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         Generic Drug Maker Obstructs Justice
              
WASHINGTON, D.C.--Frederick Shainfeld, a former senior vice-president of
Halsey Drug Company Inc., has been sentenced to 18 months imprisonment
and fined $5,000 for obstructing a U.S. Food and Drug Administration
inspection of the company, the Department of Justice announced today.
Halsey, based in Brooklyn, New York, manufactures generic drugs.
  
Lynne A. Battaglia, U.S. Attorney in Baltimore, and Frank W. Hunger,
Assistant Attorney General in charge of the Civil Division, said the
sentencing Friday by Judge Herbert N. Maletz of U.S. District Court in
Baltimore resulted from the government's continuing investigation of the
generic drug industry.  Shainfeld, who was in charge of Halsey's
Technical and Regulatory Affairs section, pleaded guilty on May 4, 1994.

Shainfeld and four other Halsey executives were indicted July 12, 1993,
on charges of conspiracy to impede FDA's regulatory function, interstate
distribution of adulterated and unapproved new drugs, making false
statements to the FDA and obstruction of an FDA inspection.

Shainfeld admitted he and others created and gave to FDA inspectors
records that fraudulently misrepresented certain research and
development batch sizes the FDA required to ensure that a company can in
fact manufacture production quantities of a drug according to the
approved formula.

Halsey made smaller batches, then falsely claimed they were the required
size.  When the FDA investigated, Shainfeld and others, including former
president and chief executive officer Jay Marcus, ordered employees to
create false inventory records to hide the fact that Halsey had
insufficient raw materials to make the batches in the size they
represented.

In addition, evidence at the trial of Hedviga Herman, Halsey's former
vice-president of manufacturing, showed that Halsey added unapproved
ingredients to certain drugs and falsified records to cover up those
additions.  The drugs included quinidine gluconate, which is used to
treat heart arrhythmias; metronidazole, used to treat serious
infections; and propylthiouracil, used to treat hyperthyroidism.
Shainfeld and Marcus sanctioned the falsifications.  Herman was
convicted June 2 and sentenced to 18 months' imprisonment on September
23, 1994.

Halsey pleaded guilty July 16, 1993, to five felony counts of
adulterating a heart medication, quinidine gluconate in 324 milligram
tablets, and was fined $2.5 million.  Marcus also pleaded guilty and was
sentenced to 41 months imprisonment on October 24, 1994.

The case arose out of a joint investigation conducted by the FDA
Special Prosecution Staff in Baltimore and agents of the FBI in Silver
Spring.  Battaglia expressed particular thanks to the FBI for a
successful undercover investigation.

The investigation of the generic drug industry by the U.S. Attorney's
office, the Department's Office of Consumer Litigation and the FDA is
continuing.  To date, more than 50 individuals and 14 companies have
pleaded to, or been found guilty of, fraud or corruption.

[Generic Drug Executive Sentenced to 18 Months Fined $5,000, DOJ,
1/9/95]

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