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Investigators' Reports

FDA Uncovers Contaminated Covers

A ready-made market for medical equipment covers awaited Joseph Cottone and Bill O'Ryan when their company, American Medical Products (AMP), started marketing the devices five years ago. Because hospitals needed the covers to shroud instruments used in performing angioplasty and other catheterization procedures, business was potentially lucrative.

But as FDA investigators learned, the devices sold initially were not sterile, though their packaging clearly stated they were. Typically, the manufacturer sterilizes the covers by gamma radiation before they are sold; AMP's earliest covers did not undergo this process. FDA documented that between April 10 and May 15, 1992, AMP sold about 4,440 nonsterile covers to hospitals nationwide.

These covers, made of clear plastic with an elastic band around the bottom to hold them in place, are used to cover fluoroscopes and other x-ray equipment.

Because they are used in a sterile surgical field with catheters, pacemakers, and other devices that actually enter the body, nonsterile covers pose potential contamination hazards to patients.

For exposing patients to this risk, Cottone is now serving time in federal prison. Judge Harold Murphy, of the U.S. District Court for the Northern District of Georgia, sentenced Cottone in January to 22 months in jail and three years' probation for conspiracy and providing a false statement to FDA. According to the Department of Justice, the sentence was one of the longest ever obtained in a device prosecution.

Bill O'Ryan, former financial backer of the company, testified against Cottone at a grand jury hearing and at Cottone's sentencing. O'Ryan was sentenced in January to two years' probation, including six months of home confinement. He received a reduced sentence after cooperating with authorities.

The case began when Marie Mathews, an investigator in FDA's Atlanta district office, received a complaint in April 1992 from a competing cover maker. The complainant claimed to know that a Clearwater, Fla., hospital had recently bought some of AMP's covers and that the covers possibly were not sterile.

The following month, Mathews followed up on the tip and visited the hospital. Officials there showed her invoices documenting the hospital's purchase of AMP medical covers labeled as "sterile." In June, Mathews, with fellow investigator Carol Selman, inspected AMP's facility in Cartersville, Ga. Cottone, whose official title at the time was operations manager, told Mathews that the company had not sold any products until May 20, and he provided invoices showing that. Cottone signed an affidavit swearing to the truth of this statement.

The AMP inspection also revealed violations of good manufacturing practices (GMPs). "Among the things we found was rodent contamination that came in contact with the raw materials used to make the covers," Mathews says.

The next day, the two investigators went to AMP's shipping contractor in Atlanta. Officials there verified that they had shipped AMP medical covers numerous times before May 20. Mathews went back to AMP's plant and confronted Cottone with the shipper's information. At first, she says, Cottone tried to explain the shipments by claiming that some of the covers had been sent as samples and weren't intended to be sterile. Eventually, he confessed to distributing nonsterile covers.

But Cottone held back some invoices because, Mathews says, "he wanted to limit how much we knew. He was afraid he'd lose his remaining customers' business if they got a call from FDA."

FDA tests of nonsterile cover samples from AMP showed the presence of molds, yeasts, and other microorganisms, all considered unacceptable in a sterile environment. Because surgeons may touch the covers with gloved hands and then touch the catheter tube that is threaded into the body for diagnostic purposes or to unblock clogged blood vessels, any contamination on the covers could be transferred to the catheter and into the patient's body.

FDA urged the company to recall its covers shipped before May 19, after Mathews determined that AMP's contractor had begun sterilizing covers shipped after May 19.

Cottone claimed a recall began June 17, 1992. But FDA investigators found the recall to be ineffective. Cottone told Mathews he had called his customers, but "in our checks of hospitals, virtually none had received any recall notice," Mathews says. "The recall was a disaster."

On Jan. 20, 1993, the U.S. District Court for the Northern District of Georgia entered a consent decree of injunction of AMP because of the GMP infractions. The company was allowed to reopen several weeks later after it corrected the violations.

On April 17, 1996, a grand jury indicted Cottone on 18 counts of violations, including sales of misbranded and adulterated medical devices and lying to a federal agent. Cottone pleaded guilty in April 1996 to two counts; the others were dismissed. His sentence was "enhanced" partly because Cottone had a previous criminal record that included drunk driving convictions. The sentencing judge also took into account other factors, such as Cottone's obstruction of justice during the investigation. This resulted in a stiffer sentence, says Mathews. Judge Murphy said Cottone had been "wanton and reckless in his risk to the patients exposed to these covers."

O'Ryan, in an interview with Mathews during the investigation, said he and Cottone knew the covers were not sterile. He said selling the devices was a "bad business decision" brought about because of "hard times."

The company is still in business, but it is now called MC Medical and is owned by Cottone's wife.

John Henkel is a member of FDA's public affairs staff.

Plumber's Counterfeit Drug Operation Down the Tubes

FDA continues a multinational investigation of others who were involved in the scheme, including the man FDA's Office of Criminal Investigations suspects was the operation's "kingpin."

Braun's involvement was discovered in a three-month investigation in which OCI agents gathered evidence showing that Braun ran a shell company--an answering service with a fictitious name and address that took orders for the fertility drugs Pergonal (menotropins for injection) and Metrodin (urofollitropin for injection). The evidence showed that Braun delivered fake copies of the drugs to U.S. drug wholesalers, giving them huge discounts of as much as 20 percent off the average wholesale price.

The manufacturer of genuine Pergonal and Metrodin, Serono Laboratories Inc. of Norwell, Mass., contacted OCI in September 1993 to report that some unusual-looking drugs and their packaging brought to the company's attention had been tested and found to be counterfeited.

Serono also told OCI they had noticed an unexpected drop in sales of Pergonal and Metrodin during the previous 18 months.

FDA "hit this investigation hard," says OCI Special Agent Brian Krompasick, noting that 14 of OCI's New York agents, as well as agents from Miami, Chicago, and Washington, D.C., were involved. "For the public safety, we wanted to stop these drugs from going into the stream of commerce."

While FDA knows of no injuries from the imposter drugs, the agency's concern was that the drugs could pose a danger because they were not manufactured according to FDA's safety and effectiveness standards.

Also, says OCI Special Agent Stephen Haynes, "It seemed likely the case involved a sophisticated and organized network reaping millions of dollars in fraudulent profit."

Braun was selling the fake fertility drugs for a wholesale price of about $380 for a one-month's supply, compared with $460 for the real Pergonal and Metrodin.

To catch Braun at work, OCI got the help of a major Serono distributor who had been approached in September 1993 about buying the fakes. In September and October 1993, the distributor arranged to have more than $500,000 worth of the fertility drugs delivered. When they were delivered, OCI seized all the batches, which were later tested and found to be fakes.

The distributor--or agent Krompasick posing as the distributor's accountant--was wired to record the conversations with Braun and other suspected counterfeiters during the deliveries.

For additional evidence, FDA set up an undercover operation outside the distributor's warehouse on Oct. 28, 1993.

While an OCI agent sat in his parked car, one of the suspected counterfeiters arrived at the warehouse and couldn't find a legal parking spot for his van. So he double-parked--right next to the agent's car.

Outside the van, the suspected counterfeiters discussed the terms of the deal with the distributor. "They were almost leaning on our car," Krompasick says. "Our agent was so nervous. He's in the car--police radio and all--right under their noses."

After photos taken by the OCI agent were enhanced by an FBI lab, Krompasick says, "it was undeniable that Braun and his van were at the meeting."

But FDA wanted to find the source of Braun's drugs. So, as planned beforehand, when the suspected counterfeiters' delivery man brought another load of drugs to the warehouse, the cooperating distributor told him that FDA was onto the scam, and he couldn't accept the delivery.

OCI agents then followed the delivery car as it left with the rejected drugs. They saw the delivery man meet Braun in Brooklyn, where the two loaded the boxes of drugs into Braun's van.

"Because of the heavy traffic and dark, we made the decision to arrest Braun then and there," Krompasick says. "Braun was oblivious to the surveillance; he didn't know what hit him."

While searching Braun and his van, OCI agents found his wallet with identification, as well as blank invoices with the fictitious name and address of the shell company and two metal dye stamps like those that would be used to print the fraudulent packages.

"When we found those things, we knew we had one of our counterfeiters," Krompasick says.

Braun pleaded guilty to conspiracy to sell misbranded drugs and was sentenced Nov. 8, 1995, in the U.S. District Court for the Eastern District of New York. In addition to prison, probation, and the money he was ordered to pay to Serono, he also had to perform 250 hours of community service.

Within two weeks of Braun's arrest, Serono saw a recovery in sales. "It appears we've shut this counterfeit group down," Krompasick says.

--Tamar Nordenberg

A Trail of Tiny Turtles

FDA analysis later showed the store's turtles--about 30 of them, which the pet store owner voluntarily handed over--carried Salmonella bacteria. In humans, Salmonella can cause fever, diarrhea, and other gastrointestinal problems; in severe infection, it can lead to other complications, even death.

The laboratory finding was not unusual because turtles are well-known carriers of Salmonella. The public health risk this presents was the reason FDA banned sales of baby turtles to consumers in 1975. Young children are especially vulnerable to Salmonella infection from turtles because they like to hold the animals and then will stick their fingers--sometimes even the turtles themselves--in their own or another child's mouth. Babies also are vulnerable, usually through indirect contact from parents or siblings.

Despite the dangers--and the ban--consumers continue to buy the baby turtles as pets, not only in pet stores but at flea markets and street fairs, as well, according to FDA's San Francisco district office. The turtles sell for as much as $15 each in the Las Vegas area, said Luis Chavarria, the investigator with FDA's Las Vegas resident post who intercepted the turtle sale at the pet store last October.

Their appeal is strong, as Chavarria and other FDA personnel discovered. "They're incredibly cute," Chavarria said. "They're the cutest things you ever saw."

FDA personnel were so taken with the turtles that they decided to videotape them for a news piece to warn consumers about the dangers of baby pet turtles. At press time in May, all but 10 of the turtles had died of natural causes, and the agency hadn't decided what to do with the others.

Congress authorized FDA to regulate baby turtles in the early 1970s. At that time, 15 million baby turtles were sold yearly in the United States. Almost 5 percent of U.S. households had them as pets. And the Centers for Disease Control (now the Centers for Disease Control and Prevention) estimated that baby turtles accounted for 14 percent of Salmonella illnesses yearly in the United States.

FDA's ban applies only to turtles with a shell length of 4 inches (10 centimeters) or less that are sold--or given away--to consumers. FDA allows their use for scientific, educational and exhibition purposes and for export to other countries.

None of those purposes was evident when Chavarria, responding to an anonymous phone call, visited the Las Vegas pet store. He walked in to hear a pet store employee pitching the sale of turtle supplies--with the turtles thrown in as freebies--to a woman with young children. Chavarria interrupted to explain the ban on small turtles, and the woman left the store without taking any.

"The employee was very upset at my disrupting her business," Chavarria recalled. "She called the store's owner right away."

The owner arrived within 15 minutes, and Chavarria explained the turtle ban to him. Although he denied it initially, the owner eventually admitted that he knew the sale of baby turtles to consumers was illegal, Chavarria said. But when Chavarria told him he would have to destroy the illegal turtles, as required under federal law, the owner balked.

"He said his employees wouldn't allow him to destroy the turtles," Chavarria said. "He wanted me to take them away."

Without a warrant, Chavarria couldn't confiscate the turtles, so he arranged with the owner to take all the turtles for testing. The owner signed an affidavit admitting to the sale of illegal turtles and surrendered the turtles to Chavarria.

Chavarria took them to his office, and, as directed by FDA's San Francisco district laboratory, planned to destroy the turtles by placing them in the freezer overnight. Typically, live samples must be destroyed before testing, and freezing is considered a humane way of destroying turtles because the cold temperatures put them into a hibernating state. Eventually, they die in their sleep.

But, Chavarria recalled, when he went to put the turtles in the freezer, he couldn't do it. "They looked up at me with their little eyes. I remembered buying them at the five-and-ten store when I was a child. I couldn't put them in the freezer," he said.

So Chavarria shipped the turtles live by air to the San Francisco laboratory. There, employees decided to keep the turtles alive for use in a video.

To test the live turtles for Salmonella, Lorraine Humes, a microbiologist with FDA's San Francisco laboratory, put the turtles into lactose broth, a medium for testing food for Salmonella contamination. She allowed the turtles to swim in the broth for five minutes and then put them back in their aquarium. Tests of the broth showed the turtles were carrying Salmonella.

FDA is offering a video of the testing to area TV stations to show consumers how seemingly safe, cute turtles can actually be dangerous.

FDA is not aware of any illnesses stemming from turtles that may have been sold by the Las Vegas pet store.

But, Chavarria said, "Baby turtles can create a lot of problems. So I feel good about being able to prevent at least one customer from taking turtles that, it turned out, came from a contaminated batch."

--Paula Kurtzweil

Retired Sales Rep Sentenced
For Selling Rx Drug Samples

At press time in May, Edward Mikula, of Cheektowaga, N.Y., was serving seven months in federal prison for violating the Prescription Drug Marketing Act of 1988. The law bars the sale, purchase, trade, or the offer to sell, buy or trade prescription drug samples. Such practices are considered hazardous because of the risk of counterfeit, adulterated, misbranded, subpotent, or expired drugs being sold to consumers. They also constitute fraud against legitimate prescription drug sellers.

Mikula, a former Wyeth-Ayerst Laboratories sales representative who retired from the company in 1987, was convicted in the U.S. District Court for the Western District of New York in July 1996 and sentenced in December. The evidence showed that between 1988 and 1993, he sold prescription drug samples of Premarin, Procardia, Inderal, Lodine, Feldene, Reglan, and others made by various companies, including Wyeth-Ayerst, Lederle Laboratories, A.H. Robins Co., and Pfizer Labs, to former business acquaintances, such as pharmacists and other pharmaceutical purchasers.

"He sold anything he could get his hands on," said Raymond Kent, a compliance officer in FDA's Buffalo district office.

Kent heads a team of FDA investigators that, along with FBI and Internal Revenue Service agents, is "heavily investigating" the sale of prescription drug samples in the Buffalo, N.Y., area, Kent said. Those previously convicted and sentenced include pharmacists, a dentist, a pharmaceutical salesman, and a retired hospital administrator.

Mikula's role in the scheme came to light earlier in the investigation when his name was linked in documents and conversations with others. Sifting through various records and piecing together various bits of evidence, investigators learned that Mikula, according to a grand jury indictment, met "on various occasions" with a co-conspirator to buy drug samples from another co-conspirator. Mikula refused to name his co-conspirators.

The indictment said Mikula and his co-conspirators sold drug samples in their original packaging or in plastic sandwich bags and other containers.

The indictment cited five instances in which Mikula received cash or checks for amounts ranging from $500 to thousands of dollars for selling drug samples. But, Kent said, "We don't know how much he made in all."

A previous defendant who pleaded guilty to his involvement in the Buffalo-area drug diversion scheme and who spent time in a minimum-security prison, earned an estimated $80,000 from his illegal activities.

A grand jury handed down the three-count indictment against Mikula in May 1995. He pleaded guilty to all three counts July 22, 1996.

Citing the "seriousness" of Mikula's offenses, his "misguided belief" that it would be unfair to cooperate with the investigation, and his apparent belief that he had "done nothing wrong," District Judge Richard Arcara sentenced Mikula to the maximum allowed under sentencing guidelines.

Upon completing his prison term, Mikula, who is in his early 70s, will spend seven months under home confinement and serve one year of supervised release. He also was fined $1,000.

FDA's investigation of the prescription drug diversion scheme continues.

--Paula Kurtzweil

Correction

FDA Consumer magazine (July-August 1997)