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Executive Summary

President and Treasurer Raj Bhutani and Corporate Secretary and Quality Control Labs Director Neelam Bhutani plead not guilty in Chicago federal court to charges of entering a criminal conspiracy and to specific charges of mail fraud, wire fraud and violations of the FD&C Act. The 15-count indictment, announced Jan. 26, supercedes a five-count indictment handed down last August ("The Pink Sheet" Aug. 30, 1993, p. 19). If convicted on all counts, Raj Bhutani faces up to 62 years imprisonment and a fine of up to $3.75 mil., Neelam Bhutani could be sentenced to 52 years and the Gurnee, Ill.-based company could be fined $7.5 mil. Allegations in the new indictment include: that Alra collected an insurance claim on contaminated batches of lactulose syrup but produced and shipped finished product anyway; that Alra collected Illinois state employee training funds but did not provide promised training to its employees; that Alra offered money to a consultant to certify falsely to FDA that he had provided training to its employees; and that the Bhutanis instructed employees to lie to the grand jury investigating the company

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