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Executive Summary

MY-K LABS FOUNDER KUN CHAE BAE SENTENCED TO THREE MONTHS WORK RELEASE, three years probation, and a fine of $25,000 on Dec. 13 in Baltimore federal court. Judge John Hargrove handed down a one-year sentence but suspended all except three months and a requirement for 1,000 hours of community service. In April, Bae pleaded guilty to one count of making illegal payments totaling $30,000 to former FDA Division of Generic Drugs Branch Chief Charles Chang and to one count of giving a $500 gift certificate for a department store, a video cassette recorder, and two trips to Chicago to Joseph Maselli, a buyer for the Medical Directorate at the Defense Personnel Support Center in Philadelphia ("The Pink Sheet" April 23, In Brief). Initially, Bae also had been charged with one count of interstate travel in aid of racketeering in connection with a payment of $10,000 to Chang. The former generic drug industry official could have received a maximum penalty of five years of incarceration and a $250,000 fine on the racketeering charge, and two years in jail and a$250,000 fine for the gratuities given to Maselli. Bae received a much less severe sentence because he cooperated with Maryland's U.S. Attorney's Office by testifying against former FDA Division of Generic Drugs Director Marvin Seife. Seife was convicted of two counts of perjury related to statements made to government investigators about meals accepted from industry. Each count carries a maximum penalty of five years in jail; federal sentencing guidelines call for a minimum of 12 to 18 months ("The Pink Sheet" Nov. 5, p. 3). In issuing Bae's sentence on Dec. 13, Hargrove told Bae that "your full cooperation is being rewarded." The judge said that he gave Bae credit "for complete honesty" during the trial. First Assistant U.S. Attorney Gary Jordan stated that Bae had "lived up to his end of the bargain" by cooperating in the Seife trial, and that by testifying Bae was providing "a community service." Jordan said that Bae had demonstrated three attributes of an ideal witness for the prosecution by his "efforts to help us out without complaint," by providing "thorough attention to areas of interest to the government," and by demonstrating "complete candor" in describing his wrongdoing. Assistant U.S. Attorney Geoffrey Garinther, who was a prosecutor in Seife's trial, pointed out that of the 14 defendants who have come before the court so far in the generics investigation, Bae's cooperation "is probably the greatest" because of his testimony against Seife. Garinther noted that Bae had traveled, at his own expense, to Baltimore from Chicago on at least two occasions to cooperate in Seife's trial. At the trial, Bae testified that he had a Dec. 11, 1987 lunch with Seife and former Warner-Lambert VP-Regulatory Affairs Milton Kaplan. In a sworn statement to investigators, Seife had denied having lunch with Bae and Kaplan. Bae's testimony about the lunch gave the prosecution the basis to speculate that Seife tried to conceal the truth about the meal because he knew it had the appearance of a bribe. Bae said that at the lunch the three talked about a reorganization plan for the generics division that theoretically would have elevated Seife's position at FDA. On the negative side, Jordan pointed out that Bae's misconduct did not involve just "a single isolated event," but that he violated the law on several occasions. He said that Bae should be punished with some term of incarceration for this conduct but that any sentences should run concurrently. Hargrove emphasized that he had to give Bae some kind of sentence so that people will know "that something is going to happen" if they break the law. According to the judge, Bae contributed to the corruption of the generic industry, and that "I have to weigh you against the public interest."

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