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Executive Summary

ATI CONSULTANT MOHAMMED AZEEM WILL BE SENTENCED ON APRIL 23 in Maryland Federal Court, following a March 16 guilty plea to one count of interstate travel in aid of racketeering and one count of offering an illegal gratuity to an FDA employee. Azeem faces maximum penalties of five years incarceration and a $250,000 fine on the racketeering count and two years incarceration and a$250,000 fine on the gratuity count, according to a March 16 release by the Maryland U.S. Attorney's Office. Although Azeem pleaded guilty to only one count of giving an illegal gratuity, the American Therapeutics consultant apparently bribed or attempted to bribe FDA employees on numerous occasions. Generic Drugs Division consumer safety officer Harvey Greenberg and FDA generic review chemist Bart Ho testified that Azeem had left envelopes with thousand of dollars on their desks. Ho testified that Azeem offered him $4,000 to grant a first ANDA approval to ATI for maprotiline hydrochloride (Ciba-Geigy's Ludiomil). Ho said Azeem told him "it was okay to take the money and that no one would find out," because he had given money to FDA employees "many times before." The prime recipient of Azeem's illegal gratuities was FDA review chemist Charles Chang. Along with former ATI President and CEO Raju Vegesna, Azeem and Chang embarked in 1987 on a nine-day trip around the world, with expenses paid by Azeem's consulting firm Pharmagen. Expenses for Chang alone were almost $4,000. Vegesna also gave illegal gratuities to Chang and paid $20,000 to former Generic Drug Division CSO Jan Sturm ("The Pink Sheet" March 5, p. 6). All of the illegal activities, documented by the U.S. attorney's release, apparently took place after Azeem had left his position at the generic firm Superpharm where he was VP-operations. In early 1987, Azeem joined Integrated Genetics and set up Pharmagen Consulting, Inc. Between 1987 and 1988, ATI paid over $430,000 to Pharmagen, $400,000 of which Azeem was directed to use to purchase a sports car for Vegesna's daughter and to put a down-payment on Vegesna's new home. Some of the remaining money received from ATI was used to pay illegal gratuities to the FDA employees, according to the press release. American Therapeutics will be arraigned on March 30 in Baltimore federal court on one count of use of interstate facilities in aid of racketeering. Jan Sturm is also scheduled for arraignment on March 30. Vegesna is expected to plead guilty at his arraignment on April 2 to two counts of "interstate travel or use of interstate facilities in aid of racketeering" for providing money to Azeem's consulting firm and sending furniture and computer equipment to Chang's house.

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