Business Crimes Hotline

AstraZeneca Pharmaceuticals LP, a major pharmaceuticals manufacturer headquartered in Wilmington, DE, pleaded guilty in Wilmington's federal district court to conspiring to violate the Prescription Drug Marketing Act (PDMA). The company agreed to pay $355 million to resolve criminal charges and civil liabilities in connection with pricing and marketing practices regarding Zoladex, a drug sold by AstraZeneca and used primarily for the treatment of prostate cancer. AstraZeneca also agreed to comply with the terms of a corporate integrity agreement that ensures, among other things, that the company will report to the Medicare and Medicaid programs the average sale price for drugs reimbursed by those programs.

From January 1991 through December 31, 2002, employees of AstraZeneca allegedly provided thousands of free samples of Zoladex to physicians, knowing and expecting that certain of them would prescribe and administer the free samples to their patients and then bill the patients, Medicare, Medicaid, or other federally funded insurance programs for those samples. During that same period, AstraZeneca allegedly offered and paid illegal remuneration in various forms such as free Zoladex, unrestricted grants, business assistance grants and services, travel and entertainment, consulting services, and honoraria.

The investigation into AstraZeneca commenced after the filing of a civil False Claim Act suit by Douglas Durand, who was employed as the Vice President of Sales for TAP Pharmaceutical Products, Inc., the manufacturer of the prostate cancer drug Lupron. In October 2001, TAP agreed to pay $875 million to resolve civil and criminal liabilities in connection with its pricing and marketing of Lupron.

Tyson Pleads Guilty to Violating Clean Water Act

Tyson Foods Inc., the world's largest meat producer, pleaded guilty in federal court in Kansas City to 20 felony violations of the federal Clean Water Act at its Sedalia, MO, poultry plant, and agreed to pay $7.5 million to the United States and the State of Missouri. Under the plea agreement, Tyson admitted to having illegally discharged untreated wastewater from its poultry processing plant near Sedalia into a tributary of the Lamine River. Tyson also agreed to a consent judgment between it and the Missouri Attorney General's Office that resolves allegation of state environment violations over the same discharges.

Under the one plea agreement, Tyson agreed to pay a $5.5 million penalty to the federal government, $1 million penalty to the state, and $1 million to the Missouri Natural Resources Protection Fund to help remedy the alleged harm caused by the illegal discharges.  In addition, Tyson has agreed to hire an outside consultant to perform an environmental audit and then to implement an enhanced environmental management program based upon the audit's findings to assure that the Sedalia facility will remain in compliance with all applicable environmental laws and regulations.

According to the allegations, between 1996 and 2001, Tyson repeatedly discharged untreated or inadequately treated wastewater from its Sedalia plant in violation of its permit. The Missouri Department of Natural Resources cited the plant several times, and the State of Missouri filed two lawsuits against Tyson in an effort to stop its allegedly illegal discharges. Tyson allegedly continued to discharge untreated wastewater through its storm drains, despite the company's assurances that the discharges would stop, and after receiving numerous warnings, administrative orders, two state court injunctions, and the execution of a federal search warrant at the Sedalia facility.

Former DuCoa Executive Charged with Price Fixing

Daniel T. Rose of Highland, IL, the former president of DuCoa, L.P., was indicted by a federal grand jury in Dallas for allegedly participating in a nationwide conspiracy to fix prices, rig bids, and allocate customers in the choline chloride industry. Choline chloride, commonly known as vitamin B4, is sold by manufacturers and resellers to customers in the animal nutrition industry, where it is administered to animals to ensure their proper growth and development.

According to the indictment, Rose allegedly agreed with his co-conspirators to suppress and eliminate competition in the choline chloride market in the United States from approximately August 1997 through September 29, 1998. Rose is charged with participating in meetings and conversations with his co-conspirators to discuss the prices and volume of choline chloride, agreeing to set choline chloride prices, agreeing to allocate choline chloride customers, and rigging bids for contracts to supply choline chloride. He is charged with violating Section One of the Sherman Act, which carries a maximum penalty of 3 years in prison and a fine of $350,000. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.

AstraZeneca Pharmaceuticals LP, a major pharmaceuticals manufacturer headquartered in Wilmington, DE, pleaded guilty in Wilmington's federal district court to conspiring to violate the Prescription Drug Marketing Act (PDMA). The company agreed to pay $355 million to resolve criminal charges and civil liabilities in connection with pricing and marketing practices regarding Zoladex, a drug sold by AstraZeneca and used primarily for the treatment of prostate cancer. AstraZeneca also agreed to comply with the terms of a corporate integrity agreement that ensures, among other things, that the company will report to the Medicare and Medicaid programs the average sale price for drugs reimbursed by those programs.

From January 1991 through December 31, 2002, employees of AstraZeneca allegedly provided thousands of free samples of Zoladex to physicians, knowing and expecting that certain of them would prescribe and administer the free samples to their patients and then bill the patients, Medicare, Medicaid, or other federally funded insurance programs for those samples. During that same period, AstraZeneca allegedly offered and paid illegal remuneration in various forms such as free Zoladex, unrestricted grants, business assistance grants and services, travel and entertainment, consulting services, and honoraria.

The investigation into AstraZeneca commenced after the filing of a civil False Claim Act suit by Douglas Durand, who was employed as the Vice President of Sales for TAP Pharmaceutical Products, Inc., the manufacturer of the prostate cancer drug Lupron. In October 2001, TAP agreed to pay $875 million to resolve civil and criminal liabilities in connection with its pricing and marketing of Lupron.

Tyson Pleads Guilty to Violating Clean Water Act

Tyson Foods Inc., the world's largest meat producer, pleaded guilty in federal court in Kansas City to 20 felony violations of the federal Clean Water Act at its Sedalia, MO, poultry plant, and agreed to pay $7.5 million to the United States and the State of Missouri. Under the plea agreement, Tyson admitted to having illegally discharged untreated wastewater from its poultry processing plant near Sedalia into a tributary of the Lamine River. Tyson also agreed to a consent judgment between it and the Missouri Attorney General's Office that resolves allegation of state environment violations over the same discharges.

Under the one plea agreement, Tyson agreed to pay a $5.5 million penalty to the federal government, $1 million penalty to the state, and $1 million to the Missouri Natural Resources Protection Fund to help remedy the alleged harm caused by the illegal discharges.  In addition, Tyson has agreed to hire an outside consultant to perform an environmental audit and then to implement an enhanced environmental management program based upon the audit's findings to assure that the Sedalia facility will remain in compliance with all applicable environmental laws and regulations.

According to the allegations, between 1996 and 2001, Tyson repeatedly discharged untreated or inadequately treated wastewater from its Sedalia plant in violation of its permit. The Missouri Department of Natural Resources cited the plant several times, and the State of Missouri filed two lawsuits against Tyson in an effort to stop its allegedly illegal discharges. Tyson allegedly continued to discharge untreated wastewater through its storm drains, despite the company's assurances that the discharges would stop, and after receiving numerous warnings, administrative orders, two state court injunctions, and the execution of a federal search warrant at the Sedalia facility.

Former DuCoa Executive Charged with Price Fixing

Daniel T. Rose of Highland, IL, the former president of DuCoa, L.P., was indicted by a federal grand jury in Dallas for allegedly participating in a nationwide conspiracy to fix prices, rig bids, and allocate customers in the choline chloride industry. Choline chloride, commonly known as vitamin B4, is sold by manufacturers and resellers to customers in the animal nutrition industry, where it is administered to animals to ensure their proper growth and development.

According to the indictment, Rose allegedly agreed with his co-conspirators to suppress and eliminate competition in the choline chloride market in the United States from approximately August 1997 through September 29, 1998. Rose is charged with participating in meetings and conversations with his co-conspirators to discuss the prices and volume of choline chloride, agreeing to set choline chloride prices, agreeing to allocate choline chloride customers, and rigging bids for contracts to supply choline chloride. He is charged with violating Section One of the Sherman Act, which carries a maximum penalty of 3 years in prison and a fine of $350,000. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either of those amounts is greater than the statutory maximum fine.