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On July 18, 2019, a federal grand jury in Cincinnati indicted the former compliance officer of a pharmaceutical distributor, James Barclay, the pharmaceutical distributor, and others with conspiring to illegally distribute controlled substances. Among other things, the indictment alleged that Barclay, who was responsible for supervising the distributor’s compliance with drug laws, and others sold millions of painkiller pills to pharmacies, while regularly exceeding the company’s internal threshold limits and ignoring obvious signs of diversion and abuse. When the company’s internal suspicious order monitoring system flagged many of these orders, Barclay and other defendants allegedly failed to conduct any due diligence or report the suspicious orders to the Drug Enforcement Administration (DEA), as required by law. The Barclay indictment was issued around three months after federal prosecutors in Manhattan brought felony criminal charges against a different drug distributor, its former Chief Compliance Officer (CCO), William Pietruszewski, and others on allegations that they opened new customer accounts without conducting due diligence and sold customers controlled substances despite knowing they were being distributed for illegitimate purposes. On April 19, 2019, Pietruszewski pleaded guilty to conspiracy to distribute controlled substances, conspiracy to defraud the U.S., and willful failure to file suspicious order reports with the DEA.
By Paige Ammons and Preston Burton
In any investigation where a client is deposed or interviewed by a government agent, experienced lawyers should be wary of potential false statement liability and likely will have advised their clients of the paramount need to be truthful. Voluntary communications, initiated by a company or individual, with government officials are of a different ilk, however
Part Two of a Two-Part Article
In Part One of this article last month, we discussed several of the key business crimes cases from the recently concluded October Term 2018. We resume this discussion in Part Two of our article and offer some concluding thoughts about where the Court may go next in the years to come.
By Michael J. Rivera and Abby I. Yi
Cybersecurity has been a high priority topic for the SEC the past few years. In September 2017, the SEC created a Cyber Unit within its Enforcement Division. This Cyber Unit had over 225 active investigations at the SEC’s 2018 fiscal year end. The SEC has focused in particular on cybersecurity risks facing public companies.
By Juliet Gunev
Maryland’s Largest Ever Ponzi-Scheme: Kevin Merrill Sentenced to 22 Years in Prison for $396 Million Consumer Debt Fraud