GRAND RAPIDS, MI – Former Kentwood Pharmacy CEO Kim Mulder was sentenced Thursday, Aug. 27, to 10 years in prison, the maximum penalty possible for a drug-repackaging scheme.
Mulder, 56, formerly of East Grand Rapids, was sentenced by U.S. District Judge Robert Jonker, who indicated a preliminary intention to set restitution at $8 million. Mulder will serve three years on supervised release when his prison term ends.
Mulder was taken into custody after the hearing to begin serving his sentence.
Mulder pleaded guilty to conspiracy to commit healthcare fraud based on his company's billing of Medicare, Medicaid and private insurance companies for misbranded and adulterated drugs. Kentwood Pharmacy repackaged and sold drugs returned from nursing homes and adult foster homes that were supposed to be disposed.
Mulder downplayed his role in the scheme.
In an investigation prompted by confidential tips, the U.S. Drug Enforcement Administration raided Kentwood Pharmacy on Nov. 2, 2010.
In all, 18 workers were convicted of crimes, including felony convictions for six pharmacists.
Richard Clarke, the former vice president of sales, was sentenced to 14 years in prison for healthcare fraud and an unrelated charge of possession of child pornography. Chief pharmacist Lawrence Harden was sentenced to six years.
Assistant U.S. Attorney Raymond Beckering III said the repackaging of returned drugs resulted in cross-contamination, improper labeling and the placement of different drugs into stock bottles. Former workers testified Thursday that lot numbers were made up, which made it impossible to know if drugs had expired or been subject to recall.
Former workers testified they spent their entire work weeks sorting drugs to be repackaged and resold.
Jonker determined that public and private insurances paid $79 million for adulterated and misbranded drugs that were provided by Kentwood Pharmacy to patients at more than 800 nursing and foster homes from 2006 to 2010.
Mulder started the pharmacy in 2001. He licensed it in his wife's name. She had nothing to do with the pharmacy.
Jonker said the pharmacy was "conceived in fraud," and that Mulder created a culture of chaos that resulted in real dangers for patients.
"This was fraud, pure and simple, from the top," Jonker said.
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."
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on August 27, 2015 at 5:59 PM, updated August 28, 2015 at 10:31 AM