Prosecutors: Holbrook company officials plead not guilty to charges of drug refund scheme

Three officials from a Holbrook company, and the company itself, have pleaded not guilty to cheating the government and private companies out of $116 million in an alleged scheme involving refunds on pharmaceuticals, according to federal prosecutors.

The pleas by Guaranteed Returns; Dean Volkes, 51, of Port Jefferson, its owner and president; Donna Fallon, 50, of Miller Place, a company executive; and Ronald Carlino, 66, of Deer Park, who worked on the firm's computer systems, were entered Thursday at the federal court in Philadelphia, Patricia Harman, a spokeswoman for the U.S. Attorney there said.

The charges included conspiracy, obstruction of justice and lying to federal agents.

In a statement, the company said: ". . . The allegations brought against the company are not true and the company looks forward to its day in court where it believes it will be exonerated of all charges."

Volkes was released on $10 million bond, and Fallon and Carlino each on $250,000 bond, officials said. The company remains fully operational, the statement said.

When the company was originally charged and the three were arrested by FBI agents on Long Island in October, prosecutors said the scheme involved the fraudulent siphoning off through shell companies of refunds for unused drugs returned to the manufacturers.

Among the victims were the Defense Supply Center in Philadelphia, which buys drugs for the armed forces, the federal Department of Veterans Affairs, the District of Columbia Department of Health, and the Federal Bureau of Prisons, according to Eastern District federal prosecutor Lara Treinis Gatz.

Businesses such as Guaranteed Returns are supposed to help organizations navigate the complex systems of policies that drug manufacturers set up for buyers to obtain refunds on unused drugs, officials said.

Penalties upon conviction include up to 100 years in prison and up to $242 million in fines.

By Robert E. Kessler

Robert.Kessler@newsday.com

Bob Kessler covers federal law, including law enforcement agencies such as the FBI, DEA, IRS and ATF, as well as the federal courts.