October 27, 2017

Founder and Owner of Pharmaceutical Company Insys Arrested and Charged with Racketeering

By the C|C Whistleblower Lawyer Team

The founder and majority owner of Insys Therapeutics Inc., was arrested and charged with leading a nationwide conspiracy to profit by using bribes and fraud to cause the illegal distribution of a Fentanyl spray intended for cancer patients experiencing breakthrough pain.

“More than 20,000 Americans died of synthetic opioid overdoses last year, and millions are addicted to opioids. And yet some medical professionals would rather take advantage of the addicts than try to help them,” said Attorney General Jeff Sessions. “This Justice Department will not tolerate this.  We will hold accountable anyone – from street dealers to corporate executives — who illegally contributes to this nationwide epidemic. And under the leadership of President Trump, we are fully committed to defeating this threat to the American people.”

John N. Kapoor, 74, of Phoenix, Ariz., a current member of the Board of Directors of Insys, was arrested this morning in Arizona and charged with RICO conspiracy, as well as other felonies, including conspiracy to commit mail and wire fraud and conspiracy to violate the Anti-Kickback Law. Kapoor, the former Executive Chairman of the Board and CEO of Insys, is scheduled to appear in federal court in Phoenix this week. He will appear in U.S. District Court in Boston at a later date.

The superseding indictment, unsealed today in Boston, also includes additional allegations against several former Insys executives and managers who were initially indicted in December 2016. The indictment also alleges that Kapoor and the six former executives conspired to mislead and defraud health insurance providers who were reluctant to approve payment for the drug when it was prescribed for non-cancer patients. They achieved this goal by setting up the “reimbursement unit,” which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers.

“In the midst of a nationwide opioid epidemic that has reached crisis proportions, Mr. Kapoor and his company stand accused of bribing doctors to overprescribe a potent opioid and committing fraud on insurance companies solely for profit,” said Acting United States Attorney William D. Weinreb. “Today’s arrest and charges reflect our ongoing efforts to attack the opioid crisis from all angles. We must hold the industry and its leadership accountable – just as we would the cartels or a street-level drug dealer.” DOJ

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