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Pharmacy Network, DEA Settle Claims

March 23, 2000

INDIANAPOLIS (AP) _ A company supplying drugs to nursing homes will pay at least $6.35 million to settle a federal complaint over shoddy record-keeping that allowed an employee to steal prescription tranquilizers and painkillers for street sales, federal officials said Wednesday.

The settlement is the largest that the Drug Enforcement Administration has reached involving mishandling of federally controlled drugs, said acting U.S. Attorney Tim Morrison.

NCS HealthCare of Indiana Inc. will pay the federal government $4.1 million to settle civil claims and spend $2.25 million to improve its compliance with federal rules on narcotics.

The settlement came more than three years after the NCS employee, Shirley Newsom, and her boyfriend, Chad Sloan, were murdered by two men involved in a scheme to sell stolen Valium and Vicodin pills intended for nursing home residents.

The company was accused of violating provisions of the Controlled Substances Act, which requires companies handling pharmaceuticals to keep records that account for all drugs when they are received, stored and distributed.

NCS HealthCare did not admit any wrongdoing in the settlement. The company did not respond to requests for comment Wednesday.

Discovery of the violations was prompted, in part, by Indiana State Police, who made an undercover purchase of Vicodin, a highly addictive pain-killer, and Valium, a tranquilizer, from Sloan. Sloan told a police informant that he got the drugs from Newsom.

Sloan and Newsom were found murdered in their Indianapolis home Jan. 22, 1997. Franklin Dennis, who owed Sloan money for a drug debt, later pleaded guilty to Newsom’s murder and was sentenced to life in prison. An accomplice, Curtis Holtsinger, was convicted in Sloan’s death and also sentenced to life.

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