A Manhattan federal appeals court has reversed the 2015 conviction of a Long Island man for distributing unapproved and misbranded drugs from abroad, ruling that he didn’t get a fair chance to present evidence to jurors that he was relying in good faith on advice from his lawyers.
William Scully, 48, of Commack, president of Pharmalogical Inc. of Great Neck, was sentenced to 5 years in prison last year for importing from overseas and selling items including Botox, cancer drugs and intrauterine devices from 2009 to 2013 without U.S. Food and Drug Administration approval.
A Second U.S. Circuit Court of Appeals three-judge panel said Scully was entitled to a new trial because U.S. District Judge Arthur Spatt in Central Islip improperly struck and excluded his testimony that one of his lawyers told him “the business was completely legal” during his trial.
“Scully’s defense was that he relied on the advice of counsel in operating his business and therefore lacked the requisite fraudulent intent,” the panel said. “. . . It was for the jury to determine whether that testimony was credible and raised a reasonable doubt about Scully’s guilt.”
Scully was charged in 2014 with wire fraud, conspiracy and other charges for allegedly importing $17 million in drugs manufactured abroad from Europe, Canada and Turkey that had not been approved for resale in the United States, and making claims that they were approved by the FDA.
At trial in Central Islip, the Second Circuit said, Scully was allowed to call to the stand one lawyer who advised him, but the government “effectively undermined” that lawyer’s testimony by questioning his experience and suggesting that Scully had given him false information.
When Scully took the stand and testified about what a second lawyer, who was not called as a witness, had advised him, Spatt incorrectly excluded the testimony, calling it hearsay and saying it was too prejudicial to the government without the lawyer himself appearing, the appeals court said.
The appeals panel said Scully should have been permitted to testify even if he was “one-sided and self-serving.”
Scott Resnik, Scully’s attorney, said the ruling could have a “tremendously significant” impact on any retrial.
“It gives him the opportunity to have all the advice he received about the lawfulness of his business model heard by the jury,” Resnik said. “. . . When the jury did not hear that, it undermined his ability to defend himself.”
The Second Circuit decision was issued last week. Resnik said Scully was released from prison on Friday.
The government has asked the Second Circuit to give it until Jan. 27 to decide whether to seek a rehearing of the appeal.
A spokesman for acting U.S. Attorney Bridget Rohde declined to comment on plans to retry the case. At a hearing Tuesday, Spatt set April 10 for any potential retrial.