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Former Drug Company Manager Pleads Guilty To Stealing, Reselling Thousands Of Bottles Of Adequan

The U.S. Attorney for the Eastern District of New York released the following statement Friday, Dec. 4 about a guilty plea entered by Gregory Settino, 58, of Bethpage, N.Y.:

Earlier today, at the federal courthouse in Central Islip, New York, Gregory Settino pleaded guilty to theft of medical products from his employer, a drug manufacturer in Suffolk County. When sentenced, Settino faces up to 20 years in prison, restitution to his former employer and a fine of up to $250,000. Today's proceeding took place before United States District Judge Joanna Seybert.

Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and Jeffrey Ebersole, Special Agent-in-Charge, Food and Drug Administration, Office of Criminal Investigations, New York Field Office (FDA-OCI), announced the guilty plea.

“With today's guilty plea, Settino has been held accountable for stealing from his then-employer thousands of bottles of an injectable drug administered to horses, which he resold to trainers and vets potentially endangering the health of horses at New York racetracks because the stolen drugs were not handled properly,” stated Acting United States Attorney DuCharme. “This Office will vigorously prosecute those who jeopardized drug safety.”

“The FDA works to ensure that veterinary drugs are safe and effective so that animals remain healthy. When drugs are taken out of the legitimate supply chain, there is no longer any assurance that they are safe or effective,” stated FDA-OCI Special Agent-in-Charge Ebersole. “The FDA remains committed to investigating and bringing to justice those who endanger the health of animals.”

As set forth in court filings and facts admitted in court, Settino was the production supervisor of manufacturing at Luitpold Pharmaceuticals, Inc. in Shirley, New York. In January 2019, Luitpold was renamed American Regent. One of the products manufactured at Luitpold and American Regent was Adequan, an injectable equine drug administered to horses with degenerative joint disease and sold throughout the United States. Between 2012 and January 2020, Settino stole thousands of bottles of Adequan from Luitpold and American Regent valued at over $1 million and sold those drugs to horse trainers and veterinarians at New York racetracks, including Belmont Park, for more than $600,000. Settino's conduct potentially endangered the health of horses because the drugs were not maintained, stored or transported in accordance with proper procedures for ensuring the safety, effectiveness and efficacy of the drugs. At times, Settino transported the drugs in shoeboxes stored in his car. At all times, the drugs were handled in violation of the FDA regulated supply chain.

The government's case is being handled by the Office's Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution.

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Kentucky Pharmacy, Owner Plead Guilty In Federal Charges Over Illegal Drug Distribution

Tailor Made Compounding, LLC and its founder, Jeremy Delk, pleaded guilty this week to federal charges of unlawful drug distribution, according to a press release from the U.S. Attorney's Office for the Eastern District of Kentucky. Tailor Made entered a guilty plea to one count of distributing unapproved new drugs in the United States between October 2018 and April 2020. Those drugs were selective androgen receptor modulators, more commonly known as SARMs, which are designed to mimic the effects of anabolic steroids. Tailor Made admitted to distributing a series of substances, including BPC 157, Cerebrolysin, CJC 1295, DSIP, Epitalon, GW 501516, Ipamorelin, LGD-4033, LL-37, Melanotan II, MK 677, PEG-MGF, Selank, and Semax. The pharmacy will forfeit the value of its 2019 sales of those products, which totals $1,788,906.82.

SARMs are best known as performance-enhancing drugs in human sport, but have also made their way into the horse racing world, as evidenced by a case from Quarter Horse racing earlier this year.

Delk, 40, entered a guilty plea for unlawfully distributing prescription drugs as a wholesaler despite Tailor Made not being licensed to operate as a wholesaler. According to federal prosecutors, he oversaw Tailor Made's distribution of methylcobalimin, or B-12, to physicians in California and Maryland. Prosecutors also say he tried to hide records of those and other sales when Tailor Made was visited by federal and state pharmacy inspectors in 2018.

Sentencing in the case will take place Feb. 24, 2021. Delk could face up to 10 years in prison and a fine of up to $250,000.

Tailor Made Compounding is not affiliated in any way with Taylor Made Farm or Taylor Made Sales Agency, also located in Nicholasville, Ky.

In March of this year, the FBI confirmed judicially-authorized activity at 200 Moore Drive in Nicholasville, the address of Tailor Made Compounding. That activity took place on the same day as the arrests of several trainers, veterinarians, and others on charges of drug adulteration and misbranding. In a statement provided to the Paulick Report later that week, a representative of Tailor Made stated federal authorities questioned Tailor Made employees in connection with “a highly publicized equine investigation in New York involving MediVet Equine.”

MediVet was the producer of SGF-1000, one of the substances referenced by indicted trainer Jason Servis in telephone conversations recorded by the FBI.

Read more about the marketing of SGF-1000 in this report from March 2020.

Tailor Made maintained that it “has no business affiliation whatsoever with MediVet Equine” and “is a separate business altogether which does not compound veterinary medication.”

Until the week of the arrests, MediVet Equine's website said it was located at 200 Moore Drive, and that it was “continuing research and development in partnership with Tailor Made Compounding.”

According to the Kentucky Secretary of State, MediVet Equine Associates LLC (one of several entities using the MediVet name in Kentucky) was then registered to a Michael Kegley, with Kristian S. Rhein as a member. Michael Kegley Jr. and Rhein were among the 27 indicted by the U.S. Attorney for the Southern District of New York in connection with a doping ring.

Besides their address, MediVet and Tailor Made did share something else — an important associate in Jeremy Delk. On his LinkedIn page, Delk lists himself as CEO of Tailor Made Compounding from December 2014 to the present and founder of MediVet Biologics from January 2008 to present. The registered agent for MediVet Biologics changed from Delk to Thomas Masterson in May 2019, according to a filing with the Kentucky Secretary of State.

Delk appeared on MediVet Equine's archived website as co-founder of the company alongside Michael Kegley Sr. Michael Kegley Jr. was listed as director of sales for MediVet Equine. That page vanished during the week of the arrests in connection with the Navarro/Servis indictments (which included Kegley Jr.) and the FBI's appearance at Tailor Made. As of this week, MediVet Biologics is listed under the heading “investments and portfolio companies” on the Delk Enterprises website.

Delk's biography on his LinkedIn page reads in part: “In addition to his businesses, Mr. Delk's other passion is horses and animals. Mr. Delk's family has owned race horses for more than four decades. In 1978 his grandfather's horse, Special Honor, competed in the Kentucky Derby against Affirmed and Alydar. Mr. Delk learned of MediVet Pty in 2008 when a trainer had remarkable success using some of the companies product ranges on one of Mr. Delk's racehorses. So impressed with the product and after further research formed a partnership with the principles of MediVet Pty, Ltd. to offer the company's leading edge all natural therapeutic products in North America.

Today, Delk Enterprises has crossed over into a more focused approach in human health care including OTC consumer products, small molecule drug development, peptides, and orthobiologics.”

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Former Drug Company Employee Indicted On Federal Charges After Allegedly Stealing Thousands Of Bottles Of Joint Medication

An indictment was unsealed today in federal court in Central Islip charging Gregory Settino with theft of medical products and making a false statement to a federal agent. Settino was arrested today and arraigned this afternoon via teleconference before United States Magistrate Judge Arlene R. Lindsay. Settino was released on a $250,000 bond.

“As alleged, Settino abused his supervisory position at a pharmaceuticals company to steal large quantities of equine drugs in order to enrich himself and without regard for how his sale of the medical products could potentially endanger the health of horses,” stated Acting United States Attorney DuCharme. “The defendant then allegedly compounded his criminal conduct by lying to an FDA Special Agent to minimize the scope of his thefts. Thanks to the combined efforts of the U.S. Attorney's Office and the FDA, this illicit pipeline of stolen drugs to vets and horse trainers has been shut down.”

“The safety and effectiveness of veterinary drugs play a key role in maintaining the health of animals. When these drugs leave the legitimate supply chain, they can lose their effectiveness or become unsafe,” stated FDA-OCI Special Agent-in-Charge Ebersole. “We will continue to investigate and bring to justice those who endanger the health of animals.”

As set forth in court filings, Settino was the production supervisor of manufacturing at Luitpold Pharmaceuticals, Inc. in Shirley, New York. In January 2019, Luitpold was renamed American Regent. One of the products manufactured at Luitpold and American Regent was Adequan, an injectable equine drug administered to horses with degenerative joint disease and sold throughout the United States. Between 2012 and January 2020, Settino allegedly stole thousands of bottles of Adequan from Luitpold and American Regent valued at over $1 million, and sold those drugs to horse trainers and veterinarians at New York racetracks, including Belmont Park, for more than $600,000. Settino's conduct endangered the health of horses because the drugs were not maintained, stored or transported in accordance with proper procedures for ensuring the safety, effectiveness and efficacy of the drugs. At times, Settino transported the drugs in shoeboxes stored in his car. At all times, the drugs were handled in violation of the FDA regulated supply chain.

On January 23, 2020, Settino was interviewed by an FDA Special Agent and allegedly falsely stated that he had stolen fewer than 100 bottles of Adequan from Luitpold and American Regent.

The charges in the indictment are allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, Settino faces up to 25 years in prison.

The government's case is being handled by the Office's Long Island Criminal Division. Assistant United States Attorney Charles P. Kelly is in charge of the prosecution.

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