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Ex-Manager and CEO Convicted in $9.7 Million Valeant Kickback Scheme

Posted  May 23, 2018

By the C|C Whistleblower Lawyer Team

Yesterday, a federal jury in Manhattan convicted Gary Tanner, a midlevel executive at Valeant Pharmaceuticals International, and Andrew Davenport, the CEO of Philidor Rx Services, of conspiring to bring about Valeant’s purchase of Philidor in exchange for a $9.7 million kickback.

The scheme allegedly netted Davenport $40 million, and he kicked back a portion of it to Tanner.

According to prosecutors, Philidor, a specialty mail-order pharmacy, was founded in 2013 with Valeant’s assistance and primarily dispensed Valeant-branded products. At trial, prosecutors portrayed Tanner as Daveport’s “mole” inside Valeant, tasked with undermining Valeant’s negotiations with Philidor on pricing and thwarting the drugmaker’s attempts to sell its products through competing pharmacies.

In contrast, defense attorneys argued that Davenport legitimately helped Valeant grow its business, claiming the money paid to Tanner was not an illegal kickback. Davenport’s lawyer argued that “Real partners share with one another, not because it’s been corruptly influenced, but because it’s the right thing to do, in your gut.”

Manhattan U.S. Attorney Geoffrey S. Berman praised the jury’s verdict, stating that his office’s “commitment to this prosecution shows that corruption of publicly traded companies will be rooted out and met with justice.” The defendants intend to appeal their convictions, which could send them to jail for decades.

Tagged in: Financial and Investment Fraud, Pharma Fraud,