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FORMER ACONSULTANT MOHAMMED AZEEM SENTENCED TO SIX MONTHS

Executive Summary

FORMER ATI CONSULTANT MOHAMMED AZEEM SENTENCED TO SIX MONTHS in jail with the rest of a two-year sentence suspended for offering illegal cash gratuities to a number of FDA employees. Azeem was sentenced in Baltimore federal court on June 5. Azeem also received a five-year probation and $50 special assessment after pleading guilty to the illegal gratuities count. Jail time was warranted, Judge John Hargrove indicated, because of the number of FDA employees that Azeem tried to "corrupt." * With the June 7 court appearance of former FDA Consumer Safety Officer Jan Sturm (see following T&G), four FDAers and four generic drugs industry execs to date have been sentenced; Azeem is the fifth industry figure to plead guilty. Former ATI CEO and President Raju Vegesna's sentencing has been delayed from June 11 to sometime in July. Azeem, who pled guilty on March 16 to interstate travel in the aid of racketeering ("The Pink Sheet" March 19, T&G-3), was sentenced on that count to a suspended sentence and five-year probation, which will be served concurrently with the other probationary period, and another $50 special assessment. The former consultant to American Therapeutics was also commanded by Judge Hargrove to perform 500 hours of community service. No fines were assessed. Although only charged with one count of paying illegal gratuities, he attempted to pay or did pay a number of FDA employees. Azeem's prime recipient was former FDA review chemist Charles Chang. He also attempted to pay Generic Drug Division consumer safety officer Harvey Greenberg and FDA generic review chemist Bart Ho. Both testified in the case against Azeem. The interstate travel as aid to racketeering charge grew out of a 1987 around-the-world trip taken by Azeem and Chang and ATI's Vegesna, with expenses paid by Azeem's consulting firm Pharmagen. That firm was paid over $430,000 by ATI, with some of the funds going to the illegal gratuities, but most being paid out by Azeem for Vegesna's personal use. Additionally, Azeem was paid a $1,500 per month fee by Vegesna for work as a consultant. At the sentencing hearing, First Assistant U.S. Attorney Gary Jordan asked the court to incarcerate Azeem for his crimes for two reasons. Jordan argued that the number of attempted or successful payments made to FDA employees belies Azeem's assertions that he was an unwitting conduit for Vegesna's schemes. Jordan said Azeem did not cooperate with the investigation, and that every time the Maryland U.S. Attorney's Office approached an agreement with Azeem, some "new revelation from some outside source, not Mr. Azeem" would come to light. Azeem's attorney, David Curtain, pleaded with Judge Hargrove not to jail his client because of Azeem's poor health. Azeem, 41, received a kidney transplant in October 1986 and is on medication for his failing transplant. Curtain also maintained that Azeem himself "did not profit" from his activities and that the actual dollar amounts of the illegal gratuities were small compared to others in the generics investigation. Judge Hargrove disagreed about Azeem's profits, stating "the evidence does show clearly that he did clearly profit." However, the "most serious aspect of the case," he said, was the wide number of government employees -- five or six -- contacted by Azeem. "He covered the field" and there was a "clear attempt by him to knowingly corrupt a great number of people" at FDA, the judge declared. Judge Hargrove also pointed out that Azeem's health problems began before he became involved in the generic drug scandal and were "not an excuse to get involved in criminal activity" or reason to be "excused" for his participation, he said. Azeem participated "with his eyes open" and "knew what this money [from Vegesna] was for," the judge said. Nonetheless, in pronouncing his sentence, the judge did say Azeem could spend his six-month jail term in a halfway house if no other federal penal facility could be found that could provide the required health care. He gave the U.S. Attorney's Office 45 days to find a facility in New York state. Azeem lives on Long Island.

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