Pharmalogical Inc. officers indicted in cancer drug fraud

In In The News by Barbara Jacoby

Thumbnail for 5873By ROBERT E. KESSLER


The operators of a Great Neck drug supply company were arrested Wednesday and charged with selling more than $17 million worth of misbranded or counterfeit drugs or medical devices, ranging from those for cancer to birth control, officials said.

William Scully, 45, of Commack, and Shahrad Rodi Lameh, 40, of Manhasset, pleaded not guilty to a 73-count indictment at arraignment in federal court in Central Islip, and were each released on a $500,000 bond.

Scully is president and Lameh is vice president of Pharmalogical Inc. which does business as Medical Device King, officials said.

“[In]stead of seeing an opportunity to alleviate suffering and cure disease, Scully and Lameh saw a chance to make money off the backs of those already fighting for their lives, selling counterfeit cancer medications to an unsuspecting clinic,” Eastern District U.S. Attorney Loretta Lynch said in a statement.

“The defendants deliberately and repeatedly flouted the laws enacted to protect our citizens, all in order to flood the market with counterfeit and unapproved drugs and medical devices just so they could line their own pockets.”

Attorneys for Scully and Lameh said their clients had acted legally, and their arrests by agents of the federal Food and Drug Administration came as a surprise since their clients had been in discussions to resolve the matter with officials for the past two years, and had no intention of fleeing.

Both Scully’s attorney, Peter Tomao, of Garden City, and Geoffrey Kaiser, of Uniondale, who represents Lameh, agreed that the indictment “an exercise in overreach.”

The 73-count indictment included charges of conspiracy, wire fraud, introducing misbranded drugs into interstate commerce, delivering for pay misbranded drugs, fraudulent importation of goods, and trafficking in counterfeit drugs.

Most of the charges involved misbranded drugs, that is versions of drugs that were manufactured overseas and imported but had been not approved for use in the United States, despite Scully and Lameh’s claims that they were okayed by the FDA. Often the drugs were labeled in foreign languages without approved FDA instructions in English for their use, the indictment said.

Among the drugs and devices were foreign produced versions of the anti-cancer drugs Avastin, Aloxi, Aredia and Rituxan; Remicade, used in treating Chrohn’s disease; and the IUD contraceptive device, Mirena.

The countries they were imported from included Scotland, Turkey, the United Kingdom, the Cayman Islands, Canada, and the United Arab Emirates and Finland, the indictment said.

The drugs and devices were purchased by medical offices on Long Island, in upstate New York, Iowa, Louisiana, Nevada, New Jersey and Texas, the indictment said.

The one count that involved selling a supposed drug that had no known medically active ingredients was a single charge in the indictment of trafficking in counterfeit cancer drugs between April 6 and 24 of 2012, according to the indictment.

Sources said that count was related to the Hematology and Oncology Center of Iowa, in Des Moines, which received the supposed anti-cancer drugs that in fact contained no active anti-cancer medication.

A person who answered the phone at the center Wednesday,and would only identify himself as Mitch, the practice manager, said the center had received “two strange looking vials of medicine,” from the Great Neck company, and did not use them because they were suspicious of their contents. The vials were eventually turned over to the FDA, he said.

Both Scully and Lameh, if convicted, each face up to 20 years in prison, forfeiture of more than $17 million, and a $250,000 fine.

With John Valenti