Pink Sheet is part of the Business Intelligence Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. For high-quality copies or electronic reprints for distribution to colleagues or customers, please call +44 (0) 20 3377 3183

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

FORMER BOLAR CEO SHULMAN SENTENCED TO FIVE YEARS IN NAIL AND $1.25 MIL. FINE ON FIVE COUNTS OF FRAUD AND ONE COUNT OF FIXING GENERIC DYAZIDE PRICES

Executive Summary

Robert Shulman, former president and CEO of Bolar, will serve up to five years in prison and pay a $1.25 mil. Fine on five counts of fraud and an antitrust violation under sentencing imposed Jan. 22 by Baltimore federal court Judge John Hargrove. The five-year jail term represents concurrent sentences for the five fraud counts, four of which carry 60 months each and one seven months. The antitrust conviction carries a term of 21 months. After time served, Shulman will be subject to two years of supervised release. Shulman, 59, was fined $250,000 for each of the five counts and $20,000 for the antitrust violation, which was made concurrent with the five counts. He was fined an additional $300 in special assessments. "I'm truly, truly sorry," Shulman told the judge, saying that he "feels a great deal of regret" for his acts. Shulman added that he did what he needed to do "to save and protect" Bolar. The ex-Bolar chief pled guilty in November 1991 to five counts of conspiracy to defraud FDA, wire fraud, false statements to FDA and obstruction of an agency investigation relating to the development and approval of Bolar's generic drug products ("The Pink Sheet" Nov. 11, 1991, p. 17). To gain approval for some of its products, including its generic version of SmithKline Beecham's Dyazide, Bolar submitted the brandname drugs for bioequivalence testing instead of its generic versions. In December 1992, Shulman was charged with conspiring with others to fix the prices of generic Dyazide ("The Pink Sheet" Dec. 14, 1992, T&G-5). The former generic drug exec must report on March 15 to a federal minimum security corrections facility. Shulman's lawyer, Benito Romano (New York City firm Willkie, Farr & Gallagher), requested that Shulman be placed in a facility near his home in Centerport, N.Y. Maryland First Assistant U.S. Attorney Gary Jordan asked that Shulman be made to put up property as insurance that he will report to U.S. marshals in March. Judge Hargrove decided that Shulman should be released on personal recognizance and sign an unsecured bond worth $100,000. In imposing the sentence, Hargrove took into consideration Shulman's cooperation in both the fraud and antitrust investigations. Justice Department Antitrust Division attorney Jim Shalleck said that Shulman had been "fully cooperative" in the price-fixing investigation. His testimony resulted in the felony indictment of Bolar and its most recent ex-president Lawrence Raisfeld and Vitarine and its president Roger Jordan ("The Pink Sheet" Dec. 21, 1992, p. 17). Shalleck said there is a continuing national investigation of price-fixing in the general drug industry. The Dec. 17 indictment charged that during February 1988 through April 1989, the defendants agreed to a range of prices at which Bolar and Vitarine would sell generic Dyazide to various customers and entered into an "exclusivity" agreement with a contract testing lab in Maryland to eliminate competition in the sale of generic Dyazide. Bolar and Vitarine had contracts with the Baltimore testing lab PharmaKinetics. In handing down the sentence, Hargrove said that Bolar had sold over $200 mil. Worth of unapproved drugs by the time Shulman left the company in January 1990. Hargrove noted that Shulman and Bolar made the most money to date of those involved in the generic drug scandal. Addressing Shulman, Hargrove said when millions were involved, Shulman "became greedy" and wanted to keep the money coming in. The judge said that Shulman and former Bolar ex-VP Jacob Rivers' strong-arming of former PharmaKinetics exec Mark Perkal into covering up the generic Dyazide switch at the testing lab "ruined [Perkal's] life." Rivers was sentenced to four years imprisonment and fined $1 mil. In July 1992 ("The Pink Sheet" July 13, 1992, T&G- 5). Perkal received four months home detention and was fined $10,000 in July 1992.
Advertisement
Advertisement
UsernamePublicRestriction

Register

PS022054

Ask The Analyst

Please Note: You can also Click below Link for Ask the Analyst
Ask The Analyst

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel