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 John Kapoor, who stepped down as chief executive of Insys in
January, was among 80 people prosecutors described as unindicted
co-conspirators in an exhibit filed by prosecutors last week in
federal court in Boston.
"He's done nothing wrong, he hasn't been charged, and he's made
extensive efforts to improve the situation at the company," said
Kapoor's lawyer, Brian Kelly, at the law firm Nixon Peabody.
Kelly said his client's inclusion on the list was a "meaningless
evidentiary tactic" to enable prosecutors to introduce statements
made by Kapoor at the trial of former CEO Michael Babich and the
other five defendants.
An unindicted co-conspirator is someone prosecutors claim
participated in a criminal scheme but who has not been charged.
Reasons can include insufficient evidence, pragmatic concerns, a
person's cooperation or evidentiary strategy, according to Robert
Bloom, a professor at Boston College Law School.
A spokesman for the U.S. Attorney's Office declined to comment.
Chandler, Arizona-based Insys declined to comment for this article.
Amid a national opioid epidemic, Subsys, an under-the-tongue
fentanyl-based spray made by Insys and intended for cancer patients,
has become the focus of several federal and state investigations.
Federal prosecutors claim Babich and the other defendants
participated in a scheme to pay doctors speaker fees in exchange for
prescribing Subsys and to mislead insurers into paying for the drug
even when it was prescribed to non-cancer patients.
Besides Babich, the defendants include former Insys Vice Presidents
Alec Burlakoff and Michael Gurry; former national sales director
Richard Simon; and former regional sales directors Sunrise Lee and
Joseph Rowan.
All six have pleaded not guilty. They are scheduled to face trial in
October 2018.
Lee's lawyer declined to comment. Attorneys for the other defendants
did not respond to requests for comment.
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Insys has previously said that it has taken steps to strengthen its
compliance program amid probes related to former employees. It has
also stressed that Subsys represented less than 1 percent of all
opioid prescriptions in 2016.
Insys has also disclosed that it is in talks with the U.S. Justice
Department to reach a settlement.
Kapoor's name appeared in an exhibit attached to a motion filed by
prosecutors on Sept. 6, which asked a judge to weigh in on whether
one of the defendant's lawyers had a potential conflict of interest.
The exhibit, a Feb. 2 letter prosecutors sent to defense lawyers,
was later sealed, but Reuters viewed it while it was publicly
available.
Kapoor, who founded Insys in 2002 and remains a board member,
stepped down in January as the company's chairman and chief
executive, a role he took on in November 2015.
He is currently the chairman of drugmaker Akorn Inc and president of
investment firm EJ Financial Enterprises Inc.
In addition to the Boston case, charges have been filed against
former Insys employees and medical practitioners by federal
prosecutors in states including Alabama, New York and Connecticut.
(Reporting by Nate Raymond in Boston; Editing by Noeleen Walder and
Jonathan Oatis)
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