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Post date: June 9 1999

State Shuts Down Multi-million Dollar Drug Diversion Scheme, Case Leads To Better Security Measures At Local Hospitals

Attorney General Spitzer announced today the last of five convictions in a drug diversion scheme that cost taxpayers millions of dollars. The scheme involved the theft of high-priced drugs from two Syracuse hospitals in order to sell them to local pharmacists, doctors and a wholesaler for a profit.

"The investigations and prosecutions carried out by my Medicaid Fraud Control Unit not only resulted in the felony conviction of five individuals, it has also helped change the way hospitals keep track of their medications," said Spitzer. "Increased security measures have been implemented at the two hospitals as a result of the evidence brought forth in this case."

This week, Edgar Stevens was sentenced by Onondaga County Court Judge John Brunetti to 20 days in jail after having paid restitution of $104,000 to the Health Science Center and having provided assistance leading to the conviction of four others involved in the scheme. Stevens was also sentenced in Syracuse City Court to 20 days in jail on a related tax conviction, after having paid restitution of $78,172 to the New York State Department of Taxation and Finance.

A total of five individuals were convicted of felonies for their role in the eight-year scheme during which some three million dollars worth of drugs were stolen from two Syracuse hospitals C the SUNY Health Science Center and Crouse Hospital.

The Attorney General obtained monetary judgments totaling about $1.6 million; $497,000 has been collected from the defendants to date.

The thefts went undetected from 1988 to 1995. Edgar Stevens and Angelo Emmi, both employed in the pharmacy department of SUNY Health Science Center stole expensive cancer medications and then sold them to two pharmacies, a physicians' group, and a Florida wholesaling company.

Laurie DeCarlo, a pharmacy buyer from Crouse Hospital stole drugs from that facility, and through her husband Richard, sold them to Edgar Stevens. Thomas Fetcho, an owner of the former Ryan Drug Co. of Syracuse, was convicted of drug diversion because of his purchase of stolen drugs from Stevens.

The Attorney General's office thanked the Onondaga County Sheriff's Department, the SUNY Health Science Center and Crouse Hospital for their assistance in these cases.

The case was handled by Special Assistant Attorney General Norman Hatt of Spitzer's Syracuse Regional Office. All Medicaid Fraud cases are filed under the supervision of Deputy Attorney General Jose Maldonado.

The five individuals convicted in this case are:

  • Angelo Emmi - Associate Director of the Department of Pharmacy at the SUNY Health Science Center.

    Charged: Grand Larceny, 1st Degree and Criminal Diversion of Prescription Medications and Prescriptions, 2nd Degree.
    Plea: Grand Larceny, 1st Degree and Criminal Diversion of Prescription Medications and Prescriptions, 2nd Degree.
    Sentence: Serving 4-12 years in State Prison
    Restitution ordered: $1,369,696.80
    Restitution paid: Approximately $100,000 has been realized from the sale of Emmi's assets.
  • Edgar Stevens - Staff pharmacist at the SUNY Health Science Center and Former owner of North Syracuse Pharmacy.

    Charged: Grand Larceny 2nd Degree.
    Plea: Grand Larceny 4th Degree.
    Sentence: 20 days of incarceration and 3 year conditional discharge
    Restitution paid: $104,000

    Charged: Filing a False Tax Return
    Plea: Filing a False Tax Return
    Sentence: 20 days (Concurrent with above sentence.)
    Restitution paid: $78,172
  • Richard DeCarlo II - Former employee of Angelo Emmi.

    Charge: Criminal Possession of Stolen Property, 2nd Degree and
    Criminal Diversion of Prescription Medications and
    Prescriptions, 1st Degree.
    Plea: Criminal Diversion of Prescription
    Medications and Prescriptions, 2nd Degree.
    Sentence: 90 days jail, 5 years probation.
    Restitution: Executed monetary judgement for $200,000
    Restitution paid: $50,000

    Charge: Filing False Tax Return
    Plea: Filing False Tax Return
    Sentence: 1 year Conditional Discharge
    Restitution: Executed monetary judgement for $13,793
    Restitution paid: pending
  • Laurie DeCarlo - Pharmacy Buyer at Crouse Hospital.

    Charge: Grand Larceny, 2nd Degree and Criminal Diversion of Prescription Medications and Prescriptions, 1st Degree.
    Plea: Grand Larceny in the Third Degree.
    Sentence: 45 days jail, 5 years probation and 750 hours community service.
    Restitution: Executed monetary judgment for $200,000
    Restitution paid: $50,000

    Charge: Filing False Tax Return
    Plea: Filing False Return
    Sentence: 1 year Conditional Discharge
    Restitution: Executed monetary judgement for $13,793
    Restitution paid: pending
  • Thomas Fetcho - Pharmacist and co-owner of Ryan Drug.

    Charged: Criminal Possession of Stolen Property, 1st Degree,
    Criminal Diversion of Prescription Medications and
    Prescriptions, 1st Degree, and Grand Larceny, 2nd Degree.
    Plea: Criminal Diversion of Prescription Medications and Prescriptions, 4th Degree.
    Sentence: Conditional Discharge
    Restitution paid: $225,000.