Biggest drug research fraud case in FDA history - Food and Drug Administration

Custom Feed Blenders made and distributed drugs for sale to veterinarians, farm supply outlets, and farmers throughout the nation, according to the Justice Department. Engel and the company were linked to the illegal operation in 1984 along with 13 others. They were charged with working together--or, in some cases, separately--to import, manufacture or sell high-potency, unapproved bulk animal drugs, and with making false statements to federal agents.

Others pleading guilty in the case were Rex J. Blunk of Callender, Iowa; Gary Van Dusen of Mississauga, Ontario, Canada; Jon L. Engel of Omaha, Neb., brother of Jeffrey Engel; Timothy J. Hoffman of Omaha; Bradley Langmo and Gregory S. Langmo of Litchfield, Minn.; Ronald L. Nissen of Fort Dodge; James Rhodes of Fort Dodge; Wesley J. Thoreson of Ellsworth, Iowa; Larry Tipton of Winona, Minn.; and Dana Wolf of Fort Calhoun, Neb. As of April 1, Hoffman had been fined $9,000, Thoreson $2,500, and Wolf $4,500. At press time, the others, along with Jeffrey Engel, were awaiting sentencing.

In addition, Heinz G. Dall of Ossining, N.Y., and Robert M. Clack of Pittsfield, III., were charged with 25 counts of illegally importing and distributing animal drugs. They pleaded not guilty after being indicted last November by a federal grand jury in Cedar Rapids, Iowa, and are awaiting trial.

Two businesses dealing in the smuggled veterinary medicines--International Manufacturing and Sales of Omaha, Neb., and Zetapharm Corp., New York--were charged with misbranding and adulteration of animal drugs since the drugs were made under conditions that presented no assurance as to their safety or strength. International Manufacturing has been fined $40,000. Fines of up to $100,000 to $250,000 per count are possible.

The unapproved animal drugs included amprodlium, carbadox, chloramphenicol, chlortetracycline, dimetridazole, ipronidazole, levamisole, nitrofurazone, oxytetracycline, potassium penicillin, rifampin, spectinomycin, tetracycline hydrochloride, tylosin, and other antibiotics. Unapproved drugs pose a threat to an animal's health because their safety and effectiveness have not been scientifically, determined. They may also endanger humans if they leave cancer-causing or otherwise toxic drug residues in meat, milk or eggs from feed animals.

The nationwide investigation is continuing, with more charges expected.

Blood Bank Put on Notice

The American Red Cross Blood Services Center in Albany, N.Y., almost lost its FDA license last March because of continuing problems that led to the release of more than 300 units of potentially contaminated blood--most of which were transfused. The most critical problem was that hepatitis testing was done incorrectly for nearly five months because the center's employees had failed to recognize an inappropriate computer setting. To date, retesting of the 112 donors who gave the blood in question has not shown any hepatitis contamination.

Numerous problems with the Red Cross regional blood banking operations over the past several months had prompted FDA to step up its inspections of the centers. Indeed, in 1988, the agency visited every FDA-regulated blood bank. During the Albany center inspection, from May 2 to June 6, an investigator from FDA's Buffalo district found a number of deficiencies--notably, the distribution of blood components from five units that hadn't been properly tested for AIDS (acquired immune deficiency syndrome) virus antibodies. The donors are being retested and, so far, all tests have been negative.