Jury convicts pharmacy ex-employees in deadly U.S. meningitis outbreak

By Nate Raymond

BOSTON (Reuters) - A co-owner and four ex-employees of a Massachusetts compounding pharmacy were convicted on Thursday of committing frauds and other illegal activities that helped boost its business before a deadly 2012 fungal meningitis outbreak linked to drugs it made.

The verdict by a federal jury in Boston came in the latest criminal trial involving former executives and employees of New England Compounding Center, which produced mold-tainted steroids that prosecutors said sickened hundreds of people and killed 76.

The jury found pharmacist Gene Svirskiy guilty of racketeering and pharmacist Christopher Leary guilty of mail fraud over what prosecutors said was a scheme to mislead NECC's hospital customers about the quality of the drugs it produced.

Jurors also found NECC co-owner Gregory Conigliaro and Sharon Carter, its former director of operations, guilty of conspiring to defraud the U.S. Food and Drug Administration into thinking NECC was a compounding pharmacy that should be state regulated.

Prosecutors said prior to the outbreak, NECC pharmacists misled hospitals about the quality of various drugs it sold them, which were often produced in filthy conditions, made with expired ingredients and shipped without proper testing.

State-regulated compounding pharmacies make or mix drugs customized for patient-specific prescriptions to address individual needs. But prosecutors contended NECC was actually a drug manufacturer making medications in bulk without FDA oversight.

Jurors cleared pharmacist Alla Stepanets of racketeering conspiracy but convicted her on misdemeanor charges that she helped fill prescriptions for drugs using fake patient names, including "Wonder Woman," "Donald Trump" and "Betty Ford."

Jurors acquitted a sixth defendant, pharmacist Joseph Evanosky, of racketeering and mail fraud. Mark Pearlstein, his lawyer, welcomed the acquittal.

"He was an innocent man who should never have been charged," Pearlstein said, calling convictions of Evanosky's co-defendants sad.

Lawyers for the other defendants either declined comment or could not immediately be reached for comment. They are scheduled to be sentenced in March

The six were among 14 people indicted in 2014 after Framingham, Massachusetts-based NECC's steroids caused the meningitis outbreak, which sickened 793 people in 20 states, prosecutors said.

Jurors in two earlier trials in 2017 convicted NECC co-founder Barry Cadden and supervisory pharmacist Glenn Chin of racketeering and fraud but cleared them of second-degree murder over the deaths of 25 patients.

Unlike Cadden and Chin, who were sentenced to nine and eight years in prison, respectively, the six defendants in the latest trial were not charged over any patient deaths.

(Reporting by Nate Raymond in Boston; Editing by Bill Berkrot)