Michigan pharmacy owner and 18 of his employees face jail time for conspiracies that provided misbranded, returned, and out-of-date pharmaceuticals to nursing homes and adult foster care homes throughout the state.

Michigan pharmacy owner and 18 of his employees face jail time for conspiracies that provided misbranded, returned, and out-of-date pharmaceuticals to nursing homes and adult foster care homes throughout the state.

Kenwood pharmacy owner Kim Duron Mulder was sentenced to 10 years in prison on August 27, 2015 for his pivotal role in supplying Michigan nursing homes and adult foster care homes with misbranded and recycled drugs, reports the FBI. According to the FBI press release, “The process by which Kentwood Pharmacy returned drugs to pharmacy stock resulted in the cross-contamination of drugs, improper labeling of drugs, the placement of different drug dosages into stock bottles, and the placement of the altogether wrong drugs into stock bottles. These practices also allowed Vice President Richard Clarke to remove returned controlled substances from the pharmacy, including Vicodin and OxyContin, and sell the drugs on the street in northern Michigan.”

Mulder, along with 8 other employees of his Kenwood Pharmacy business were originally charged via Grand Jury in November 2013, reports the FDA. They were charged with conspiracy to misbrand drugs and conspiracy to create false prescription records. Mulder also faces a charge of structuring cash transactions in order to avoid bank-reporting regulations.

Kenwood Pharmacy was in operation from 2004-2010, and ceased operations upon the execution of federal search warrants, reports the FBI.

In February, the FDA reported that Mulder and a co-conspirator pleaded guilty to charges that they illegally restocked and re-dispensed recycled pharmaceuticals via Kentwood Pharmacy. Mulder pled guilty to a conspiracy to commit healthcare fraud based on billing Medicare, Medicaid, and private insurance plans for misbranded and adulterated drugs.

The FBI press release noted that the judge in the case cited the fact that public and private insurers paid more than $79 million for Kenwood Pharmacy’s misbranded medications, which were then sent to patients at more than 800 nursing homes throughout Michigan. Judge Jonker pointed to Mulder’s previous felony convictions and noted that the business was “conceived in fraud” and that Mulder “should never have received a [pharmacy] license.” He also said that Mulder “created a culture of chaos” and that “this was fraud, pure and simple, from the top” and “perpetrated by a person with a history of fraud.”

Prosecuting U.S. Attorney Patrick Miles said, “The public must be able to rely on those who own and run pharmacies to operate in compliance with the federal and state laws regulating the handling, packaging, and distribution of drugs. When health care providers violate regulations meant to protect the public and then bill public and private healthcare insurers for such drugs, my office will pursue serious charges, including health care fraud.”

The investigation of this matter involved the FDA, HHS-OIG, FBI, DEA, IRS, the Michigan Attorney General’s Office and the Michigan State Police. Assistant U.S. Attorneys Ray Beckering and Adam Townshend prosecuted the case on behalf of the United States.

By S. Imber