After Hong “Rose” Carson allegedly flushed some documents down a toilet during her employer’s internal investigation of potential FCPA offenses, the DOJ charged her with obstructing an investigation within the jurisdiction of a federal agency. The former sales director faces up to 20 years in prison if convicted.
Could a company lawyer face the same charge? Absolutely.
It hasn’t happened yet in an FCPA case. But a company lawyer has been indicted on the same charge for allegedly misleading the FDA and withholding evidence, and then lying about it.
Although FDA compliance is outside our usual topic, there’s a chilling warning here and in the Carson case to company lawyers who may become involved in FCPA investigations.
FOR IMMEDIATE RELEASE
Tuesday, November 9, 2010
WASHINGTON – An attorney for a major pharmaceutical company was charged with obstruction and making false statements, the Justice Department announced today. Lauren Stevens of Durham, N.C., was charged with one count of obstructing an official proceeding, one count of concealing and falsifying documents to influence a federal agency, and four counts of making false statements to the Food and Drug Administration (FDA).
The indictment states that in October 2002, the FDA asked for information about the company’s promotion of a prescription drug, as part of an inquiry into whether the drug was being promoted for uses that had not been approved by the FDA. Data demonstrating a drug’s safety and efficacy for a particular use is required for FDA approval. Federal law prohibits the marketing or promotion of drugs for unapproved – or “off-label” – uses.
The indictment alleges that, in response to the FDA’s inquiry, Stevens signed and sent a series of letters from the company to the FDA that falsely denied that the company had promoted the drug for off-label uses, even though she knew, among other things, that the company had sponsored numerous programs where the drug was promoted for unapproved uses. The indictment alleges that Stevens knew that the company had paid numerous physicians to give promotional talks to other physicians that included information about unapproved uses of the drug. According to the indictment, the company paid one such physician to speak at 511 promotional events in 2001-2002 and another physician to speak at 488 such events during that time period.
The indictment also alleges that Stevens did not provide the FDA with slide sets used by the physicians who were paid by the company to promote the drug, even though the FDA had asked for the slide sets and Stevens had previously promised to obtain and provide the FDA with such materials. The indictment alleges that a legal memorandum was prepared for Stevens that set forth the “pros” and “cons” of producing the slide sets to the FDA. According to the indictment, one of the “cons” was that the slide sets would provide “incriminating evidence about potential off-label promotion of [the drug] that may be used against [the company] in this or in a future investigation.” Instead of providing the requested slide sets to the government, Stevens represented that the company’s responses to the FDA’s requests was “final” and “complete.” . . .
“There is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth,” said Carmen Ortiz, U.S. Attorney for the District of Massachusetts. “Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts.” . . .
Each of the obstruction charges carries a maximum penalty of 20 years in prison. Each of the false statement counts carry a maximum penalty of five years in prison. Charges contained in the indictment are simply accusations, and not evidence of guilt. . . .
The pharmaceutical company for whom Stevens worked has not been charged with a crime and was not identified in the indictment.
The DOJ’s November 9, 2010 release can be viewed in full here.