Yesterday, Thomas Lavery, 63, of Irvine, California, was sentenced to four years and four months of incarceration to be followed by three years of supervised release by the US District Court in Concord, New Hampshire, for his involvement in a prescription drug diversion case, according to a court release. The court also entered an order of forfeiture against Lavery for the sum of $1,009,460.
Lavery was found by the court to be a leader and organizer in a scheme in which large quantities of the HIV drug Serostim (somatropin recombinant) were purchased from patients infected with HIV and then reintroduced into the wholesale distribution chain using falsified paperwork. The diverted drugs were sold in various parts of the country to licensed distributors who believed they were purchasing legally supplied drugs.
On Sept. 4, 2007, Lavery pleaded guilty to a 44-count indictment charging him with wire fraud conspiracy and wire fraud, money laundering, conspiracy to engage in unlicensed wholesale distribution of prescription drugs, and false statements in a matter under the jurisdiction of the US Food and Drug Administration.
Lavery ran the distribution scheme with Robert McFadden, who was sentenced on May 19, 2009, to three years of incarceration to be followed by two years of supervised release. McFadden, an attorney in Palm Springs, California, was convicted of conspiracy to launder monetary instruments, conspiracy to commit wire fraud, and conspiracy to engage in unlicensed wholesale distribution of prescription drugs by a US District Court in January 2009. In the scheme, McFadden used his client trust account to launder more than $2.1 million from licensed wholesalers in California and in Milford, New Hampshire.
Also involved in the scheme was Beth Handy of Milford, New Hampshire, who has pleaded guilty to similar charges and awaits sentencing in the US District Court in Concord. Handy, who at the time was a licensed drug wholesaler in New Hampshire, sold diverted Serostim to other prescription drug wholesalers. Handy and Lavery falsified paperwork such as pedigrees, invoices, packing slips, and shipping labels to create the illusion that the Serostim they sold had been obtained legally and was shipped from New Hampshire, when it was actually being shipped from Palm Springs, California. The paperwork was submitted to the Serostim customers and the New Hampshire Board of Pharmacy.
Special agents of the US Food and Drug Administration’s Office of Criminal Investigations, the Health and Human Services’ Office of the Inspector General, and the Internal Revenue Service investigated the case. The case was prosecuted by special assistant US attorney Sarah Hawkins and assistant US attorneys Aixa Maldonado-Quinones and Mark Irish.
Irish said in an interview with PharmTech.com that the “sophisticated” scheme was investigated for the past several years by the three agencies, and that the government dedicated many resources to the case because it greatly affected the integrity of the distribution system of prescription drugs. “We hope this sends a message that if you engage in this kind of diversion, you will end up with a federal prison sentence,” he said.