Mass. Company Pays Hefty Penalty After Admitting to Violating the FDC Act and to Obstructing an Administrative Proceeding

On December 21, 2007, the United States Attorney’s Office for the District of Massachusetts announced that pursuant to a plea agreement reached on October 30, 2007, under Federal Rule of Criminal Procedure 11(c)(1)(C), under which the parties can agree to the particular sentence imposed (subject to court approval), Bryan Corporation pled guilty to misdemeanor violations of the federal Food, Drug, and Cosmetic Act (“FDC Act”) under 21 U.S.C. § 333(a)(1), and to obstruction of an administrative proceeding under 18 U.S.C. § 1505. 

Bryan Corporation agreed to pay a criminal fine of $4,514,700.  In addition, pursuant to a civil settlement agreement, the company agreed to pay $485,300 to resolve potential liability under the civil federal False Claims Act.  A copy of the plea agreement is available here.  In light of the small size of the company and its small sales figures, the penalty imposed was relatively large compared to settlements with larger companies. 

The criminal FDC Act conduct admitted by Bryan Corporation related to an interstate shipment of misbranded drug product and adulterated devices.  The criminal obstruction conduct related to the creation of false records regarding those drugs and devices during an FDA inspection, as well as hiding other documents and moving drugs and devices to avoid inspection.  The civil allegations focused on the lack of drug approval or device clearance and nonconformance with current good manufacturing practices.

Bryan Corporation’s owner and former president was indicted on July 19, 2007 on felony FDC Act charges, obstruction, mail fraud, and criminal conspiracy.  That case remains pending.

By J.P. Ellison