Hospital, 34 yevanosky 8282012 bacitracin irrigation bags Winchester, Virginia Winchester Hospital, | 35 | sy EvaNosky | 802012 bacitracin irrigation bags Winchester, Virginia | | 36 Port Huron Hospital, 9/11/2012 | 100 potassium chloride injectables Port Huron, MichiganCase 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 51 of 73 [ PT Date ot | | Count | Defendants | Shipment Deseription Destination Brigham and | Gy) CADDEN, ke a7 | ivanosny | 9242012. | S0cantioplegia solution (low-k) | | Women’s Hospital | | Boston, Massachusetts Sentara Norfolk 38 | (CADDEN, | 9727/2012 | 60 potassium chloride bags General Hospital, (@) CHIN feared | | Norfolk, Virginia — 300 lidocaine Massachusetts Eye and 39 Oy TEARY | 2023/2012 bupivacaine- Ear Institute | hyaluronidase injections _| Boston, Massachusetts | Oakleaf Surgical | a MatEAnr 8/21/2012 | 5055 ml pericapsular injections Hospital| | | | Eau Claire, Wisconsin - = — + (1) CADDEN, 15 elindamycin- Florida Hospital a1 | @ueary, | 9172012 gentamicin- ‘Waterman, | (5) EVANOSKY polymyxin bags Tavares, Plorida | | USC University (1) CADDEN, 625 mg/ml methotrexate Hospital, 2 | @svirskiy | 770!) injectables Los Angeles, | | California _ __ — | ) | | Augusta Bye — | fas | OAGar” | 78/2011 ne Associates, | I | : Fisherville, Virginia | a } “ \ Southboro Medical (1) CADDEN, 6 25 mg/ml methotrexate Group, | “4 @cmn | | 193172011 injectables Southboro, | Massachusetts | | - — : (1) CADDEN, 25 25 mg/ml methotrexate Pe || 45 penn | 2israor2 ee Hospital, @ i Decatur, Hingis Retina Group of | () CADDEN, 10.4 mg/ml methotrexate ‘Washington, | 46 2) CHIN, 6/8/2012 . injectables, Chevy Chase, | | @LEARY | Marya iL = Page 51Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 52 of 73 |" Date of | Count | Defendants | Shipment Description | OTC ; Lewis-Gale Medical 47 | eygvansxiy, | 3252010 | Teardioptegia solution bags Center, (OCONNOILA, Salem, Virginia (1) CADDEN , ayaa Osceola Regional A @CHIN,” | iooi2010 | 10 cardioplegia (cold indueson | Gonerie Rggtonsl | (3) SVIRSKIY, high K) bags Cee | (CONNOLLY issimmee, Florida 1) CADDEN, UCR ; : | Baptist Medical 49 | evunsxiy, | 12212010 | 10cardioplegia solution bags | Center, Jacksonville, (© CONNOLLY | ae (1) CADDEN, can) ; ; North Shore 50 | gi hunsniy, | 302011 | Scardioplegia solution bags Medical Center, | 1 CONNOTLA Salem, Massachusetts TT ay eapen, | a 7 a (2) CHIN, Gn9n011 | 20 cardioplegia (high K) solution Saya (3) SVIRSKIY, bags ray ee ada (6) CONNOLLY | ae | aycappen, | _ QCHIN, | | srsys011 | 1Ocardioplegia (induction | St. Vincent's Hospital, | @) SVIRSKIY, formula) bags Birmingham, Alabama (6) CONNOLLY | | (1) CADDEN, ye | 53 (2) CHIN, ananory | 20cardioplegia (high K) solution | Sunsise Medical @)SVIRSKIY, bags oe (6) CONNOLLY | eee (1) CADDEN, @) CHIN, 30 cardioplegia (cold induction) | St. Peter's Hospital, | 4 | ysvinskiy, | 47012 bags ‘Albany, New York | (6) CONNOLLY Page 52Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 53 of 73 [ es er Count | Defendants | Shipment Deseription Destination eas aloes (1) CADDEN, West Virginia (2) CHIN, TET , University, $5 | a Qvineniy, | 77122012 | 25candioplegia solution bags | pauronn vest (6) CONNOLLY | Virginia (1) CADDEN, | = (2) CHIN, gis2012 | 20 cardioplegia (high K) solution Sunrise Medical (3) SVIRSKIY, : bags a re | (6) CONNOLLY | Allin violation of Title 18, United States Code, Section 1341. COUNTS 57-99 (21 U.S.C. §§ 351(a)(2\(A), 331(@), and 333(a)(2) — Introduction of Adulterated Drugs into Interstate Commerce with Intent to Defraud and Mislead — Insanitary Conditions) [DEFENDANTS (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY] 114, The allegations contained in paragraphs 1 through 7, 17 through 32, and 37 are re-alleged and incorporated herein by reference. 115, From in or around May 2012 through in or around October 2012, within the District of Massachusetts and elsewhere, the defendants listed below, with the intent to defraud and mislead, caused to be introduced and delivered for introduction into interstate commerce the drugs set forth below contrary to the provisions of Title 21, United States Code, Section 351(a)(2)(A), in that the defendants listed below prepared, packed, and held the drugs under insanitary conditions whereby they may have been contaminated with filth and whereby they may have been rendered injurious to health, and the act resulted in the drugs being adulterated, each such instance being a separate count in the Indictment: Page 53Case 1:14-ct-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 54 of 73 [ | Date of - | Count | Defendants _| Shipment | Description Destination ~hiuan Pain Speuhan | (1)CADDEN, | vi Michigan Pain Specialists, | 87 Wenn’ | 8/8/2012 | 400 5 ml vials of oo2s201226 | Misien Ma inet ss | (yCADDEN, | 7717/2012 | 1001 mi vials of 06292012@26 | Specialty Surgery Center, 39 Q)CHIN | 8/14/2012 | 120 1 ml vials of 06292012@26 | Crossville, Tennessee — Sryarsreioorioal 60 6727/2012 | $00 1 ml vials of 05212012@68 | . 61 (1) CADDEN, | 7/25/2012 | 500 1 mi vials of 0629201226 eyes a @) CHIN | | 8/13/2012 } 500 1 mi vials of 06292012@26 : z 8 | 9/4/2012 | 5001 mi vials of 08102012@51 | Nashville, Tennessee 1 ______| | 64 | 6/25/2012 | 125 1 ml vials of 05212012@68 6 | aycappen,. | 7/19/2012 | 1251 mt vials of 05212012@68 | __ OSMC Outpatient 66 penny’ | 82/2012 | 150 1 ml vals of 062920120026 | Surgery Center, 67 ¢ 8/28/2012 | 1301 ml viels of 08102012@s1 | Elkhart, Indiana | 68 9/17/2012 | 100 1 ml vials of 08102012@51 | _ oe ee - 69 | @ycappen, | 8715/2012 | 100 1 mi vials oF 06292012@26 | South Bend Clinic, | | @)CHIN "| 9725/2012 | 1001 mi vials of 08102012@51 | South Bend, Indiana t ——- 7 | qycapp 71512012. | 150 1 ml vials of 05212012@68 | Marion Pain Management, n (2) CHIN "| 8/15/2012 | 150 1 ml vials of 06292012@26 Ocala, Florida | 9/13/2012 | 85 5 ml vials of 06292012@26 | Box Hill Surgery Center, | 73 | qycapp) "4 @) CHIN | | 9/25/2012 , 3001 m! vials of 08102012@51 | Abingdon, Maryland | 79/2012. | 2001 ml | 76 | ()CADDEN, | 7/26/2012 | 2001 mi Insight Imaging, 1 (2) CHIN | | 8/17/2012 | 200 1 ml vials of 06292012@26 | Roanoke, Virginia | 7% 9/7/2012 | 200 1 ml vials of 08102012@S1 |v ——|—— a ees ” 6/25/2012 | 201 ml vials of 05212012@68 . 80 pcappen, | 7/132012 | 201 mi vials of 0521201268 eee 81 OAD RN | 8/7/2012 | 401 mi vals of 0629201226 a 82 @ 8/14/2012 | 80 1 ml vials of 06292012@26 Pe case 8 | 97202012 | 60 1 ml vials of 08102012@51 : mm - — ‘ospital, | } () CADDEN, ; Good Shepherd Hospital, CHIN \ 7124/2012 | 150 bacitracin 20 ml syringes | Saniuon ines | | 85 (1) CADDEN, | 8/7/2012 18 polymyxin- Glens Falls Hospital, @svirskiy , © } bacitracin irrigation bags | Glens Falls, New York Page 54Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 55 of 73 / Date of | 7 ] Count | Defendants _ | Shipment Description ____ Destination mr { f go | MCADDEN, | gonp012 18 polymyxin- Glens Falls Hospital, _| (4) LEARY " bacitracin irrigation bags Glens Falls, New York 87 (1) CADDEN, ——— 20 polymyxin- | Winchester Hospital, 1 | | @) EVANOSKY bacitracin irrigation bags Winchester, Virginia — 1 (1) CADDEN, 20 polymyxin- Winchester Hospital, | 88 | (6) EVANOSKY | 8/30/2012 | bacitracin irrigation bags i I ere |e | | @cappen, | 100 potassium chloride Port Huron Hospital, + - cnn | | 9112012 | injectables Port Huron, Michigan | Sentara Norfolk General 90 (CADDEN, | 9/97/2012 | 60 potassium chloride bags Hospital, (@) CHIN - iL Norfolk, Virginia | Allin violation of Title 21, United States Code, Sections 351(a)(2)(A), 331(a), and 333(a)(2), and Title 18, United States Code, Section 2. COUNTS 91~94 (21 U.S.C. §§ 352(a), 331(a), and 333(a)(2) — Introduction of Misbranded Drugs into Interstate Commerce with the Intent to Defraud and Mislead — False and Misleading Labeling) [DEFENDANTS (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY| 116, The allegations contained in paragraphs 1 through 6, 17 through 32, and 36 are re-alleged and incorporated herein by reference, 117, From in or around July 2011 through in or around June 2012, within the District of Massachusetts and elsewhere, the defendants listed below, with the intent to defraud and mislead, caused to be introduced and delivered for introduction into interstate commerce the drugs set forth below whose labeling was false and misleading in any particular, contrary to the provisions of Title 21, United States Code, Section 352(a), each such instance being a separate count in the Indictment: Page $8Case 1:14-cr-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 56 of 73 ] Date of : | Count | Defendants | Shipment Description Destination ()CADDEN, | gyq9911 | 625 mg/ml methotrexate | USC University Hospital, 1 | @svIRSKIY injectables Los Angeles, California’ | DDEN, | | 92 | (CADDEN, | ag), | 84 mgiml methotrexate | Augusta Eye Associates, (4) LEARY injectables Fisherville, Virginia | | } Decatur Memorial | 93 oa CHINE aasioi2 » 2525 Ute netions Hospital, | | ny 8 Decatur, Illinois is t (1) CADDEN, aes Retina Group of | 94 (2) CHIN, eanoiz | 104 mpm! metho kad Washington, ( LEARY ‘i | Chevy Chase, Maryland Allin violation of Title 21, United States Code, Sections 352(a), 331(a), and 333(a)(2), and le 18, United States Code, Section 2, COUNTS 95 ~ 109 (21 U.S.C. §§ 353(b)(1), 331(a), and 333(a)(2) - Introduction of Misbranded Drugs into Interstate Commerce with the Intent to Defraud and Mislead ~ No Prescriptions) [DEFENDANTS (1) CADDEN, (8) STEPANETS, (11) KATHY CHIN, (12) THOMAS] 118, ye allegations contained in paragraphs 1 through 3, 10, and 13 through 14 are re-alleged and incorporated herein by reference. 119, From in or around December 2009 through in or around March 2012, within the District of Massachusetts and elsewhere, the defendants listed below, along with others known and unknown to the Grand Jury, with the intent to defraud and mislead, caused to be dispensed the drugs set forth below contrary to the provisions of Title 21, United States Code, Section 353(b)(1), in that the defendants listed below caused the drugs to be introduced and delivered into interstate commerce without the valid prescription of a practitioner licensed by law to administer the drugs, Page 56Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 57 of 73 and the act resulted in the drugs being misbranded, each such instance being a separate count in the Indictment: | mae Fake Patient Names Count | Defendant(s) ie ort, Location Description Listed on NECC | Shipment oe 7 Prescriptions [ Michael Baldwin, Alex oe 60 vials of | Baldwin, Steven Baldwin, 95 | ()CADDEN | 12/21/2009 KUO | betamethasone | Billy Baldwin, Diana | repository _| Ross, Michael Jackson, | i Daily Niner, Chris Rock | Fast Man, Wonder | | Govialsor | Woman, Fat Albert, ] . ' Lincoln, : . | Wayne Newton, Cyndi 96 | (8) STEPANETS 2182010 | Nebraska | PEAMEHBONE || Coe, John Candie, Pewe j | ae Herman, Josh Grovan, | Nelly Fertado j os 60 vials of | Robert Redford, William | 97 | @)STEPANETS | 4/22/2010 | \ciretl | betamethasone | Dafoo, Lucy Lue, Freddy | L | a repository _| Mercury, Martha Stewart John Pfizer, Gerry Schlitz, | Pat Blue, Bud Weiser, on 60 vials of | Richard Coors, Michael } 98 | (8)STEPANETS | 6/11/2010 * | betamethasone | Keystone, Adam Foster, Nebraska z repository | Samuel Adams, John | | Killian, Raymond | | L Rollingrock San | | 8 vials of 10m | 99 | Q)CADDEN | 8/26/2010 | Marcos, | “ue clone | Hugh Jass Texas 10 vials of San dexamethasone, 100 | 971472010 | Marcos, | 5 vials of 10 ml | Freddie Mae, Fannie Mac | Texas” | methylprednisolone | acetate Page $7Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 58 of 73 T Fake Patient Names | Count | Defendant(s) —Dateof | Location |Description Listed on NECC Shipment nN | | - Prescriptions ‘ast Phil, Parma Reigns, j Hindsight Man, Peggy | : 60 vials of } Linco!n, Octavius, John No, Silver 101) @)STEPANETS | 117162010 | Xereska | Petemethasone |S er Ned Flanders, Ted | | ee ‘Nuget, Bob Barker, Burt I I | Reynolds | toviatsor — | betamethasone | | , repository, an 5 eal 1Ovials of | Betty Ford, Jimmy Carter, 102 | @)STEPANETS | 12302010 | Marcos, | snyiprednisolone | Bll Clinton } | a acetate, | | 10 vials of { triamcinolone | T |. 20vials of | betamethasone s repository, an . ; 5 vials of Donald Trump, Calvin 103) (8) STEPANETS | 5/3/2011 ao methylprednisolone | Klein, Jennifer Lopez ‘exas acetate, | 5 vials of |__ triamcinolone | | John Stewart, Craig Govielsof | Killbome, David (1) KATHY Lincoln, Letterman, Jay Leno, i) CHIN S220 | Nebraska | Detamethesone | Simmy Kimmel, Al repository Bundie, Johnny Knoxville, | | | Dick Van Dike I | | 20 vials of Mike Myers, Bella Swan, | (11) KATHY Jonesboro, | triamcinolone, | William Tweedy, Stefan 105 CHIN 82922011 |” Georgia) 60 combo #4 eye | Salvatore, Sookie | drops Stackhouse, Ruby Falls ~ | | | Dale Eamhardt, Johnny Johnson, Jerry Jone, 60 vials of 2 (11) KATHY | Lincoln, . Jimmy Stewart, Mark ae ‘CHIN 2TROI2 | Nebraska | Petamelhasone | NGrath, Bobby repository Lebonny, Tom Brokohy, l l | Chris Rock 4 Page 58Case 1:14-cr-10363-RGS *SEALED* Document1 Filed 12/16/14 Page 59 of 73, [ al | Fake Patient Names Count | Defendant(s) ; | Location | Description Listed on NECC | Shipment ited nN es rescriptions | q| | Flash Gordon, Long John, | : 60 vials of | Tony Tiger, Chester | 07 | OAM | aywr20i2 | AEOM. | betamethasone | Cheeto, Stuart Little, John ‘CHIN Nebraska 4 : | repository | Strong, Bill Ransie, Tor | __} Landry | L2vials of | EL: Bean, Filet "fish, (8) STEPANETS, | . 40, Elkhart, Rug Doctor, Squeaky 108 Na2) THOMAS | 39012 | Indiana Creed Wheel, Dingo Boney, | ‘pository Coco Puff, Harry Potter l — 60 vials of | Mary Lamb, Ginger 109 | 2)THOMAS | 4/9/2012 | | betamethasone | Rogers, Mike Marker, Nebraska : : L | repository _| Carrol Sharpie All in violation of Title 21, United States Code, Sections 353(b)(1), 331(a), and 333(a)(2), and Title 18, United States Code, Section 2 COUNTS 110 127 (18 U.S.C. § 4013) Criminal Contempt) (DEFENDANTS (13) CARLA CONIGLIARO, (14) DOUG CONIGLIAROJ 120, incorporated herein by reference. 121 ‘The allegations contained in paragraphs 15 through 16 are re-alleged and From in or around February 2013 through in or around March 2013, within the District of Massachusetts and elsewhere, defendants (13) CARLA CONIGLIARO, the majority shareholder of NEC, and (14) DOUG CONIGLIARO, did willfully and knowingly disobey and resist lawful orders of a Court of the Ui d States, that is, the temporary restraining order (Document 22) and preliminary injunctive relief order (Document 51) issued by the Honorable Henry J. Boroff on January 28, 2013, and February 12, 2013, respectively, in the United States Bankruptcy Court for the District of Massachusetts in the case, In re: New England Compounding Pharmacy, Ine., Case Nos, 12-19882-HJB, 13-01040-HIB (adversary action), by transferring Page 59Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 60 of 73 approximately $33.3 million of assets of defendant (13) CARLA CONIGLIARO as listed below, cach such transfer being a separate count in the Indictment: | | Ori i iginating ; | Receiving [ count | PetTspe of | amount | “Account, | Retiving Acommtl |) Tseeciat Account Number eee Opening Date | 2013 Merrill Lynch USAA Financial Advisors 110 Wire Transfer ‘$3,300,000 | New York, New York San Antonio, Texas 1731/2013 No, ***="0872 No. ****5428 2/4/2013 Merrill Lynch USAA Financial Advisors i Wire Transfer $7,000,000 | New York, New York San Antonio, Texas =| 1/31/2013 | No. ****0872 No. ####5428 2/4/2013 Merrill Lynch: SunTrust Bank 12 Wire Transfer $6,500,000 | New York, New York Atlanta, Georgia 12/31/2012 No. #50872 No, teeereeee9g72 | Florida Bank 113 $500,000 Atlanta, Georgia 4 2/5/2013 Check No, serrre###3822 Orlando, Florida No. ***6704 2/5/2013 ‘SunTrust Bank BankFirst 14 ‘Check $500,000 Atlanta, Georgia Winter Park, Florida 25/2013 ec No, #481908 7827_ No. *###*0369 2/5/2013, ‘SunTrust Bank | PNC Bank 115 Check $500,000 Atlanta, Georgia Pittsburgh, Pennsylvania 2/5/2013 | No. teet#ee#982 | No. ##94.6896. | 2/5/2013. ‘SunTrust Bank CNL Bank 16 ‘Chee oe $500,000 Atlanta, Georgia Orlando, Florida 2/5/2013 ‘l No, *#######2897 No. ***0113 | Ben SunTrust Bank Regions Bank 17 Check $500,000 Atlanta, Georgia Birmingham, Alabama 2/5/2013 No, ###¥##49°9872 No. #7446303 AND ‘SunTrust Bank Susquehanna Bank | 118 ‘Check $250,000 Atlanta, Georgia Pennsylvania 2/21/2013 vec No, *########9899_ No, *9*****9388 2/21/2013 ‘SunTrust Bank Susquehanna Bank Wy Check - $250,000 Atlanta, Georgia Lititz, Pennsylvania 2/21/2013 ee No. **89"###92822 No. #4499388 | Z Page 60Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 61 of 73 Originating aaa Count | WaterTyPE oF | Amount Account Receiving Sccount/ Account | Account Number ccount Number | Opening Date aaa Merrill Lynch Seacoast National Bank | 120 Check | 83:000,000 | New York, New York | Vero Beach, Florida | 3/18/2013 No. *##-#0872 No. *#**##8506 121 ' $1,000,000 | Atlanta, Georgia Orlando, Florid 2/5/2013 No. t##484#949892 lando, Florida | | No. *##6704 37182013 SunTrust Bank BankFirst wz} ie | $1,000,000 | Atlanta, Georgia Winter Park, Florida 2/5/2013 No. *######4#2822 | _No. *####0369 | ansno1s SunTrust Bank PNC Bank 123 | Ye. | $1,000,000 | Atlanta, Georgia | Pittsburgh, Pennsylvania | 2/5/2013 No. *##8094082827 | No. #4446896 Aran | SunTrust Bank CNL Bank 124 ie $1,000,000 | —_Atianta, Georgia Orlando, Florida 2/5/2013 No. #44944#99822 No. **40113, a ‘SunTrust Bank Regions Bank 125 ra $1,000,000 | Atlanta, Georgia | Birmingham, Alabama 2/5/2013, ine No. t##08#049902 No. ##°*6303 oe SunTrust Bank Susquehanna Bank 126 ie $500,000 | Atlanta, Georgia Lititz, Pennsylvania 2/21/2013 ire No. *###99884989 | No. 127 a $5,000,000 isors Atlanta, Georgia 12/31/2012 Wire San Antonio, Texas Yo, #Haa HHH No. *# 2822 No. *###5428 Allin violation of Title 18, United States Code, Sections 401(3) and 2. COUNT 128 (18 U.S.C. § 371 - Conspiracy to Commit Structuring) [DEFENDANTS (13) CARLA CONIGLIARO, (14) DOUG CONIGLIARO] 122. The allegations contained in paragraphs 15 through 16 are re-alleged and incorporated herein by reference. Page 61Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 62 of 73 123, From in or around September 2010 through in or around March 2014, within the District of Massachusetts and elsewhere, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO, knowingly, willfully, and for the purposes of evading the reporting requirements of Section 5313(a) of Title 31, United States Code, and the regulations promulgated thereunder, conspired and agreed together and with each other, and with other persons unknown to the Grand Jury, to structure and assist in structuring transactions with domestic financial institutions, that is, Middlesex Savings Bank, SunTrust Bank, and TD Bank respectively, and to cause and attempt to cause such institutions to fail to file Currency Transaction Reports required by Section 5313 for currency transactions in excess of $10,000. Manner and Means of the Conspiracy 124, It was part of the conspiracy that defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO obtained sums of cash in excess of $10,000 from bank accounts held at Middlesex Savings Bank, SunTrust Bank, and TD Bank, through ATM and counter withdrawals, structured in a manner to prevent the domestic financial institutions from filing Currency Transaction Reports. Overt Acts 125. In furtherance of the conspiracy and to effect the objects of the conspiracy, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO committed the following overt acts, among others, in the District of Massachusetts and elsewhere: 126. Between on or about September 27, 2010, and January 25, 2013, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as a pattern of illegal activity, ‘make approximately 504 structured cash withdrawals, totaling approximately $389,680.26, from a Page 62Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 63 of 73 Joint checking account at Middlesex Savings Bank with an account number ending in “6521,” for the purpose of causing Middlesex Savings Bank to fail to file Currency Transaction Reports 127, Between on or about February 4, 2013, and December 4, 2013, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as a patter of illegal activity, make approximately 148 structured cash withdrawals, totaling approximately $111,103.50, from a joint checking account at SunTrust Bank with an account number ending in “7568,” for the purpose of causing SunTrust Bank to fail to file Currency Transaction Reports. 128, Between on or about February 13, 2013, and March 13, 2014, a period of 393 days, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as a pattern of illegal activity, make approximately 124 structured cash withdrawals, totaling approximately $71,558.25, from a joint checking account at TD Bank with an account number ending in “0263,” for the purpose of causing TD Bank to fail to file Currency Transaction Reports. Allin violation of Title 18, United States Code, Section 371 COUNT 129 (31 U.S.C, § 5324(a) Structuring) [DEFENDANTS (13) CARLA CONIGLIARO, (14) DOUG CONIGLIARO} 129, The allegations contained in paragraphs 15 through 16 are re-alleged and incorporated herein by reference. 130, From in or around September 2010 through in or around January 2013, within the District of Massachusetts and elsewhere, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as part of a pattern of illegal activity involving more than $100,000 in a 12-month period, knowingly and for the purpose of evading the reporting requirements of Section 5313(a) of Title 31, United States Code, and the regulations promulgated thereunder, Page 63Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 64 of 73 structure and assist in structuring transactions with a domestic financial institution, that is, Middlesex Savings Bank, and cause and attempt to cause such institution to fail to file Currency ‘Transaction Reports required by Section 5313 for currency transactions in excess of $10,000. 131. Specifically, between on or about September 27, 2010, and January 25, 2013, a period of 851 days, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as a patter of illegal activity, make approximately 504 structured cash withdrawals, totaling approximately $389,680.26, from a joint checking account at Middlesex Savings Bank with an account number ending in “6521,” for the purpose of causing Middlesex Savings Bank to fail to file Currency Transaction Reports. All in violation of Title 31, United States Code, Sections 5324(a) and the regulations promulgated thereunder, and Title 18, United States Code, Section 2. COUNT 130 (31 U.S.C. § 5324(a) - Structuring) [DEFENDANTS (13) CARLA CONIGLIARO, (14) DOUG CONIGLIARO] 132, The allegations contained in paragraphs 15 through 16 are re-alleged and incorporated herein by reference. 133. From in or around February 2013 through in or around December 2013, within the District of Massachusetts and elsewhere, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO, did, as part of a patter of illegal activity involving more than $100,000 in a 12-month period, knowingly and for the purpose of evading the reporting requirements of Section 5313(a) of Title 31, United States Code, and the regulations promulgated thereunder, structure and assist in structuring transactions with a domestic financial institution, that is, Page 64Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 65 of 73 SunTrust Bank, and cause and attempt to cause such institution to fail to file Currency Transaction Reports required by Section 5313 for currency transactions in excess of $10,000, 134, Specifically, between on or about February 4, 2013, and December 4, 2013, a period 0f 303 days, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as a pattern of illegal activity, make approximately 148 structured cash withdrawals, totaling approximately $111,103.50, from a joint checking account at SunTrust Bank with an account number ending in “7568,” for the purpose of causing SunTrust Bank to fail to file Curreney ‘Transaction Reports. All in violation of Title 31, United States Code, Sections 5324(a) and the regulations promulgated thereunder, and Title 18, United States Code, Section 2. COUNT 131 (31 U.S.C. § 5324(a) ~ Structuring) [DEFENDANTS (13) CARLA CONIGLIARO, (14) DOUG CONIGLIARO] 135, The allegations contained in paragraphs 15 through 16 are re-alleged and incorporated herein by reference. 136. From in or around February 2013 through in or around March 2014, within the District of Massachusetts and elsewhere, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARG, did knowingly and for the purpose of evading the reporting requirements, of Scetion 5313(a) of Title 31, United States Code, and the regulations promulgated thereunder, structure and assist in struct ing transactions with a domestic financial institution, that is, TD Bank, and cause and attempt to cause such institution to fail to file Currency Transaction Reports required by Section 5313 for currency transactions in excess of $10,000. Page 65Case 1:14-cr-10363-RGS "SEALED* Document 1 Filed 12/16/14 Page 66 of 73 137, Specifically, between on or about February 13, 2013, and March 13, 2014, a period 0f 393 days, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO did, as a pattern of illegal activity, make approximately 124 structured cash withdrawals, totaling approximately $71,358.25, from a joint checking account at TD Bank with an account number ending in “0263,” for the purpose of causing TD Bank to fail to file Currency Transaction Reports. All in violation of Title 31, United States Code, Sections 5324(a) and the regulations promulgated thereunder, and Title 18, United States Code, Section 2. Page 66Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 67 of 73 RACKETEERING FORFEITURE ALLEGATIONS The Grand Jury further charges that: 138. Upon conviction of any violation of Title 18, United States Code, Section 1962 as alleged in Counts 1 and 2 of this Indictment, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, (6) CONNOLLY, (7) CARTER, and (8) STEPANETS shall forfeit to the United States, jointly and severally, pursuant to Title 18, United States Code, Section 1963: ‘a, any interest acquired or maintained in violation of Title 18, United States Code, Section 1962; b. any interest in, security of, claim against, or property or contractual right of any affording a source of influence over, any enterprise established, operated, controlled, conducted, or participated in the conduct of, in violation of Title 18, United States Code, Section 1962; and c. any property constituting, or derived from, any proceeds obtained, directly or indirectly, ftom racketeering activity or unlawful debt collection in violation of Title 18, United States Code, Section 1962 ‘The property to be forfeited includes, but is not limited to: a, any and all salaries, bonuses, stock distributions, retirement contributions and accounts, health and life insurance benefits including premium payments, and any and all other benefits obtained through employment by and association with the entities named in the racketeering enterprise alleged in Counts 1 and 2 from 2006 through October 2012; b. one BMW M3 purchased on or about April 26, 2011, from BMW of Sudbury; one Sailfish Boat purchased on or about March 2, 2010, from Port Harbor Marine, Ine.; d, any jewelry purchased on or about December 23, 2010, and on or about December 21, 2011, from DeScenza Diamonds; ¢. any clock, timepiece, or other luxury good purchased on or about January 11, 2012, from Delaney Antique Clocks; Page 67Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 68 of 73 139, defendants: £. the real property located at 13 Manchester Drive, Wrentham, Massachusetts, including all buildings, appurtenances and improvements thereon, more particularly described in a Quitclaim Deed recorded at Book 20971, Page 264 at the Norfolk County Registry of Deeds; g. the real property located at 15 Manchester Drive, Wrentham, Massachusetts, including all buildings, appurtenances and improvements thereon, more particularly described in a Quitclaim Deed recorded at Book 28437, Page 144 at the Norfolk County Registry of Deeds; h. the real property located at 17 Manchester Drive, Wrentham, Massachuseits, cluding all buildings, appurtenances and improvements thereon, more particularly described in a Quitclaim Deed recorded at Book 28437, Page 148 at the Norfolk County Registry of Deeds; and i, the real property located at 25 Newport Avenue, North Kingstown, Rhode Island, including all buildings, appurtenances and improvements thereon, more particularly described in a Warranty Deed recorded at Book 2437, Page 174 at the North Kingstown Office of the Town Clerk. If any of the property described above, as @ result of any act or omission of the a, cannot be located upon the exercise of due diligence; b. has been transferred or sold to, or deposited with, a thitd party; ©. has been placed beyond the jurisdiction of the court; 4. has been substantially diminished in value; or €. has been commingled with other property that cannot be divided without difficuky, it is the intention of the United States, pursuant to Title 18, United States Code, Section 1963(m), to seek forfeiture of any other property of the defendants up to the value of the property described in paragraph 138. Alll pursuant to Title 18, United States Code, Section 1963 and Rule 32.2(a) of the Federal Rules of Criminal Procedure. Page 68Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 69 of 73, ‘The Grand Jury further charges that: 140. Upon conviction of any violation of Title 18, United States Code, alleged in Counts 4 through 56 of this Indictment, defendants (1) CADDEN, (2) CHIN, (3) SVIRSKIY, (4) LEARY, (5) EVANOSKY, and (6) CONNOLLY shall forfeit to the United States, jointly and severally, pursuant to Title 18, United States Code, Section 981(a)(1\(C) and Title 28, United States Code, Section 2461(c), any property, real or personal, that constitutes, or is derived from, proceeds traceable to the commission of the offenses. ‘The property to be forfeited includes, but is not limited to: a b ‘one BMW MG purchased on or about April 26, 2011, from BMW of Sudbury; one Sailfish Boat purchased on or about March 2, 2010, from Port Harbor Marine, Inc.; any jewelry purchased on or about December 23, 2010, and on or about December 21, 201, from DeScenza Diamonds; any clock, timepiece, ot other luxury good purchased on or about January 11, 2012, from Delaney Antique Clocks; the real property located at 13 Manchester Drive, Wrentham, Massachusetts, including all buildings, appurtenances and improvements thereon, more particularly described in a Quitclaim Deed recorded at Book 20971, Page 264 at the Norfolk County Registry of Deeds; the real property located at 15 Manchester Drive, Wrentham, Massachusetts, including all buildings, appurtenances and improvements thereon, more particularly described in a Quitclaim Deed recorded at Book 28437, Page 144 at the Norfolk County Registry of Deeds; the real property located at 17 Manchester Drive, Wrentham, Massachusetts, including all buildings, appurtenances and improvements thereon, more particularly described in a Quitclaim Deed recorded at Book 28437, Page 148 at the Norfolk County Registry of Deeds; and Page 69Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 70 of 73, hh, the real property located at 25 Newport Avenue, North Kingstown, Rhode Island, including all buildings, appurtenances and improvements thereon, more particularly described in a Warranty Deed recorded at Book 2437, Page 174 at the North Kingstown Office of the Town Clerk. 141, If any of the property described above, as a result of any act or omission of the defendants; a. cannot be located upon the exercise of due diligence; b, has been transferred or sold to, or deposited with, a third party; ©. has been placed beyond the jurisdiction of the court; 4, has been substantially diminished in value; or has been commingled with other property that cannot be divided without difficulty, it is the intention of the United States, pursuant to Title 21, United States Code, Section 853(p), as, incorporated by Title 28, United States Code, Section 2461(c), to seek forfeiture of any other property of the defendants up to the value of the property described in paragraph 140, All pursuant to Title 18, United States Code, Section 981 (a)(1)(C), Title 28, United States Code, Section 2461(¢), and Rule 32.2(a) of the Federal Rules of Criminal Procedure. FDCA FORFEITURE ALLEGATIONS The Grand Jury further charges that: 142, Upon conviction of any violation of Title 21, United States Code, Sections 351(a\(2MA), 352(a), 353(b}(1), 331(a), and/or 333(a)(2) as alleged in Counts 57 through 109 of this Indictment, defendants (1) CADDEN, (2) CHIN, G) SVIRSKIY, (4) LEARY, (5) EVANOSKY, (8) STEPANETS, (11) KATHY CHIN, and (12) THOMAS shall forfeit to the United States, jointly and severally, pursuant (0 Title 21, United States Code, Section 334 and Title Page 70Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 71 of 73 28, United States Code, Section 2461(c), any quantities of drugs described in Counts $7 through 109 that were introduced into interstate commerce in violation of Title 21, United States Code, Sections 351(a)(2(A), 352(a), 353(b){1), 331(a), and/or 333(a)(2). 143, If any of the property described above, as a result of any act or omission of the defendants; a. cannot be located upon the exercise of due diligence; b. has been transferred or sold to, or deposited with, a third party; €. has been placed beyond the jurisdiction of the court; 4. has been substantially diminished in value; or €. has been commingled with other property that cannot be divided without difficulty, itis the intention of the United States, pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 28, United States Code, Section 2461(c), to seek forfeiture of any other property of the defendants up to the value of the property described in paragraph 142, All pursuant to Title 21, United States Code, Sections 334 and 853, Title 28, United States Code, Section 2461 (c), and Rule 32.2(a) of the Federal Rules of Criminal Procedure STRU ING FORFEI RE ALLEG. TLONS ‘The Grand Jury further charges that: 144. Upon conviction of any violation of Title 31, United States Code, Section 5324(a) as, alleged in Counts 129 through 131 of this Indictment, defendants (13) CARLA CONIGLIARO and (14) DOUG CONIGLIARO shall forfeit to the United States, jointly and severally, pursuant to Title 31, United States Code, Section 5317, all property, real or personal, involved in the Page 71Case 1:14-cr-10363-RGS “SEALED* Document 1 Filed 12/16/14 Page 72 of 73 offenses and any property traceable to such property, including but not limited to at least $578,324.61 in United States currency. 145. If any of the property described above, as a result of any act or omission of the defendants: a. cannot be located upon the exercise of due diligence; b. has been transferred or sold to, or deposited with, a third party; «. has been placed beyond the jurisdiction of the court; 4. has been substantially diminished in value; or ©. has been commingled with other property that cannot be divided without culty, itis the intention of the United States, pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 31, United States Code, Section 5317(c)(1)(C) and Title 28, United States Code, Section 2461(c), to seek forfeiture of any other property of the defendants up to the value of the property described in paragraph 144, All pursuant to Title 31, United States Code, Section 5317 and Title 28, United States Code, Section 2461 and Rule 32.2(a) of the Federal Rules of Criminal Procedure. Page 72Case 1:14-cr-10363-RGS *SEALED* Document 1 Filed 12/16/14 Page 73 of 73 A TRUE BILL Foréperson of the Grand Jury DA RAL STRACHAN (GEORGE P, VARGHESE Assistant United States Attomeys JOHN W.M. CLAUD Trial Atomney United States Department of Justice Consumer Protection Branch DISTRICT OF MASSACHUSETTS: December 16, 2014 Returned into the District Court by the Grand Jurors and filed. a Lei Page 73,