Home Kansas City Press Releases 2012 Indictment: Kidney Dialysis Patients Received Misbranded Drugs

Indictment: Kidney Dialysis Patients Received Misbranded Drugs

U.S. Attorney’s Office November 14, 2012
  • District of Kansas (316) 269-6481

TOPEKA, KS—A Tennessee pharmacist is charged with substituting a cheaper drug imported from China for the iron sucrose that the Federal Drug Administration has approved for kidney dialysis patients, U.S. Attorney Barry Grissom said today.

Robert Harshbarger, Jr., 53, Kingsport, Tennessee, doing business as American Inhalation Medication Specialists Inc., is charged with one count of selling misbranded drugs, one count of mail fraud, and five counts of health care fraud.

The indictment alleges that as a result of fraud by Harshbarger kidney dialysis, patients treated by Kansas Dialysis Services LC received iron sucrose that had not been certified by the FDA to meet quality and safety standards.

“Although there are no reports of patient harm associated with the drugs that are alleged to be misbranded in this indictment, patient health was put at risk,” said U.S. Attorney Barry Grissom. “The FDA cannot assure the safety and effectiveness of products that are not FDA-approved and come from unknown sources and foreign locations or that may not have been manufactured under proper conditions. These unknowns put patients’ health at risk because of uncertainty concerning the product’s content, purity, and source.”

Grissom said there is no reason for current or former patients of Kansas Dialysis to be concerned at this time. The events outlined in the indictment ended in 2009. Any significant iron deficiencies would have been addressed during the course of a patient’s dialysis treatments. Nevertheless, any questions should be addressed to a physician, Grissom said.

The indictment alleges that Harhbarger’s company, American Inhalation Medication Specialists Inc., of Kingsport, Tennessee, received more than $875,000 from Kansas Dialysis and more than $845,000 from health care benefit programs including Medicare and Medicaid for misbranded iron sucrose sold from 2004 to 2009. Harshbarger misrepresented the iron sucrose drug as Venofer, which is the only iron sucrose drug approved by the FDA for both pre-dialysis and post-dialysis patients.

Harshbarger purchased iron sucrose from Chinese companies including Qingdao Shenbang Chemical Company in Qingdao, China, and Shanghai Rory Fine Chemicals Co. Ltd. in Shanghai, China. The iron sucrose from China was cheaper than purchasing Venofer.

If convicted, Harshbarger faces a maximum penalty of 20 years in federal prison and a fine up to $250,000 on the mail fraud count; a maximum penalty of 10 years and a fine up to $250,000 on each of the health care fraud counts; and a maximum penalty of three years and a fine up to $250,000 on the charge of selling a misbranded drug. The Food and Drug Administration and the Department of Health and Human Services-Office of Inspector General investigated. Assistant U.S. Attorney Tanya Treadway is prosecuting.

Other Indictments

Two men who were executives of the Brooke Companies, a now defunct insurance franchising business in Kansas, have been indicted on federal financial fraud charges.

Robert D. Orr, 59, Denver, Colorado, and Leland G. Orr, 50, Phillipsburg, Kansas, are charged with one count of conspiracy to defraud the Securities and Exchange Commission and three counts of making false statements in filings to the SEC. In addition, Robert Orr is charged with two more counts of making false statements in SEC filings and one count of bankruptcy fraud.

The Orrs were executives of Brooke Corporation, a holding company headquartered in Overland Park and Phillipsburg, Kansas, that was engaged primarily in insurance franchising, insurance agency financing, and banking. Brook Corporation owned a majority interest in Brooke Capital, Aleritas, and Brooke’s Savings Bank. Brooke Capital sold insurance agency franchises and provided bookkeeping and other support services for franchises. Aleritas sold the majority of loans it made to franchisees and typically remained responsible for loan servicing. The companies were known collectively as the Brooke Companies.

The indictment alleges that in 2007 and 2008 the Brooke Companies experienced increasingly dire liquidity conditions and rapidly declining franchise financial health. In attempting to conceal financial problems, Brooke Companies’ management misrepresented the number of viable franchises, the health of Aleritas’ loan portfolio, and other material financial information to the SEC, investors, and lenders. They conspired to present a false aggregate picture of the Brooke Companies’ financial condition and thereby to obtain money, dividend payments, and cash transfers for themselves.

If convicted, they face a maximum penalty of 20 years in federal prison and a fine up to $5 million on each count of making a false statement in SEC filings; and a maximum of five years and a fine up to $250,000 on each of the other counts. The FBI investigated. Assistant U.S. Attorney Mike Warner is prosecuting.

Bryan K. Carter, 32, Topeka, Kansas, is charged with unlawful possession of a firearm after a felony conviction. The crime is alleged to have occurred December 13, 2011, in Shawnee County, Kansas.

If convicted, he faces a maximum penalty 10 years and a fine up to $250,000. The Bureau of Alcohol, Tobacco, Firearms, and Explosives investigated. Assistant U.S. Attorney Duston Slinkard is prosecuting.

Omar Romero Salgado, 18, currently in custody in the Shawnee County Jail, is charged with one count of possession with intent to distribute methamphetamine, one count of possession with intent to distribute Clonazepam, one count of possession of a firearm in furtherance of drug trafficking, and one count of possession of a stolen firearm. The crimes are alleged to have occurred October 30, 2012, in Shawnee County, Kansas.

If convicted, he faces a maximum penalty of 20 years and a fine up to $1 million on the methamphetamine charge; a maximum penalty of five years and a fine up to $250,000 on the Clonazepam charge; a penalty of not less than five years and a fine up to $250,000 on the charge of possessing a firearm in furtherance of drug trafficking; and a maximum penalty of 10 years and a fine up to $250,000 on the charge of possession of a stolen firearm. The FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.

Xavier Patrick McCullough, 24, currently in custody in the Shawnee County Jail, and Ryan Cole Palmer, 25, currently in custody in the Shawnee County Jail, are charged with one count of possession with intent to distribute marijuana, one count of possession with intent to distribute methamphetamine, and one count of possession of a firearm in furtherance of drug trafficking.

If convicted, they face a maximum penalty of 20 years and a fine up to $1 million on the methamphetamine charge; not less than five years and a fine up to $250,000 on the firearm charge; and a maximum penalty of five years and a fine up to $250,000 on the marijuana charge. The Topeka Police Department and the FBI investigated. Assistant U.S. Attorney Jared Maag is prosecuting.

In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.

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