The FBI conducted early-morning arrests of 14 people connected with NECC, a compounding pharmacy that produced contaminated steroids that sickened 750 people and killed 64 of them in 2012. Among those arrested were the two owners of NECC and the wife of one owner:
Federal agents arrested 14 people early Wednesday morning in connection with the meningitis deaths linked to NECC in Framingham, including the company’s owners.
Several law enforcement vehicles were seen leaving the Wrentham estate of New England Compounding Center owner Barry Cadden before sunrise.
Also arrested were co-owner Greg Conigliaro and his wife Carla at their home in Southborough, according to WBZ-TV’s Lauren Leamanczyk. Both were booked at the Southborough police station.
The specific charges have not been released yet. The supervisory pharmacist at the time had already been charged with mail fraud three months ago, but had not been taken into custody until today:
One of those arrested was Glenn Adam Chin, a former supervisory pharmacist, who had been charged with mail fraud in September.
Tainted steroids manufactured by the pharmacy were blamed for a 2012 outbreak. About 750 people in 20 states developed meningitis or other infections after receiving the contaminated steroids. Michigan, Tennessee and Indiana were the hardest-hit states.
The arrests may not necessarily be directly related to the contamination, or at least not entirely. Almost two years ago, the Boston Globe’s Todd Wallack reported that the owners of NECC pulled $16 million out of the business in the year prior to filing a Chapter 11 bankruptcy:
Bankruptcy records show the four family members who cofounded New England Compounding Center received more than $16 million in wages and profits from the firm from December 2011 through November 2012 — roughly equal to half its sales during this period.
The filings also show the family members racked up $90,000 on corporate American Express credit cards, including charges made after the company shut down in early October. The company filed for Chapter 11 bankruptcy just before Christmas.
An attorney involved in the bankruptcy case said he felt “shock and amazement” when he saw the list of payments for family members.
“It’s tremendously unusual,” said William R. Baldiga, a partner at the Boston law firm Brown Rudnick who is representing the committee of unsecured creditors owed money by the company, including people who were sickened by the company’s drugs. “This is not a large company.”
The timing on the raid is remarkable too because of its proximity to a settlement on the bankruptcy. Two weeks ago, a federal court approved a plan to set aside $133 million to compensate victims and their families, to which NECC’s insurers and the clinics that used its products will add $56.8 million. Perhaps the Department of Justice may have waited for the settlement to get firmed up before taking criminal action against the defendants. The FBI arrested a lot more than four people, though, so it’s obviously not just about the bankruptcy, and therefore it may just be a coincidence.
Prosecutors will hold a press conference later today to announce the specific charges, and all of the defendants will be arraigned later this afternoon.