Lawsuit targets assets of pharmacy linked to meningitis outbreak

Published October 19, 2012

| Reuters

The officers behind New England Compounding Center have been targeted in a lawsuit that seeks to freeze their personal assets, the latest fallout for the pharmacy linked to the deadly meningitis outbreak.

Peter McGrath, a former federal prosecutor, said he was spearheading a civil case that alleges NECC and company officers Barry and Lisa Cadden and Greg Conigliaro are responsible for the tainted steroid injections that have killed 20 people so far. The lawsuit was filed on behalf of an unnamed plaintiff in Middlesex County Superior Court in suburban Boston, court records show.

"We want to pierce the corporate veil and go after the individuals," McGrath said Friday in a telephone interview. "My clients are in a lot of pain." His firm, based in Concord, New Hampshire, is representing several people injured in the meningitis outbreak.

NECC's public relations firm did not return a call seeking comment.

Federal authorities are investigating how NECC supplied hospitals, clinics and other healthcare providers with large orders of compounded drugs and whether it violated state laws regulating pharmacies. U.S. authorities say Framingham, Massachusetts-based NECC distributed thousands of vials of a contaminated steroid that has put 14,000 people at risk of contracting meningitis.

In the lawsuit filed in Massachusetts state court, the John Doe plaintiff is seeking a court order on November 6 to freeze the assets of the company and the named officers. Such a "prejudgment remedy" is allowed in Massachusetts state courts during pending litigation.

Members of the Boston-area family whose own the pharmacy and related companies spent several million dollars on luxury homes in the months before U.S. authorities shut down their operations. Greg Conigliaro is a recycling entrepreneur who joined forces with his pharmacist brother-in-law, Barry Cadden, and other family members to start NECC in 1998. His sister Lisa, also a pharmacist is married to Cadden.

The real estate transactions, disclosed in publicly available deeds filed in March and April, provide a glimpse into the Conigliaro family's fortune before authorities moved in and shut down the pharmacy operations of NECC and Ameridose LLC, a related, but larger drug manufacturer and compounder.

In March and April, Greg Conigliaro paid $2.4 million for a beachfront home on Cape Cod, while his brother Doug Conigliaro paid $4.2 million for a penthouse condo on Beacon Street in Boston's tony Back Bay neighborhood, the deeds show.

About the same time, a real estate venture owned and managed by the two brothers paid $4.6 million to buy the state-of-the-art facility that Ameridose used to win new customers and to rapidly expand its business, real estate records show. Ameridose previously leased the building.

Doug Conigliaro, who is president of Medical Sales Management, the sales arm for NECC and Ameridose, is not named in the lawsuit filed in Middlesex County.

The Caddens, Greg Conigliaro and Doug Conigliaro did not immediately respond to messages seeking comment.

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http://www.foxnews.com/health/2012/10/19/lawsuit-targets-assets-pharmacy-linked-to-meningitis-outbreak/