John Kapoor, who stepped down as Insys' chief executive officer and
chairman in January but remains the majority shareholder, was
charged last month with engaging in conspiracies to commit
racketeering, mail fraud and wire fraud.
Brian Kelly, a lawyer for Kapoor, said on Monday that his client
would plead not guilty. In court papers filed ahead of the hearing,
lawyers for Kapoor, 74, called the allegations against the
billionaire "thin, vague and conclusory."
Kapoor's arrest in Phoenix on Oct. 26 came as U.S. authorities have
been fighting a national opioid addiction epidemic that the U.S.
Centers for Disease Control and Prevention linked to more than
33,000 deaths in 2015, the latest year for which statistics are
The charges marked a major escalation of probes centered on
Chandler, Arizona-based Insys' flagship product Subsys, an
under-the-tongue spray that contains fentanyl, an addictive
Following Kapoor's arrest, Insys on Oct. 29 announced he had
resigned from its board and it had recorded $150 million as its best
estimate for the minimum amount it would have to pay to settle the
U.S. Department of Justice probe.
Kapoor, who founded Insys in 2002, was charged in an indictment that
added him as a defendant in a case against six former Insys
executives and managers, including ex-CEO Michael Babich, who were
initially charged in December 2016.
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The indictment said that, beginning in 2012, Kapoor, Babich and
others devised a scheme to pay speaker fees and other bribes to
medical practitioners to prescribe Subsys and to defraud insurers
into approving payment for it.
Federal charges have also been filed in several other states against
other ex-Insys employees and medical practitioners who prescribed
Insys also faces lawsuits by attorneys general in Arizona and New
Jersey. It previously paid $9.45 million to resolve investigations
by attorneys general in Oregon, New Hampshire, Illinois and
(Reporting by Nate Raymond in Boston; Editing by David Gregorio)
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