Former Valeant and Philidor executives plead not guilty in fraud scheme
MONTREAL — A former executive with Valeant Pharmaceuticals and the head of a defunct U.S. mail-order pharmacy pleaded not guilty Thursday to conspiring to defraud the Quebec-based drug giant through a multimillion-dollar kickback scheme.
A lawyer for Gary Tanner, 39, a former executive at Valeant (TSX:VRX) confirmed that his client and former Philidor Rx Services CEO Andrew Davenport, 48, entered the pleas in the U.S. District Court in Manhattan.
The pair were arrested last November and each charged with four counts, including wire fraud, conspiracy to commit wire fraud and conspiracy to commit money laundering.
Investigators allege that both accused conspired to obtain tens of millions of dollars from Valeant and split the proceeds.
In a 28-page complaint, FBI special agent Ryan Redel alleged that Davenport paid Tanner about US$10 million in secret kickbacks. The complaint said that money was laundered through shell companies and came from a US$40 million payout Tanner received from Valeant.
The men are alleged to have used the proceeds to buy second homes, pay debts and make investments — and in one case, Davenport spent US$50,000 for the installation of a custom wine cellar, according to the complaint.
Tanner’s lawyer Howard Shapiro declined to comment but has previously said his client was innocent and regularly communicated with his Valeant bosses about his efforts to grow the company.
Davenport’s lawyer and Valeant could not immediately be reached for comment.
Valeant was once Canada’s largest firm by market capitalization. But its reputation has taken a beating since its affiliation with Philidor, a Pennsylvania-based mail-order pharmacy that mainly distributed some of Valeant’s specialty drugs, was disclosed.
The company cut its ties with Philidor in October of 2015 and three months later, Philidor ceased operations.
The Canadian Press
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