Day Of Reckoning For Insys, Wells Fargo, Martinair Executives

Insys Therapeutics founder John Kapoor was sentenced to five and a half  years in prison, a $250,000 fine and three years of supervised release in Boston’s Moakley Federal Court yesterday for orchestrating a criminal conspiracy to bribe doctors to prescribe Subsys, a highly addictive oral fentanyl spray.

A 10-week trial in May  “revealed sensational details about the company’s marketing tactics, including testimony that a sales executive once gave a lap dance to a doctor the company was wooing,” the AP’s Collin Binkley recalls  for Time.



“In other sentencings in recent days, Insys’ former vice president Michael Gurry and national director of sales Richard Simon each received 33 months in prison for their involvement in the scheme; former Insys CEO Michael Babich was sentenced to 30 months; the company’s regional sales director Joseph Rowan to 27 months; and Sunrise Lee, former regional sales director, to one year and a day in prison. Former vice president of sales Alec Burlakoff was sentenced to 26 months Thursday,” Joey Garrison writes  for USA Today.

“Assistant U.S. Attorney Nathaniel Yeager, who sought 15 years in prison, called Kapoor -- former chairman of the company's board --  the ‘linchpin”’ of the criminal scheme and the only defendant who could not have been replaced by another conspirator,” Garrison adds. 

“For the federal government, this was a landmark trial in which corporate executives were charged under the Racketeer Influenced and Corrupt Organizations Act (RICO), a charge often reserved for mob bosses and drug lords. Experts saw the trial as sending a message to drug companies that they will be held criminally accountable for their alleged role in fueling the opioid crisis,” writes  WGBH’s Gabrielle Emanuel.

“I think this is just the tip of the iceberg,” Brad Bailey, a former federal prosecutor and current defense attorney, tells Emanual. “It’s a template that prosecutors will continue to use.”

Meanwhile, former Wells Fargo chairman and CEO John G. Stumpf “was fined $17.5 million -- the largest individual fine in the history of the bank’s main federal regulator -- for his role in a toxic sales culture that foisted unwanted products and sham bank accounts on millions of customers,” in an agreement  with the Office of the Comptroller of the Currency (OCC), Stacy Cowley and Emily Flitter report for The New York Times. Stumpf also agreed to a lifetime ban from working in the banking industry.

“In a damning 100-page legal filing, the agency offered fresh details about the bank’s relentless pressure on employees to meet its unrealistic goals, which included ‘hazing-like abuse.’ Many employees said they felt they had only two options: Cheat or get fired,” they write.

Chief administrative officer Hope Hardison and chief risk officer Michael Loughlin also settled with the OCC and will pay fines of $2.25 million and $1.25 million respectively.

“The settlements were a rare instance of personal consequences for those at the highest echelons of the banking industry,” Cowley and Fitter add.

The OCC also announced that “it was suing five other former Wells Fargo executives for a combined total of $37.5 million for their roles in the bank's poor practices,” the AP’s Ken Sweet reports for the [Minneapolis] Star Tribune.

Finally, after 10 years on the run, Maria Christina Ullings, who was senior vice president of cargo sales and marketing for Martinair Holland N.V., was sentenced to 14 months in prison and fined $20,000 yesterday in U.S. District Court for the Northern District of Georgia for a price-fixing scheme.

“Ullings was part of a price-fixing conspiracy from early 2001 to early 2006, according to the Justice Dept. The shipments involved ranged from heavy equipment to perishables. The long-running probe into price fixing in the air cargo industry led to charges against 22 airlines and 21 executives, the department said,” Reuters’ Diane Bartz reports.

“Ullings was apprehended by Italian authorities in July 2019 while visiting Sicily. Ullings initially contested extradition in the Italian courts, but after the Court of Appeals of Palermo ruled that she be extradited, she waived her appeal,” according to STL News

“The ultimate loser in price fixing schemes is the American consumer,”  said  special agent in charge Chris Hacker of the FBI’s Atlanta Field Office in a statement. “Individuals and companies that feel like they don’t need to follow the rules should understand the FBI and our federal law enforcement partners will pursue anyone who threatens our economy and our citizens.”

Clearly, the message of the day, to quote Adam Schiff in his closing argument during the Senate impeachment trail of Donald Trump last night, was: “Right matters and truth matters. Otherwise, we are lost.” 

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