Carla & Douglas Conigliaro Sentenced in NECC Cash-Out Scheme

BOSTON — Carla Conigliaro, 53, of Dedham, Mass., the majority owner of the disgraced New England Compounding Center (NECC), and her husband, Douglas Conigliaro, 55, also of Dedham, were sentenced today for a calculated cash-withdrawal scheme meant to hide assets in the wake of a deadly fungal meningitis outbreak. The pair admitted to siphoning $124,000 in cash from personal bank accounts in deliberate increments under $10,000 to evade federal reporting requirements—a move prosecutors call a textbook case of financial structuring.

U.S. District Court Judge Richard G. Stearns handed down a one-year probation sentence to Carla Conigliaro, ordering her to forfeit $4,600 and pay a $4,500 fine. Douglas Conigliaro received a harsher penalty—two years of probation, forfeiture of $119,647, and a $55,000 fine—for his role in the scheme. The transactions began Oct. 31, 2012, the same day federal agents raided NECC’s Framingham facility, signaling the collapse of a company whose contaminated steroid injections sparked a nationwide health crisis.

The 2012 outbreak of fungal meningitis was traced directly to vials of preservative-free methylprednisolone acetate (MPA) manufactured by NECC. The contaminated medication was shipped to clinics across 20 states, ultimately sickening over 750 people and killing 64. As federal investigators closed in, the Conigliaros initiated a flurry of cash withdrawals from their personal accounts—structured precisely to avoid triggering a Currency Transaction Report, a red flag in any financial crime probe.

Though not charged with running NECC’s day-to-day operations, the Conigliaros were indicted in December 2014 alongside 12 other employees and associates for post-outbreak asset transfers. The indictment made clear: they weren’t accused of producing the tainted drugs, but of trying to shield their money when the hammer began to fall. Their July 2016 guilty pleas to structuring charges confirmed their awareness of the paper trail—and their intent to erase it.

Meanwhile, NECC’s operational leaders face far more severe consequences. Barry J. Cadden, the company’s owner and head pharmacist, and supervisory pharmacist Glenn A. Chin are set to stand trial Jan. 5, 2017, on 25 counts of racketeering tied to second-degree murder across seven states. Ten other defendants, including pharmacists, sales directors, and an unlicensed technician, face charges ranging from mail fraud to violations of the Food, Drug and Cosmetic Act.

The case was jointly announced by U.S. Attorney Carmen M. Ortiz and federal agents from the FDA, FBI, Department of Veterans Affairs, Department of Defense, and U.S. Postal Inspection Service. Prosecution was led by Assistant U.S. Attorneys George P. Varghese, Amanda P.M. Strachan, and John W.M. Claud. As this chapter closes for the Conigliaros, the broader NECC prosecution looms as one of the most significant healthcare fraud and public safety cases in modern federal history. The defendants remain presumed innocent unless proven guilty beyond a reasonable doubt.