The government recently accused the founder of a pharmaceutical company for illegally conspiring to provide kickbacks to physicians who prescribe the company’s medications. The accusations led to the arrest of the entrepreneur. The government based the arrest on evidence the entrepreneur conspired to violate the Anti-Kickback Statute. If convicted, the crime can come with up to five years imprisonment and a monetary fine of $25,000.
Government explains allegations against successful entrepreneur: The accusations involve the use of a pain medication designed for use in cancer patients. The Department of Justice (DOJ) contends that instead of encouraging physicians to use this dangerous medication wisely, the founder used monetary awards to entice physicians to increase the frequency they prescribed the medication. In exchange for prescribing the medication made by his pharmaceutical company, the entrepreneur would allegedly provide physicians with kickbacks and other bribes.
This led to use of the medication in a manner that did not comply with the United States Food and Drug Administration’s (FDA) requirements.
Anti-Kickback violation just the beginning, government pursues additional charges: The DOJ also claims the business owner and his associates attempted to mislead insurance providers who questioned the frequency of the prescription.
In addition to Anti-Kickback Statute violations, the founder also faces criminal charges for alleged violations under the Racketeer Influenced and Corrupt Organization Act (RICO) and conspiracy to commit mail and wire fraud. Each violation can come with up to 20 years imprisonment and a $250,000 monetary penalty.
Government investigation can lead to many charges: The case provides an example of how an initial allegation by the government can snowball into a serious and life-threatening case. As such, anyone that is under investigation should seek legal counsel to help better ensure their legal rights are protected.