Food and Drug Administration 
Office of Criminal Investigations

The United States Attorney’s Office for the Middle District of Pennsylvania, announced that the former owner of a pharmacy located in Sciota, Pennsylvania, Benny Salerno, age 38, of Stroudsburg, Pennsylvania, pleaded guilty to misbranding of pharmaceutical drugs at a hearing today in Wilkes Barre before United States District Court Judge A. Richard Caputo. Sentencing has been scheduled for May 24, 2012.

Salerno was the owner of Salerno’s Pharmacy in Monroe County from 1999 to 2007. Salerno’s pharmacy was a “closed pharmacy” in that it supplied prescription medication to health care institutions and did not sell to the general public. Salerno admitted that he directed employees to retrieve unused portions of medications from health care institutions and return the unused medications to stock for future use, regardless of lot number or expiration date. Such conduct is in direct violation of the U.S. Food and Drug Administration(FDA) regulations, which prohibit the return and reuse of medications once they have left the pharmacy. Salerno then sought reimbursement from government health care insurance providers for dispensing of the misbranded pharmaceuticals.

The U.S. Attorney’s Office agreed to a sentence of probation and Salerno agreed to forfeit $35,000 in proceeds of the scheme, in lieu of a fine, which shall be used to make restitution to the Pennsylvania Department of Public Welfare (DPW). Medicaid paid for a substantial portion of the medication that Salerno sought reimbursement for. DPW administers the Medicaid program with federal and state funds.

Additionally, the U.S. Attorney’s Office also stated that Salerno has agreed to a permanent exclusion from participating in state and federally funded health care benefit programs.

Salerno was indicted in October 2010.

U.S. Attorney Smith stated that, “The nature of pharmaceutical practice presupposes that the distribution of medication to all consumers, including those in care of institutions, is done in a manner which complies with all state and federal regulations. Such regulations are in place to protect the people who place their trust in the propriety of those dispensing the medications and to protect the public from unknowingly consuming medications other than those prescribed. Pharmacies that fail to abide by the regulations not only violate the consumers’ trust but pose a risk of grave danger to the public’s health and well-being.”

"The Office of Inspector General has an obligation not only to protect Medicare and Medicaid from fraudulent billing but also to protect its consumers from substandard care and potentially unsafe pharmaceuticals," said Nicholas DiGiulio , Special Agent in Charge for the Inspector General’s Office of the U.S. Department of Health of Human Services. “Mr. Salerno admitted to re-using already dispensed medicines without regard to safety, so, in addition to his sentence, the OIG will work to exclude Mr. Salerno from future participation in all federally funded health insurance programs.”

U.S. Attorney Smith also noted that the case indicated the need for Pennsylvania to clarify the wording and requirements of its regulations concerning reuse of medications by closed pharmacies and that the U.S. Attorney’s office would bring that to the attention of the appropriate state agency.

This investigation was conducted by the Office of Inspector General for Health and Human Services, the Food and Drug Administration and the Pennsylvania Office of Attorney General and is being prosecuted by Assistant United States Attorneys Amy C. Phillips and Michael A. Consiglio.

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