Former Valeant Pharmaceuticals International Inc. executive Gary Tanner was sentenced to a year and a day in prison for taking a US$10 million bribe to manipulate the company into buying a mail-order pharmacy.
U.S. District Judge Loretta Preska handed down the sentence on Tuesday in Manhattan. Ex-Philidor Rx Services LLC Chief Executive Officer Andrew Davenport, who paid the kickback to Tanner, got the same sentence. Both men were convicted by a jury in May.
-The fraud and money-laundering case, filed in 2016, helped explain how Valeant became linked to Philidor, which the pharmaceutical giant secretly controlled and used to increase sales. Valeant disclosed the link in 2015, sparking questions about its transparency and business model.
-The relationship between the two companies was kept under wraps but Valeant nevertheless sought business with other mail-order pharmacies, only to be undermined by Tanner’s secret effort to keep competitors at bay and drive up Philidor’s value for a takeover, the U.S. said.
-Valeant had agreed to pay Philidor US$133 million in 2014 for an option to buy the mail-order pharmacy. The deal gave Davenport a US$40 million windfall, a quarter of which was secretly funneled to Tanner through offshore accounts the men set up.
-Tanner has until Jan. 31 to turn himself in, allowing him to spend the holidays with family.
Comments in Court
-“I think about why I didn’t disclose these payments every day,” Tanner, 41, said, speaking through tears. “I’m truly sorry for not disclosing my financial interest.”
-Tanner’s wife told the judge she was “begging” for leniency on behalf of the couple’s two children. His sister said “any time in jail could be a life sentence,” prompting many in court to weep.
“I deeply regret giving money to Gary Tanner,” Davenport said in a brief statement.