Former executives from Valeant Pharmaceuticals International and Philidor Rx Services have been sentenced to jail time for a secret kickback scheme.
Gary Tanner, who was an executive at Valeant, and Andrew Davenport, the former chief executive at Philidor, each received one-year sentences and were ordered to pay back $9.7 million for fraud.
According to prosecutors, Tanner was instrumental in pushing Valeant’s $133 million takeover of Philidor when it was a start-up mail-order pharmacy. After the deal, Davenport received about $44 million, part of which he wired to Tanner using offshore accounts. Prosecutors also accused Tanner of driving Valeant business to the now defunct Philidor.
Tanner allegedly kept his ties to Philidor a secret and used an email account under the name “Brian Wilson” to communicated with Davenport.
In May, both men were convicted for four charges including conspiracy to commit money laundering. Prosecutors had sought longer jail times for both defendants, calling their crimes “insidious.”
Valeant has now changed its name to Bausch Health Cos. So far, this case is the first conviction related to the multiple criminal probes into deceptive business practices by executives at Valeant. Last year a mutual fund firm filed a securities fraud lawsuit against Valeant, saying that it bought the company’s debt securities at an inflated priced based on misinformation given by Valeant.
Read the full Bloomberg report.