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Commack man gets 5 years for distributing unapproved drugs

William Scully, the president of Pharmalogical Inc. of

William Scully, the president of Pharmalogical Inc. of Great Neck, leaves federal court in Central Islip on April 8, 2016. Scully, who last year was convicted of distributing millions of dollars' worth of unapproved drugs for treating illnesses such as cancer and Crohn's disease, was sentenced to 5 years in prison on Thursday, June 2, 2016. Credit: James Carbone

A Commack man was sentenced to 5 years in prison Thursday for leading a multimillion-dollar fraud that involved selling unapproved drugs for treatment of cancer and other diseases.

U.S. District Judge Arthur D. Spatt in Central Islip said the scheme “completely undermines” the Food and Drug Administration’s efforts to protect the public.

Before imposing the sentence, Spatt told William Scully, 47, that he committed a “serious crime ... that could have been very deadly, but fortunately was not.”

Scully’s company imported the drugs and sold them to clinics and doctors, falsely assuring them they were FDA-approved. The drugs were then prescribed to unsuspecting patients, federal prosecutors said.

Scully ran the scheme from 2009 to 2013 as president of Pharmalogical Inc. of Great Neck, also known as Medical Device King, authorities said.

During that period, the company sold more than $17 million in medical devices and pharmaceutical drugs, including drugs manufactured overseas and imported but not approved in the United States. Some drugs had labels only in foreign languages without instructions for use in English, prosecutors said.

The drugs came from countries such as Turkey and the Cayman Islands, according to prosecutors.

Scully and former Pharmalogical Inc. vice president Shahrad Rodi Lameh were arrested by FDA agents in May 2014.

In November, a jury convicted Scully of 66 felony counts, including distribution of unapproved drugs, conspiracy and fraud.

Spatt dismissed additional charges alleging selling of counterfeit drugs prior to the jury’s deliberations.

“I never started this business to deceive or trick anybody,” Scully said in court Thursday.

He asked the judge for leniency on behalf of his wife and three children — a 16-year-old son, 13-year-old daughter and 10-year-old daughter.

“The thought of being separated from my children is unbearable. They are all I live for,” he said.

His wife Suzanne, one of about three dozen supporters in the courtroom, tearfully told Spatt that her husband was “an honest man.”

“I will stand by your side forever because of the man you are, and the man I’ve known for 27 years,” she told her husband.

Scully’s attorney, Scott A. Resnik of Manhattan, recommended no jail time. He described his client as a devoted father and entrepreneur, who “grew up with the utmost respect for the law and the virtues of hard work.”

“Mr. Scully was advised that his business model was lawful from the very beginning” by the company’s legal counsel, Resnik said.

But Assistant U.S. Attorney Charles P. Kelly said Scully “engaged in fraud after fraud, told lie after lie” to doctors about where the drugs came from and whether they were approved for use in this country.

Spatt said the prison sentence is intended to “send a word out: Don’t do these things. You’re going to be punished for it.”

After the FDA searched Scully’s offices and seized his inventory, prosecutors said he continued to sell illegal drugs through a new company, Taranis.

Scully, who was ordered to repay close to $900,000 in restitution, is to begin serving his prison term on Oct. 4.

Lameh earlier pleaded guilty to conspiracy to commit wire fraud and distribute misbranded drugs, officials said. Sentencing is scheduled for Sept. 30.

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