Posts Tagged ‘bribes’

Former Brazilian minister sentenced to 12 years prison

June 26, 2017


© AFP/File | Antonio Palocci, in custody since September, was convicted of taking bribes and money laundering as part of a huge corruption network centered on the state-owned Petrobras oil company

BRASÍLIA (AFP) – A Brazilian court sentenced Antonio Palocci, an influential minister during the leftist governments of Luiz Inacio Lula da Silva and Dilma Rousseff, to 12 years prison for corruption Monday.Palocci, in custody since September, had been convicted of taking bribes and money laundering as part of a huge corruption network centered on the state-owned Petrobras oil company.

He was sentenced to 12 years and two months behind bars by Judge Sergio Moro, who heads the “Car Wash” probe dismantling the embezzlement and kickbacks scheme at Petrobras.

A finance minister under Lula and chief of staff for Rousseff, both from the Workers’ Party, Palocci is negotiating a plea bargain with prosecutors. That could add to the avalanche of evidence already driving scores of investigations into political leaders, including Lula who faces five corruption court cases.

Moro is currently considering a verdict in one of those cases, in which Lula is alleged to have received a seaside apartment as a bribe from one of Brazil’s biggest construction companies.

Corruption charges against Brazil’s Temer expected to come in waves: source — Plus related recent articles

June 24, 2017


By Ricardo Brito and Maria Carolina Marcello

Brazil’s top federal prosecutor will level corruption charges against President Michel Temer one at a time instead of making all the accusations at once, a strategy aimed at weakening his defense, a source with direct knowledge of the process told Reuters on Friday.

Under Brazilian law, any criminal charges against a sitting president must be approved by two-thirds of the lower house of Congress in order for the Supreme Court to put a leader on trial.

Top prosecutor Rodrigo Janot is expected to charge Temer with receiving bribes early next week. The president is also facing accusations of racketeering and obstruction of justice.

Temer’s office and his attorney, Antonio Mariz, did not immediately respond to requests for comment. Temer has repeatedly said he is innocent of all accusations.

The investigation is hampering the president’s ability to push his economic reforms through Congress.

Key lawmakers in Temer’s alliance told Reuters this week, on condition of anonymity so they could speak freely, that they will set aside work on those proposed labor law reforms if forced to vote on criminal charges against Temer.

They also said they will not even consider advancing work on pension reforms until changes to the labor law are passed.

Temer is being investigated in connection with a political graft scheme involving JBS SA, the world’s largest meatpacker. Company executives said in plea-bargain testimony that the president took nearly $5 million in bribes in return for help resolving tax matters, for freeing up loans from state-run banks and other matters.

Joesley Batista, one of the brothers who control JBS, also made a recording of a conversation he had with Temer earlier this year. In it the president appears to condone paying off a potential witness. Batista also accused Temer and aides of negotiating millions of dollars in illegal campaign donations for his Brazilian Social Democracy Party.

Lawyers defending Temer were trying to dismiss the use of the recording in the investigation, saying it was manipulated. But police said on Friday after finishing an analysis of the audio files and the equipment used by Joesley Batista to record the president that they were valid.

Lawmakers in Temer’s alliance say they have the one-third of lower-house votes required to block any charges against Temer. Out of 513 deputies, leaders in the alliance said this week they have between 250 and 300 votes.

But they also told Reuters they widely expected Janot to use the strategy of dragging out the charges against Temer in an effort to wear down lawmakers with multiple votes.

Those ballots will be deeply unpopular with Brazilian voters who overwhelmingly believe Temer is corrupt, according to opinion polls.

It also gives more time for possible new corruption revelations to surface against Temer, said another key lawmaker speaking on condition of anonymity, potentially eroding his support in the house.

(Reporting by Ricardo Brito and Maria Carolina Marcello; Additional reporting by Brad Brooks; Writing by Brad Brooks; Editing by Jonathan Oatis and Sandra Maler)


China Moves to Discredit Tycoon’s Claims of Communist Party Corruption

April 21, 2017

BEIJING — China on Friday sought to discredit billionaire businessman Guo Wengui, painting him as a “criminal suspect” whose allegations of corruption within the highest levels of the Communist Party should not be believed.

Guo, a flamboyant property mogul who has held close ties to disgraced former Chinese intelligence official Ma Jian, has courted international attention with his explosive claims, most recently aired during a live television interview with the U.S government-funded Voice of America (VoA) on Wednesday.

 Exiled businessman Guo Wengui. Photo: Handout

China said on Wednesday that Guo was subject to an Interpol “red notice”, a fact Foreign Ministry spokesman Lu Kang reiterated at a regular press briefing in Beijing on Friday.

“If you are willing to believe what he said then that’s your business,” Lu said. “We don’t believe it.”

The Chinese government had pressed VoA to cancel the interview ahead of time, including by summoning one of the broadcaster’s Beijing-based correspondents to a meeting on Monday, sources with knowledge of the matter told Reuters.

The ministry’s comments come amid an apparently concerted damage-limitation effort within China highlighting Guo’s reputation as an unreliable narrator.

A 23-minute video, purportedly of Ma Jian confessing in detail to accepting 60 million yuan ($8.72 million) in bribes from Guo, has circulated on Chinese social media since Wednesday night without being removed by government censors who are often quick to delete politically sensitive posts or unsubstantiated rumors.

The video, which was produced and posted online anonymously, has also been reported on widely by mainland media outlets, all of which are regulated by the government. Reuters was unable to independently verify the veracity of the video.

The widely read Beijing News newspaper, and the respected financial magazine Caixin, also published lengthy investigations into Guo’s business dealings and ties with Ma, a disgraced former state security vice-minister who was first detained in early 2015 and expelled from the Communist Party in December last year.

Guo has said he left China in late 2014 after being tipped off about Ma’s imminent arrest, and has not returned since his company premises were raided amid a heated dispute with state-backed Founder Securities.

Since leaving, he has spent most of his time in the United States.

After laying low for two years, Guo resurfaced in February and has since made wide-ranging but unverified allegations of corruption against several top Communist Party officials – past and present – and their families.

He says the information was obtained from Ma, whom he concedes he held a close relationship with but denies bribing.

At Friday’s Foreign Ministry briefing, Lu rejected suggestions the timing of the Interpol red notice was connected to the airing of the VoA interview.

“Interpol has been around for 100 years and has 190 member states,” he said. “For this kind of international organization we think their actions are solemn.”

(Reporting by Philip Wen and Ben Blanchard; Editing by Robert Birsel)



South Korea special prosecutor: President Park colluded with friend to receive Samsung bribe

March 6, 2017


Special prosecutor Park Young-soo announces the results of their investigation over an influence-peddling scandal involving South Korean President Park Geun-hye, in Seoul, South Korea, March 6, 2017. REUTERS/Kim Hong-Ji
By Ju-min Park | SEOUL

South Korea’s President Park Geun-hye colluded with her friend Choi Soon-sil to receive bribes from Samsung Group aimed at cementing Samsung Chief Jay Y. Lee’s control of the company, a special prosecutor said in a statement on Monday.

In a statement detailing the findings of its investigation, the special prosecutor’s office said the National Pension Service voted in favor of a merger of two Samsung Group affiliates in 2015, despite anticipating a 138.8 billion won ($119.87 million) loss.

“Samsung Group vice chairman Lee Jae-yong colluded with others including the corporate strategy office chief Choi Gee-sung to bribe the president and Choi Soon-sil with an aim to receive support for his succession by embezzling corporate funds,” special prosecutor Park Young-soo told a televised news conference, referring to the Samsung chief’s Korean name.

Park, Choi and Lee have all denied wrongdoing. Samsung Group did not immediately have comment, but has in the past denied it ever paid bribes or sought improper favors from Park.

The investigation looked into an influence-peddling scandal involving Park, who was impeached by parliament in December after accusations she had colluded with her long-time friend Choi to pressure big businesses to donate to two foundations set up to back the president’s policy initiatives.

The 65-year-old daughter of a former military strongman has had her powers suspended. The Constitutional Court will rule on whether to uphold parliament’s December impeachment of Park. The court is expected to hand down its decision sometime in March.

Should it uphold the impeachment, Park would become the country’s first democratically elected president to be thrown out of office and spark an election in Asia’s fourth-largest economy.

Lee, a third-generation leader of the Samsung tech giant “chaebol”, and four other executives, were last week charged with bribery and embezzlement over the corruption scandal.

Lee is accused of pledging 43 billion Korean won ($37.19 million) in bribes to a company and organizations backed by Park’s confidant Choi to curry favor and cement his control of the conglomerate.

Based on the main charges levied against Lee, he could face up to 20 years in prison if convicted.

(Additional rporting by Vincent Lee; Writing by Christine Kim; Editing by Michael Perry)

BBC journalist faces five years jail for Thailand reporting

February 23, 2017


© AFP/File | The BBC’s Southeast Asia correspondent Jonathan Head is being prosecuted for criminal defamation by a Thai lawyer

BANGKOK (AFP) – A British journalist with the BBC faces up to five years in a Thai jail after a lawyer brought a criminal defamation case against him over an investigation into fraud on a popular tourist island.Rights groups say the case exposes how Thailand’s broad defamation and computer crime laws scupper investigative journalism and make it difficult to expose wrongdoing in a country where corruption is endemic.

The prosecution was sparked by a September 2015 report by Jonathan Head, the BBC’s Southeast Asia correspondent, looking at how two foreign retirees were scammed out of their properties in Phuket.

Head appeared in a Phuket court on Thursday alongside one of the retirees, British national Ian Rance who is a joint defendant in the prosecution. Both pleaded not guilty.

The man bringing the prosecution is Pratuan Thanarak, a Phuket lawyer who featured in the BBC’s report looking at how Rance lost lucrative properties.

Rance retired to Phuket in 2001, married a local woman with whom he had three children and bought what he said were some $1.2 million worth of properties.

Under Thai law foreigners cannot own land. But many get around that provision by placing properties in the name of a company they own or with locals they trust.

In 2010 Rance discovered his wife had forged his signature to remove him as director and sell the properties with the help of a network of money lenders and property agents on the island.

She was jailed for four years over the scam.

The BBC’s Head reported that Pratuan, the lawyer, admitted to notarising Rance’s signature without him being present.

Pratuan filed a defamation case alleging the reports caused him to be “defamed, insulted or hated”, according to a copy of the complaint seen by AFP.

– ‘Legal blood sport’-

Rance and Head face one charge of criminal defamation, which carries up to two years in jail. Head faces an additional charge under Thailand’s Computer Crimes Act, which has a five year maximum jail penalty.

Head has had to surrender his passport to the court leaving him unable to work across Asia as he fights what could be a two year court battle.

In a statement the BBC said it “stands by its journalism” and that they “intend to clear the name of our correspondent”.

Unlike most countries where defamation is a civil crime, in Thailand it is a criminal offence.

Private citizens can launch their own cases and they are not forced to pay costs if they lose.

Brad Adams, Human Rights Watch’s Asia director, said the case against Head and Rance showed “exactly why having criminal defamation laws is such a bad idea”, adding the powerful can “engage in game of legal blood sport by dragging people through the Thai court system”.

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Writers often find themselves on the receiving end of costly suits.

Local news site Phuketwan spent years defending itself from a suit filed by Thailand’s navy after it alleged official complicity in human trafficking.

The site eventually won in 2015 but had to close down because funds were exhausted.

Andrew Drummond, a British journalist who spent years writing about Thailand’s criminal underworld, left the country the same year after a slew of defamation cases and threats were made against him by people he exposed.

British rights activist Andy Hall also left Thailand in 2016 after multiple defamation cases were filed against him — both by prosecutors and private citizens — over a report he helped research highlighting abuses in the country’s lucrative fruit export sector.

Philippines’ police chief breaks down sobbing after drug kingpin accuses cops of corruption — “Extrajudicial killings, vigilantes, and a cesspool of human rights violations and corruption”

November 24, 2016


MANILA – The Philippines’ police chief broke down before a Senate inquiry on Wednesday and vowed to stand by President Rodrigo Duterte and his deadly war on drugs, after a narcotics kingpin testified to entrenched police involvement in the illicit trade.

Amid high drama in the televised hearing, an emotional Ronald dela Rosa grimaced and held back tears in animated remarks in which he promised to rid police ranks of crooked elements.

Philippines — Emotional Philippine National Police chief Ronald Dela Rosa cries over erring cops, November 23, 2016. Phil Star photo

Dela Rosa, a stocky, celebrity-like general nicknamed “Bato” (Rock), was responding to hours of testimony from Kerwin Espinosa, a confessed drugs dealer and son of a mayor who was shot dead last month by police while in prison on remand for narcotics links.

“I will not surrender, I will clean up the national police,” Dela Rosa told senators.

“I will be with you,” Dela Rosa said of Duterte. “I will not abandon this fight even if the public is losing trust in the police.”

READ MORE: Philippines President Rodrigo Duterte wants to be ‘friends’ with Trump, Putin

Parallel probes by both chambers of the Philippine legislature have been largely drab, though sometimes highly dramatic.

The panels have heard gripping witness accounts of all things from death squads and sordid affairs to corruption, murder and sex tapes. Participants have included convicted kidnappers, prison gangsters, an assassin and world boxing icon Manny Pacquiao.

In September, a self-proclaimed hit man testified to having heard Duterte order assassinations and to having watched him kill a man with a machine gun while a mayor in 1993. Duterte has rejected those claims as lies.

Close to 2,500 people were killed in the first four months of Duterte’s presidency, mostly in police operations. Others were killed by suspected vigilantes.

Duterte has resolutely defended the police and is outraged by Western and activist concerns that extrajudicial killings could be taking place.

Espinosa, who arrived at the hearing wearing a flak jacket, confessed to dealing in drugs and to paying police protection money. He accused two generals and numerous officers on his turf of complicity.


A former Philippine Government official told Peace and Freedom we are are “only seeing the tip of the iceberg” of “Extrajudicial killings, assassinations, vigilantes, and a cesspool of human rights violations and corruption.”



Fentanyl Billionaire Comes Under Fire as Death Toll Mounts From Prescription Opioids

November 23, 2016

Employees of John N. Kapoor’s Insys Therapeutics bribed doctors to prescribe large, off-label doses of painkiller, prosecutors charge

John N. Kapoor, co-founder of Insys Therapeutics Inc.
John N. Kapoor, co-founder of Insys Therapeutics Inc. PHOTO: FORBES MEDIA/CORBIS/GETTY IMAGES


Nov. 22, 2016 11:09 a.m. ET

Before they were arrested last year, Alabama doctors John Couch and Xiulu Ruan were prized customers of Insys Therapeutics Inc., maker of a powerful and highly addictive type of synthetic opioid known as fentanyl.

rs. Couch and Ruan prescribed a combined $4.9 million of the painkiller, called Subsys, to Medicare patients in 2013 and 2014, among the most of any doctors in the U.S., federal data show.

Insys, based in Chandler, Ariz., went to unusual lengths to keep these high-prescribing doctors happy. Insys Executive Chairman John N. Kapoor, the company’s billionaire co-founder, personally traveled to Mobile, Ala., to attend a business dinner with them, said people familiar with the matter. The doctors were also frequent speakers and consultants for Insys, which paid them $270,700 in combined fees over 21 months, according to government data.

Many of those fees were bribes paid by Insys to reward the doctors for prescribing large quantities of Subsys, federal prosecutors allege in a 22-count criminal indictment filed in Mobile against the doctors this April. Overall, the pair wrote more than a quarter-million prescriptions for fentanyl, oxycodone and other controlled substances including Subsys over five years, some of which were abused by addicts or diverted to drug traffickers, the indictment alleges.

Dr. Xiulu Ruan, right, pleaded not guilty to charges related to his prescribing of Subsys and other drugs in Mobile, Ala., federal court in May 2015.
Dr. Xiulu Ruan, right, pleaded not guilty to charges related to his prescribing of Subsys and other drugs in Mobile, Ala., federal court in May 2015. PHOTO: CASEY TONER/AL.COM

The doctors deny the allegations. Insys declined to respond to specific questions for this article but said in a statement that it is “committed to working with the health care community to help ensure the proper prescribing and use of our products.” The company itself hasn’t been accused of any crimes.

Fentanyl, an opioid drug up to 50 times as powerful as heroin, is helping to fuel an addiction crisis in America that killed 29,500 people in 2014. Most of the illegal use involves street versions of the drug, which can be quickly made from chemical ingredients—often imported from China—and pressed into pills or cut into heroin. But prescription fentanyl is an increasing focus of law-enforcement authorities, including Subsys, a mouth-spray form approved for treating severe pain.

Just a handful of doctors, many with close ties to Insys, are responsible for outsize levels of prescribing of Subsys, according to a Wall Street Journal analysis of government databases, court documents and interviews with former company employees. Of the top 20 physician-prescribers of Subsys to Medicare patients in 2014, more than half were also among the 20 largest recipients of consulting and other fees from Insys that year, a Journal analysis of recently released federal data shows.

Federal and state prosecutors and regulators in more than 15 jurisdictions are investigating Insys’ business practices or doctors with whom Insys has ties, the company has said in financial statements.

Two former Insys employees charged with participating in a kickback scheme allegedly “helped feed this devastating surge of opioid addictions by tapping into another age-old addiction, greed,” U.S. Attorney for the Southern District of New York Preet Bharara said in a statement announcing the charges in June.

The two former employees have pleaded not guilty and declined to comment. In its statement, Insys said it “is committed to complying with all laws and regulations that govern our products and business practices,” and it has designed a “compliance program and protocols that strive to ensure that our employees are properly trained, monitored, and disciplined consistent with industry standards and applicable laws and regulations.”

Florida’s attorney general is investigating the company for potential violations of the state’s civil-racketeering laws, according to a subpoena sent to the company and reviewed by the Journal. Among the documents requested in the subpoena are communications by Dr. Kapoor and other executives regarding the company’s use of doctors to promote Subsys at speaking events.

Last month, federal prosecutors in Boston arrested the former head of Insys’ reimbursement unit, alleging she oversaw and encouraged widespread fraud in obtaining payment for Subsys from pharmacy-benefit managers.

Subsys is one of several fentanyl drugs that are absorbed through the mouth or nose. The delivery method allows for fentanyl’s pain-relieving and euphoric effects to take hold rapidly, but also significantly raises the risk of addiction, overdose and death, says Lewis Nelson, chairman of emergency medicine at Rutgers New Jersey Medical School. It is approved by the Food and Drug Administration for the treatment of extreme cancer pain.

Because of the dangers, the FDA requires that the drugmakers enroll doctors, pharmacies and patients in a database. Doctors must pass an exam on the drugs’ risks.

“If you’re going to die in a few months, you should be getting a medication that works really well and even carries danger, but if you’re going to live another 30 years, the risk-benefit changes a lot,” says Dr. Nelson.

Doctors are largely free to prescribe drugs as they see fit, and the majority of Subsys sales have come from patients without cancer, according to people familiar with the matter. For some, the consequences were dire.

In February, a pharmacy shipped a month’s supply of Subsys to a man in his early 30s who was prescribed the drug for back pain. He broke open the spray-containers, poured the fentanyl into a cup, and suctioned it into a syringe. Within hours, he was dead. “Multiple needles” and “units of Subsys” were “found around the bed [where] the patient’s body was found,” according to an adverse-event report submitted by Insys to the FDA and obtained by the Journal with a Freedom of Information Act request.

Insys is run by Dr. Kapoor, a 73-year-old pharmaceuticals executive known for applying aggressive marketing tactics and sharp price increases on older drugs. He emigrated from India to the U.S. in 1964 and received a doctorate in medicinal chemistry from the University at Buffalo in 1972. Four decades later, the university named its school of pharmacy Kapoor Hall after the billionaire donated $10 million.

By 1987, Dr. Kapoor had gained control of LyphoMed Inc., after investing just $50,000 of his own money to acquire the company. The company attracted protests after acquiring a decades-old drug being used to treat AIDS and quadrupling its price to $100 per dose, which activists called price-gouging. Dr. Kapoor made more than $100 million when he sold the company in 1990 to a predecessor of Astellas Pharma Inc.

Dr. Kapoor co-founded Insys in 2002 with the aim of developing new ways to administer older drugs. It wasn’t until 2012 that Insys won approval for its first new product, Subsys. Booming sales of the drug helped make Insys the best-performing initial public offering in 2013.

The abuse of fentanyl has become a major contributor to the national opioid-addiction epidemic. Here’s how the synthetic drug affects the brain. Video/Image: Arielle Ray/The Wall Street Journal

In the summer of 2015, Subsys represented one of every two prescriptions for rapid-acting fentanyl prescribed in the U.S., according to prescription data from Quintiles IMS Holdings Inc. Insys’ revenue of $330.8 million through the end of the year had more than tripled since 2013. Profits had climbed 45% to $58.5 million.

The drug’s success was underpinned by tactics that Dr. Kapoor used to great effect at his previous companies, charging high prices and employing a low-salaried, highly motivated sales force.

Insys paid its sales representatives base salaries of $40,000, well below the industry average, but offered them the chance to make many multiples more in sales commissions. The “cost-efficient” and “incentive-based” model was similar to that used by Dr. Kapoor at his previous companies, Insys said in its IPO prospectus.

Some Insys executives, including Dr. Kapoor, described their ideal sales people as Ph.D.s—“poor, hungry and dumb,” said a person familiar with the matter.

Last year, Insys had its 250-person sales force target 1,700 doctors who prescribed the majority of fast-acting fentanyl in the U.S., with a particular “focus on the highest prescribers,” the company said in its annual report.

Successful sales reps were very well-compensated, some making more than $500,000 annually, because they received a percentage of the total cost of each prescription their doctor-clients wrote, according to people familiar with the matter and court records.

The compensation structure was designed to push reps to have doctors prescribe the highest doses possible, prosecutors have alleged. New reps received 7% of sales for Subsys doses between 100 and 800 micrograms, but received a 10% commission for the highest doses of 1200 micrograms to 1600 micrograms, according to the company’s fourth-quarter 2013 compensation plan, which was obtained by the Oregon attorney general and reviewed by the Journal.

The tiered commission structure was later discontinued, said a person familiar with the matter. But reps still had a financial incentive to push higher doses, because they were also more expensive, the Illinois attorney general alleged in an August civil complaint seeking to bar Insys from doing business in the state.

A month’s supply of the lowest Subsys dose of 100 micrograms was $930 at the beginning of 2016, up 45% from when the drug launched; the price for one of the highest doses, 800 micrograms, had more than doubled to $4,070, according to Truven Health Analytics, which tracks prices charged to wholesalers. Some doctors wrote prescriptions for as many as four doses per day, according to government allegations and FDA adverse-event reports, which at the highest doses would be more than $16,000 per month.

The FDA’s approval of Subsys instructed doctors to start all patients at the 100 microgram dose and, if needed, to slowly increase the strength that relieved the patients’ pain. At a 2013 meeting of Insys’ board of directors, the company “identified the 100 mcg starting dose of Subsys” as a “strategic challenge,” the Illinois complaint alleges. Insys flagged prescriptions for fewer than 400 micrograms and instructed reps to work with their doctors to increase the dosages, the complaint says.

Boxes of 600 mcg Subsys found in the home of a patient after her death.
Boxes of 600 mcg Subsys found in the home of a patient after her death. PHOTO: RICHARD HOLLAWELL

Medicare spending on Subsys tripled to roughly $97 million in 2014 from 2013, and soared an additional 76% to $171.3 million last year, according to previously unpublished data provided to the Journal by the Office of Inspector General for the Department of Health and Human Services.

Gavin Awerbuch, a neurologist in Saginaw, Mich., wrote 527 Subsys prescriptions in 2014 that cost Medicare $3.7 million, according to data released this year by the Centers for Medicare and Medicaid Services. He was arrested on federal charges of health-care fraud and distribution of controlled substances in May 2014.

In 2013, Dr. Awerbuch’s Subsys prescribing to Medicare patients was even more prolific, totaling $6.4 million in the year, the most in the U.S. and nearly five times as much as the nation’s second-largest prescriber, the data show.

As with several other top Subsys prescribers, Insys had a close relationship with Dr. Awerbuch, paying him $90,000 in fees for speaking, food and travel expenses over 10 months from 2013 until his arrest, according to the federal Open Payments database, which collects data from drug and medical-device companies on their payments to doctors and teaching hospitals.

One of Dr. Awerbuch’s patients, identified in the government’s criminal complaint as D.G., was given eight Subsys prescriptions over five months, at a cost to Medicare of $28,590. The drug was “too much” for D.G., making him “incoherent and unable to function,” his spouse said, according to the complaint. Dr. Awerbuch “continually fed D.G. pain medications,” which eventually caused him to enter detoxification treatment, the spouse said, according to the complaint.

Another of Dr. Awerbuch’s patients was an undercover police officer, according to the complaint. When the officer requested OxyContin for his moderate pain, Dr. Awerbuch said the drug was “highly addictive” and that he would prescribe a new drug called Subsys instead. The first 30 doses would be free with a coupon, Dr. Awerbuch told the officer, according to the complaint.

This month, Dr. Awerbuch pleaded guilty to illegally prescribing Subsys and defrauding a Michigan health-insurer. He is scheduled to be sentenced in February.

After Dr. Awerbuch’s arrest, Patty Nixon began having panic attacks, often vomiting in the morning before going to work at Insys, she says. As a staff member of Insys’ reimbursement center she had worked often with Dr. Awerbuch’s office to get his prescriptions paid for by pharmacy-benefit managers, which oversee drug spending for employers and insurers.

Ms. Nixon’s job involved a lot of lying, she says. Many PBMs refused to pay for Subsys unless it was prescribed specifically for cancer pain or unless patients had tried a cheaper alternative first. So, when Ms. Nixon and other Insys employees called PBMs, they would often pretend to be from the doctors’ office that wrote the prescription and say the patient had cancer even when they didn’t, she says. Most patients had actually been diagnosed with chronic pain, including back, neck and shoulder pain, Ms. Nixon said.

Ms. Nixon says she and other employees were pressured to improve the approval rate for prescriptions by their boss, Elizabeth Gurrieri, the former Insys manager arrested in October. Ms. Gurrieri hasn’t entered a plea.

“She’d say, ‘Dr. Kapoor’s not happy, we have to get these approvals up,’” Ms. Nixon recalls. Ms. Nixon says she also testified to a federal grand jury in Massachusetts last year about her experiences at Insys.

Ms. Gurrieri and other Insys managers taught reimbursement-unit employees to “mislead and deceive insurers regarding their employment, patient diagnoses” and the medications patients had taken previously, according to a criminal complaint that accuses Ms. Gurrieri of wire-fraud conspiracy. “In this environment, corruption became endemic within the Reimbursement Unit,” the complaint says.

Ms. Gurrieri didn’t respond to requests for comment left on her cellphone.

In Alabama, Drs. Ruan and Couch made $40 million in illicit gains from operating “what was, in essence, a pill mill,” according to the government’s April indictment.

Prescribing opioids was especially profitable for the pair because many of their prescriptions were dispensed to patients by C & R Pharmacy, which they co-owned and operated from one of their Mobile pain clinics, the indictment says.

Dr. Ruan wasn’t only the top purchaser of fentanyl, oxycodone and morphine in Alabama in 2013 and 2014, but also “one of the most prolific purchasers of Controlled Substances” in the U.S., the indictment says. “He regularly out-purchased doctors in much larger cities.”

Subsys was a significant part of C & R’s business. The pharmacy was the largest dispenser of Subsys to the military insurance program Tricare in 2013, distributing 326 Subsys prescriptions at a cost of $1.6 million, or 22% of the program’s total spending on the drug, according to data obtained by the Journal through a Freedom of Information Act request. The pharmacy’s Subsys billings to Tricare reached $1.8 million in 2014.

Two former Insys employees, center, pleaded not guilty to charges in New York federal court of participating in a kickback scheme to promote Subsys sales.
Two former Insys employees, center, pleaded not guilty to charges in New York federal court of participating in a kickback scheme to promote Subsys sales. PHOTO: NATE RAYMOND/REUTERS

In 2014, Insys agreed to bypass its wholesalers and sell Subsys directly to C & R Pharmacy, according to people familiar with the matter. The arrangement provided the doctors with a lower price than they would get from a wholesaler, allowing them to keep a bigger share of the drug’s retail cost when they billed insurers, the people said. Insys executives hoped the deal would give the doctors an incentive to prescribe Subsys even more, according to one of the people. The doctors sealed the deal over a dinner at Ruth’s Chris Steak House in Mobile attended by Dr. Kapoor, former Insys Chief Executive Michael Babich and sales manager Joe Rowan, one of the people said.

Through their attorneys, Dr. Couch and Dr. Ruan declined requests for interviews. Mr. Rowan declined to comment. Mr. Babich didn’t return messages left on his cellphone.

“Dr. Couch’s medical practice, including the purchase or prescription of medication, was appropriate, within the relevant guidelines and in the best interests of his patients,” said his attorney Jackson Sharman, in an emailed statement.

Dr. Ruan “attended a dinner in Mobile at the request of an Insys sales representative that routinely called upon him,” but the dinner was not “arranged or requested by Dr. Ruan” and did not influence the way he practiced medicine or the prescriptions he wrote for patients, said Dennis Knizley, an attorney for Dr. Ruan, in an emailed statement.

C & R was a reliable customer, paying its bill “like a Swiss watch,” right up until the Drug Enforcement Administration and Federal Bureau of Investigation raided its offices last year, one of the people said.

The doctors’ trial is scheduled to begin in January, and they are expected to defend themselves against charges that include prescribing opioids that led to the deaths of four patients and carry penalties of 20 years to life in prison.

The prosecution’s witnesses may include Natalie Perhacs, a former Insys saleswoman who was arrested in February 2016. She is cooperating with the government after she pleaded guilty in February to conspiring in a bribery scheme with the doctors, according to a person familiar with the matter.

Insys hired Ms. Perhacs in 2013 on the recommendation of Dr. Ruan, who “had developed a certain affection” for the woman, prosecutors allege. Over the next two years, Ms. Perhacs scheduled one speaking event per week for each doctor, most of which were designed to “funnel kickbacks to high-volume Subsys prescribers,” she admitted in her guilty plea.

Her duties also included identifying patients on low doses of Subsys and urging the doctors to prescribe higher doses, as well as securing insurance reimbursement for the doctors’ prescriptions, nearly all of which were for people without cancer, Ms. Perhacs admitted.

Ms. Perhacs made more than $700,000 over two years working at Insys, with the vast majority of the money coming from commissions on Subsys prescriptions written by Dr. Couch and Dr. Ruan, she admitted.

Through her attorney, Ms. Perhacs declined to comment.

By the spring, insurers had started cracking down on paying for Subsys when prescribed to noncancer patients, or “off-label” in industry jargon. Last year, some 80% of new Subsys patients were prescribed the drug off-label, before plunging to 20% in 2016, the person familiar with the matter said.

In September, Insys announced that Dr. Kapoor would step aside as CEO and that the company had begun a search for a new chief executive.

“Our company remains committed to overcoming the challenges that we have faced and building shareholder value,” Dr. Kapoor said in a statement announcing his planned resignation.

Write to Joseph Walker at




Vietnam, Neighbors Told to Close Illegal Wildlife Markets

November 17, 2016

Hanoi — Vietnam and neighboring countries should shut down illegal wildlife markets and step up their fight against the trafficking of rhino horn, ivory and tiger parts, international conservationists said on Thursday.

The call was made during a conference on illegal wildlife trade hosted by Hanoi, with Britain’s Prince William, President of United for Wildlife, and representatives from over 50 countries among the attendants.

Last Saturday Vietnam destroyed nearly 2.2 tonnes of seized elephant ivory and 70 kg of rhino horns from 23 rhinos and about 330 African elephants, in one of its strongest moves yet to stop illegal wildlife trafficking.

“Your first ever destruction of illegally traded ivory and rhino horn at the weekend provides a powerful example ahead of this conference, and we look forward to hearing about the further actions you plan to take,” Prince William told the Hanoi conference.

Countries in the Greater Mekong region including Vietnam have failed to close their illegal wildlife markets, while Hanoi has also made little effort to target major traders and smugglers of illicit wildlife products, WWF and Traffic said in a joint statement.

“Vietnam can no longer turn a blind eye to wildlife crime because the world is watching: the government must use this conference to signal a new start by announcing concrete plans to end the rhino horn and ivory trade and close all tiger farms,” WWF Vietnam Country Director Thinh Van Ngoc said.

He urged Vietnam to launch a concerted campaign against wildlife crime, saying Cambodia, Laos, Myanmar and Thailand should follow suit.

The country is a transit point for elephant ivory for consumers in mostly China and the United States to make jewelry and home decorations, while it is a major consumer of rhino horn.

The usage and trading of rhino horn is a criminal offence in Vietnam, but demand is strong due to a long-held belief in rhino horn’s medical power as an elixir.

“We expect that Vietnam will demonstrate its commitment in coming years to really clamp down on the trade, transit and source of wildlife,” Jorge Eduardo Rios, a manager at the U.N. Office on Drugs and Crime told Reuters Television.

The conference reviewed progress towards commitments made at previous gatherings to tackle wildlife crime, including action to eradicate markets, strengthening law enforcement efforts and promoting sustainable livelihoods and economic development.

It called on governments to involve in the fight.

“Action needs to be taken at all points in the illegal trade chain in source, transit and destination countries,” said a statement issued at the conference.

(Reporting by Nguyen Ha Minh and Ho Binh Minh; Writing by Ho Binh Minh; Editing by)



Prince William urges Vietnam to fight use of rhino horn, elephant ivory

  • AP, Hanoi
  • |

  • Updated: Nov 16, 2016 15:38 IST
Britain’s Prince William (centre), Duke of Cambridge leaves the Vietnamese Prime Minister’s Cabinet Office after meeting with Prime Minister Nguyen Xuan Phuc in Hanoi on Wednesday. (AFP)

Britain’s Prince William on Wednesday urged Vietnamese leaders to step up the fight against trafficking in wildlife species, the main theme of his first visit to the communist country.

The Duke of Cambridge, who is president of United for Wildlife, met Vietnamese Prime Minister Nguyen Xuan Phuc and Vice President Dang Thi Ngoc Thinh on Wednesday before attending a two-day conference on illegal wildlife trade starting Thursday in Hanoi.

“During his call on the prime minister, the Duke spoke about the strength of the relationship between the United Kingdom and Vietnam and said he was looking forward to hearing what Vietnam was doing to tackle the challenges presented by the illegal wildlife trade,” the prince’s office said in a statement on Wednesday.

It said “the Duke will engage with a wide cross section of Vietnamese society in order to encourage the work of local people to stamp out the use of things like rhino horn.”

Vietnam is one of the world’s major transit points and consumers of trafficked ivory and rhino horns, which people mistakenly believe can be used a cancer cure. On Saturday, authorities destroyed 2.2 tons of seized elephant ivory and rhino horns in a bid to stamp out trafficking.

The official Vietnam News Agency quoted Prime Minister Phuc as telling William that Vietnam had paid great attention to raising awareness among the public about wildlife conservation and severe punishments were handed down.

It quoted William as telling Phuc that the fight to protect endangered wildlife is a transnational and urgent issue and that the government plays a crucial role in ensuring its success.

China: Government Land Seizures, Questionable or Corrupt Chinese Communist Party City Officials, Rapid Urbanization Leads To More Unnecessary Denials of Human Rights

November 15, 2016

BEIJING — The Chinese authorities said on Tuesday that they had executed a farmer convicted of killing a village official after the demolition of the farmer’s home, despite months of public outcry in sympathy with the farmer.

The execution of Jia Jinglong, 30, took place in Shijiazhuang, the capital of the northern province of Hebei. He was sentenced to death last November. On Tuesday, he was allowed a brief visit with his family, the state news agency Xinhua reported.

While Mr. Jia’s trial had focused on the brutal nature of the crime — he was found guilty of killing the official, He Jianhua, by shooting him in the back of the head with a nail gun — it was the demolition of Mr. Jia’s home that stirred anger among a public that saw it as yet another government snub against the powerless.

Mr. Jia’s three-story home was destroyed in May 2013 to make way for a new property development. According to Chinese news reports, his father had agreed to the demolition in exchange for compensation and a new apartment promised by local officials, but Mr. Jia refused to abide by the agreement. Nevertheless, the home was knocked down.

Shortly after the demolition, Mr. Jia’s planned wedding was canceled by his fiancée. Over the following months, Mr. Jia’s appeals to officials, citing his opposition to the demolition and what he said was insufficient compensation, went nowhere, his family said, and he snapped. On Feb. 19, 2015, he fatally shot Mr. He.

The murder and subsequent trial have been a reminder to many of the consequences of China’s rapid urbanization. The forced demolition of homes has been a leading cause of protests across the country in recent years. Dozens of farmers have set themselves alight in an extreme form of protest against the practice.

In a brief telephone interview before the execution, Mr. Jia’s older sister, Jia Jingyuan, said her brother was “also a victim.”


A construction site on the outskirts of Shijiazhuang in Hebei Province last month.Credit Nomaan Merchant/Associated Press

Forced demolitions have also exposed fault lines in China’s attempts to reform its judicial system, a topic that has gained traction in recent years amid rising social tensions. Chinese farmers, with limited education and at the bottom rung of the social ladder, often find the judicial system broken and discriminatory. Lawyers and scholars have taken notice.

An open letter to China’s Supreme Court, signed by 12 leading Chinese legal scholars and lawyers and posted online on Monday, argued that the court’s sentence glossed over local corruption and Mr. Jia’s contrition for his crime. It called the court’s determination of “basic facts” a “major mistake” and called for Mr. Jia’s life to be spared.

The letter said that the lack of a fair-minded judiciary allowed an “evil administration” to trample on residents’ rights, “creating countless incidents of mass petition and violence against law enforcement.”

Zhang Qianfan, a law professor at Peking University who signed the petition, said in a telephone interview that he was disheartened by the execution. “I think the Supreme Court had already made up its mind, and to reverse its stance is very hard despite the social backlash.”

People’s Daily, a newspaper controlled by the Communist Party, criticized the petition in an opinion piece published the day before the execution. It said that the court must not back down in the face of public anger and dismissed the letter as “biased” and detached from reality.

Despite official attempts to quell public anger over the execution, the outcry might have some impact on China’s death penalty system, William Nee, China researcher at Amnesty International, said in an email.

“The public got a rare peek into the opaque death penalty system,” he said, “and view how hard it is for lawyers to properly defend their clients, gain access to legal documents and evidence, and have their arguments taken into consideration.”

“The intense scrutiny of the court’s decision will most likely force judges to act with greater restraint in the future,” he added.


After taking the property from the citizens, the Chinese communist party often “overbuilt” mega cities that are still empty today….

Modeled after Manhattan, Conch Bay is a massive development project in northern China. But at least for now, it’s more ghost town than bustling metropolis.

Greg Baker/AFP/Getty Images