Insys founder convicted of bribing doctors to prescribe opiates

Yahoo – AFP, May 3, 2019

Almost 400,000 people have died from overdoses involving prescription or illicit
opioids over the past two decades, according to the CDC (AFP Photo/ALEX WONG)

New York (AFP) - The founder of Insys Therapeutics on Thursday became the first head of a major US pharmaceutical to be convicted of bribing doctors to prescribe addictive painkillers blamed for fueling an opioid crisis that has claimed tens of thousands of lives.

John Kapoor, 76, was found guilty of criminal conspiracy, along with four other former executives of the Arizona-based firm.

The former billionaire and his co-defendants, including regional sales director Sunrise Lee, a former stripper, face up to 20 years in prison, and will be sentenced at a later date.

Two other executives pleaded guilty and testified at the trial in Boston which lasted a little over two months.

"Today's convictions mark the first successful prosecution of top pharmaceutical executives for crimes related to the illicit marketing and prescribing of opioids," federal prosecutor Andrew E. Lelling said in a statement.

"Just as we would street-level drug dealers, we will hold pharmaceutical executives responsible for fueling the opioid epidemic by recklessly and illegally distributing these drugs, especially while conspiring to commit racketeering along the way," he said.

In 2017, President Donald Trump declared the opioid crisis a national public health emergency.

Almost 400,000 people have died from overdoses involving prescription or illicit opioids over the past two decades, according to the Centers for Disease Control and Prevention. Nearly 48,000 people died in 2017 alone from opiate overdose.

Chart showing US drug overdose death rates by opioid category, source 

of opioids and how it works (AFP Photo/Gal ROMA)

"This is a landmark prosecution that vindicated the public's interest in staunching the flow of opioids into our homes and streets," Lelling said.

To increase sales of their fentanyl spray Subsys, a painkiller 50 to 100 times stronger than morphine, Insys executives set up a system of large-scale bribes.

Between 2012 and 2015, they paid health professionals to prescribe large quantities of the highly addictive drug, which was approved to alleviate severe pain in terminal cancer patients.

Doctors were encouraged to recommend the spray to patients who did not need it and also in excessive doses.

Officially, the bribes were paid as fees to doctors speaking at seminars for health professionals to praise the benefits of the drug.

The company's aggressive marketing tactics reportedly also included sales representatives making a rap video to promote the drug.

In some years, Insys paid more than $10 million in bribes in this way. The heads of the firm also set up a scheme to mislead health insurance companies to reimburse patients for the costs of the drug.

According to Insys' annual report, Subsys sales reached $329.5 million in 2015.

The group went public in 2013. Kapoor resigned from the board in October 2017, a few days after his indictment.

US pharma bosses charged with fueling opioid crisis

Yahoo – AFP, April 24, 2019

A 5 milliliter dose of liquid oxycodone, a medicine at the epicenter of the US opioid
crisis that has claimed tens of thousands of lives (AFP Photo/EVA HAMBACH)

New York (AFP) - Two former executives of a major US pharmaceutical company were charged Tuesday with fulfilling orders they knew to be fraudulent during the opioid epidemic that has claimed tens of thousands of lives.

It was the first time that senior or former executives have faced criminal charges in connection with distributing powerful prescription painkillers like oxycodone and fentanyl that carry a high risk of addiction and overdose.

The company where the executives worked, Rochester Drug Cooperative (RDC), is one of the country's largest distributors of prescription opioids.

It has entered into a non-prosecution agreement with the US Attorney's office in New York and agreed to pay a $20 million fine.

As result, the company will not be prosecuted and will be allowed to retain its license to distribute drugs, while promising to reform its practices.

In a statement, RDC admitted that between 2012 and 2017 it had failed to report shipments of drugs it recognized as suspicious, as required by law.

"This prosecution is the first of its kind," US Attorney Geoffrey Berman said in a statement.

"Executives of a pharmaceutical distributor and the distributor itself have been charged with drug trafficking, trafficking the same drugs that are fueling the opioid epidemic that is ravaging this country."

RDC distributes to some 1,300 pharmacies and with an annual turnover of more than $1 billion, according to documents released by prosecutors.

Investigators found that it had failed to report at least 2,000 suspicious orders of drugs whose distribution is overseen by the Drug Enforcement Administration (DEA).

The defendants were named as former CEO Laurence Doud, 75, and William Pietruszewski, 53, who had served as chief compliance officer.

"RDC's employees, including in conversations with Doud and Pietruszewski, described some of the company's customers as 'very suspicious,' and even characterized particular pharmacies as a 'DEA investigation in the making' or 'like a stick of dynamite waiting for (the) DEA to light the fuse,'" the New York prosecutors said.

"Nonetheless, throughout the period in question, RDC, at the direction of Doud, increased its sales of oxycodone and fentanyl exponentially," the statement added.

Doud and Pietruszewski were charged with conspiracy to distribute controlled substances, which carries a maximum sentence of life in prison and a minimum of 10 years.

Doud was arrested Tuesday and appeared before a federal judge, who ordered his release on a $500,000 bond.

Pietruszewski pleaded guilty to the same two counts, as well as breaches of his duty to report to the authorities.

Around 47,600 people died in 2017 from an opiate overdose in the United States, according Centers for Disease Control and Prevention figures.

"This epidemic has been driven by greed," Berman told a news conference, adding that Doud had seen his salary more than double between 2012 and 2016.

Two US pharmaceutical bosses are charged with drug trafficking and fulfilling orders they knew to be fraudulent -- fueling the opioid epidemic that has claimed tens of thousands of liveshttps://t.co/KxmBwM4f3O @AFPgraphics pic.twitter.com/33K4TPLBT3

— AFP news agency (@AFP) 24 april 2019

Senior official sacked as China's vaccine scandal mounts

Yahoo – AFP, August 16, 2018

China is regularly hit by scandals involving sub-par or toxic food, drugs and 

other products (AFP Photo)

Beijing (AFP) - China's Communist Party has sacked a senior regional official over a vaccine scandal that inflamed public fears over the safety of domestically produced drugs, state media reported Thursday.

The government has been struggling to shore up public confidence in the pharmaceutical sector following the revelation last month that a major Chinese manufacturer of rabies vaccines was found to have fabricated records and was ordered to cease production.

The government has said the suspect rabies vaccines did not enter the market but the case provoked unusually strong outrage online from consumers fed up with recurring product-safety scandals, particularly in the drug sector.

The CEO of the company in question, Changchun Changsheng Biotechnology in the northeast province of Jilin, has been arrested along with 14 other people in connection with the scandal.

On Thursday, Jilin's deputy governor Jin Yuhui became the first political casualty, the official Xinhua news agency announced.

He was in charge of monitoring the safety of food and pharmaceuticals.

The decision to sack him was made at a meeting of the ruling Communist Party's elite seven-member standing committee, led by President Xi Jinping.

"Those who break the law and jeopardise public safety, notably in the matter of vaccines and medicines, should be severely punished," Xinhua reported, citing the meeting's conclusions.

"It ia necessary to encourage officials to work well and carry out their responsibilities in a serious manner," dealing firmly with any failings, the Chinese leaders added.

Six other provincial officials were also fired on Thursday following separate meetings by party leaders, Xinhua reported.

The officials had been responsible for food and drug safety in Jilin and its capital Changchun.

China is regularly hit by scandals involving sub-par or toxic food, drugs and other products, despite repeated promises by the government to address the problem.

Since the latest case came to light, the authorities have announced a nationwide inspection of laboratories producing vaccines, but many Chinese parents say they no longer have confidence in the medicines administered to their children.

Health Ministry Reveals Names of 14 Health Facilities That Have Been Using Fake Vaccines

Jakarta Globe, 14 Jul 2016

Jakarta. The Health Ministry on Thursday (14/07) announced the names of 14 health facilities that have allegedly been administering fake vaccines to their patients. 13 of the 14 health facilities are located in Bekasi, just outside Jakarta.

The names of the private hospitals were revealed during a hearing at the House of Representatives, which had been urging the Health Ministry to announce the names since Wednesday.

The National Police announced on Tuesday that according to their ongoing investigation 14 health facilities have been using fake vaccines.

"We have obtained a permission from the police's criminal investigations unit to announce the names," Health Minister Nila Moeloek told lawmakers from the House's Commission IX, which oversees health and manpower affairs.

According to the document released by the ministry, the names of the 14 hospitals and their locations are:

1. Dr. Sander Batuna in North Cikarang, Bekasi

2. Bhakti Husada in North Cikarang, Bekasi

3. Sentral Medika in Cikarang, Bekasi

4. Puspa Husada in South Tambun, Bekasi

5. Karya Medika in West Cikarang, Bekasi

6. Kartika Husada in Jatiasih, Bekasi

7. Sayang Bunda in Pondok Ungu Permai, Bekasi

8. Multazam in Bekasi

9. Permata in Bekasi

10. Gizar in South Cikarang, Bekasi

11. Elisabeth in Bojong Rawalumbu, Bekasi

12. Hosana Medica in Lippo Cikarang, Bekasi

13. Hosana Medica in Bekasi

14. Harapan Bunda in Ciracas, East Jakarta

The 13 hospitals in Bekasi bought their fake vaccines from Juanda, an employee of CV Azka Medika. Harapan Bunda Hospital in East Jakarta obtained the fake vaccines from a man named M. Syahrul.

According to the document, both men had "given a list of the vaccines and their prices to the procurement units at the hospitals. The orders were later agreed by the hospital directors."

Smirking Shkreli clashes with US congressional panel

Yahoo – AFP, 4 February 2016

Entrepreneur and pharmaceutical executive Martin Shkreli listens during a 

congressional hearing on February 4, 2016 in Washington (AFP Photo/

Brendan Smialowski)

Washington (AFP) - Pharmaceutical "bad boy" Martin Shkreli invoked his constitutional right against self-incrimination Thursday in a brief, contentious appearance before a US congressional panel.

Shkreli, called to testify in a House oversight hearing on prescription drug prices, repeatedly declined to explain steep drug price increases he imposed as former chief executive of Turing Pharmaceuticals.

Shkreli was asked what he would tell sick patients who can no longer afford the drug and whether he thinks he has done anything wrong.

"On the advice of counsel, I invoke the Fifth Amendment and respectfully decline to answer your question," Shkreli told the lawmakers in each case.

Shkreli wore a smirk and looked away from lawmakers much of the time, sparking bipartisan outrage.

"It's not funny," said Maryland Democrat Elijah Cummings, the senior Democrat on the committee. "People are dying and they are getting sicker."

Representative John Duncan, a Tennessee Republican and a veteran lawmaker first elected in 1988, said in all his years in Congress: "I've never seen an individual behave with such arrogance."

Shkreli, 32, vaulted to notoriety in September 2015 after he raised the price of Daraprim from $13.50 to $750 per pill. Daraprim is a decades-old drug used to treat toxoplasmosis, a potentially fatal infection, and it is also used by HIV patients.

In December, Shkreli was arrested and indicted for securities fraud for allegedly orchestrating a Ponzi scheme-like conspiracy at two hedge funds and another firm, prior to joining Turing.

He is accused of lying to investors, moved money between investments to cover losses in other vehicles and siphoned off cash for personal expenses. Shkreli resigned as CEO of Turing the day after the indictment.

Shkreli's attorney, Benjamin Brafman, a prominent criminal defense lawyer, told reporters after the appearance that it was a "frustrating morning for us."

"Mr. Shkreli would like nothing more than to answer the committee's questions," Brafman said. However, invoking the Fifth Amendment was "appropriate" given his indictment on the fraud charge.

"I would also tell you Mr. Shkreli did not intend to show any disrespect for any members of the committee, listened intently," he said.

"Some of what you saw was nervous energy by an individual who very much would like to explain what happened, but has agreed to listen to his lawyer," said Brafman, whose high-profile clients have included Dominique Strauss-Kahn, the International Monetary Fund chief who resigned amid a sexual assault scandal.

Shkreli stayed mum as television cameras followed him from the Capitol Hill hearing, but quickly took to Twitter after that to blast lawmakers.

"Hard to accept that these imbeciles represent the people in our government," he tweeted.

Martin Shkreli (2nd R), CEO of Turing Pharmaceutical, is brought out of 26

Federal Plaza by law enforcement officials after being arrested for securities

fraud on December 17, 2015 in New York City (AFP Photo/Andrew Burton)

Related Article:

Reviled US pharma chief arrested on fraud charges

Reviled US pharma chief arrested on fraud charges

Yahoo – AFP, Thomas Urbain, December 17, 2015

Martin Shkreli (C) leaves the federal court in New York on December 17,
2015 (AFP Photo/Jewel Samad)

New York (AFP) - A reviled US pharmaceutical boss who caused a storm in September by jacking up the price of a life-saving drug by 5,000 percent was arrested Thursday on fraud charges, prosecutors said.

The arrest of Martin Shkreli -- who has appeared to revel in his notoriety -- was not linked to the massive increase in the price of Daraprim, a drug used to treat malaria and infections suffered by people with HIV.

The former hedge fund manager, 32, is accused of stealing $11 million in what the FBI described as a "securities fraud trifecta of lies, deceit and greed."

Prosecutors said the scheme involved another company he once led, Retrophin, and two hedge funds.

"As alleged, Martin Shkreli engaged in multiple schemes to ensnare investors through a web of lies and deceit," said Robert Capers, US Attorney for the Eastern District of New York.

"His plots were matched only by efforts to conceal the fraud, which led him to operate his companies, including a publicly traded company, as a Ponzi scheme, where he used the assets of the new entity to pay off debts from the old entity."

It began in 2009 when Shkreli allegedly lied to eight people to get them to invest about $3 million in his hedge fund, Capers told a press conference.

When he lost the money through "bad trades" he started a new fund to try to cover the losses and continue to line his pockets.

Shkreli was also charged by the Securities and Exchange Commission.

"Over a five-year period, Shkreli is alleged to have perpetrated a series of frauds on investors in his hedge funds and Retrophin's shareholders in order to cover up his poor trading decisions," said Andrew Ceresney, director of the SEC's enforcement division.

Martin Shkreli (2nd R), CEO of Turing Pharmaceutical, is brought out of 26 

Federal Plaza by law enforcement officials after being arrested for securities 

fraud on December 17, 2015 in New York City (AFP Photo/Andrew Burton)

Shkreli is accused of siphoning about $120,000 from one of the hedge funds to pay for food, clothing, rent and other personal expenses.

He is also accused of lying to investors about one of the fund's size and performance by claiming returns of nearly 36 percent when it had really generated a loss of 18 percent and saying the fund had $35 million in assets when it really had less than $7,000.

He allegedly stole $900,000 in 2013 from one of the funds to settle with a broker who was suing him and stole more money to pay off disgruntled investors who were threatening legal action.

Also arrested was Evan Greebel, a lawyer who was outside counsel to Retrophin.

Reveling in controversy

Shkreli gained notoriety in September when his company Turing Pharmaceuticals raised the price of Daraprim from $13.50 a tablet to $750 after acquiring the drug.

The move -- and his arrogant response to the controversy -- was angrily denounced by US politicians.

"Price gouging like this in the specialty drug market is outrageous," Democratic frontrunner Hillary Clinton said on Twitter, vowing to fight runaway drug prices.

Turing later announced that while it would not lower the drug's per tablet price, it would negotiate agreements with health groups on wholesale prices.

Shkreli, the chief executive of the company, specializes in buying patents on inexpensive drugs and then hiking their price.

In November, he gained control of another drug company, Kalobios Pharmaceuticals, whose stock price plummeted on news of his arrest, falling 53.24 percent to $11.03 before trading was suspended.

Reveling in controversy, Shkreli made waves earlier this month by buying a secret Wu-Tang Clan album for $2 million, "Once Upon a Time in Shaolin."

Turing Pharmaceuticals did not immediately return a request for comment.

Henan woman's kidney stolen during surgery

Want China Times, Staff Reporter 2015-02-22

A cartoon depicting a patient's kidney being stolen during
a surgery at a hospital in Henan. (Photo/CFP)

A woman in China's Henan province claims that one of her kidneys was stolen during one of her past surgeries, but the case remains unsolved despite the lawsuit she filed against the hospitals in 2011, Hong Kong-based Hua Shang Daily reports.

Xu Xiuying, a fruit vendor in Henan's Xiangcheng, first found out about her missing right kidney during an ultrasound checkup in 2008, which was two years after she underwent surgery to remove a benign tumor on her colon, the newspaper said.

Xu, who is married to a teacher and has a son, underwent the surgery in the city's First People's Hospital on Nov. 14, 2006. She began feeling pain around her waist and back following the six-hour operation.

She had another surgery to remove a uterine fibroid at another hospital in Xiangcheng on Oct. 19, 2007, the newspaper added.

Some local media reports said that Xu initially thought she was born with just one kidney and did not become suspicious until 2011, when she learned about a doctor being sentenced in another case for illegally selling human kidneys.

Several checkups later confirmed that her right kidney had been removed. This discovery led Xu to file a civil lawsuit against the two hospitals in 2011, seeking damages on the grounds of a medical dispute.

The criminal nature of the case required Xu to undergo a medical examination. However, the report published by the examiners on June 2013 failed to conclusively determine what happened to Xu and merely concluded that her kidney was more likely to have been removed during her 2006 surgery.

An expert also said the questionable circumstances of Xu's 2006 surgery, which included the unusually long time it took to complete the operation, the extended length of the incision and the prolonged period allotted for the blood tests beforehand.

In addition, the newspaper said that an ultrasound check was conducted on Xu's kidneys before the 2006 surgery.

Conflicting claims have arisen between the hospital and local authorities on whether an investigation has already been initiated to resolve Xu's plight, even though the medical report was submitted to authorities to pursue a criminal case in 2013, according to the newspaper.

GSK China may lay off 1000 workers in 2015

Want China Times, Staff Reporter 2015-01-23

GSK's research center in Shanghai. (File photo/Xinhua)

British pharmaceutical and healthcare giant GlaxoSmithKline (GSK) will conduct large-sized layoffs in China letting go up to 1,000 employees, Beijing-based Caixin Online reports, citing several GSK China employees.

GSK China will lay off 450 employees in the first quarter, with more pink slips to follow into the second quarter, said one unnamed source close to GSK China's top leadership.

The public relations unit of GSK China denied this, saying GSK China will not cut its team size, and on the contrary, it plans to hire more workers to satisfy the needs of its future development.

In July 2013, a report from the Ministry of Public Security said GSK, in order to establish a channel to sell its pharmacuetical products, had used travel agencies to directly bribe or indirectly sponsor some pharmaceutical industry associations, hospitals and doctors. The case has now entered the legal process, while GSK China's business has been severely affected, triggering several layoffs.

Between March and June 2014, GSK China saw hundreds of medical sales representatives resign, and since June 2014, quite a few former GSK China medical sales representatives have filed labor lawsuits against GSK China in Shanghai, Shandong and Harbin.

Several industry insiders said GSK China's conducting of another layoff probably aims to cut its previous business promotion model, as it has suffered declining business after the bribing scandal.

Before the 2013 scandal, GSK had for years ranked No. 1 in the Chinese market, but since then it has suffered sharp sales declines.

GSK China's business focuses on prescription drugs and vaccines. According to its financial report, GSK China's prescription drugs and vaccine businesses in the first three quarters of 2013 tumbled 61% from the same period a year earlier. Its falling business in China has dragged down GSK's global revenues, which fell 11% in the first three quarters of 2014 from the same period a year ago.

In addition to GSK China's layoff reports, GSK United States also launched layoff plans. In early December 2014, GSK US announced plans to let go of 350 employees in the first quarter of 2015, another 450 in the second quarter, and additional 100 in the second half, aiming to reduce costs.

GSK in its 2014 third-quarter financial report said it would soon launch an internal reorganization plan, aiming to reduce annual costs by ￡1 billion (US$1.5 billion) every year for the next three years, but it didn't provide any details of its layoff plans.

Related Article:

Drugmaker GSK fined $490 mn in China graft probe

Drugmaker GSK fined $490 mn in China graft probe

Yahoo – AFP, Felicia Sonmez, 19 Sep 2014

A GlaxoSmithKline (GSK) employee enters their office headquarters
in Shanghai on July 1, 2013

Beijing (AFP) - A Chinese court on Friday fined British drugmaker GlaxoSmithKline 3.0 billion yuan ($490 million) following a nearly year-long bribery probe, the company said.

The firm's former head of China operations, Mark Reilly who would be deported, and four other ex-officials were given suspended sentences of between two and four years in prison, the official Xinhua news agency said.

The fine levied by the Changsha Intermediate People's Court after a closed hearing in central Hunan province was the largest ever handed down by a Chinese court, according to Xinhua.

GlaxoSmithKline global headquarters in

 west London on July 29, 2013 (AFP Photo/

Ben Stansall)

It equals the precise amount that China's ministry of public security said last year had been funnelled between GSK and travel agencies since 2007.

Police allege that GSK took kickbacks from travel agencies to organise conferences that never took place.

The company also "resorted to bribery to boost sales of its medical products and sought benefits in an unfair manner," the court said in a statement, according to Xinhua.

"GSK bribed, in various forms, people working in medical institutions across the country, and the amount of money involved was huge. Five senior executives actively organized, pushed forward and implemented sales with bribery," the court statement added.

The firm said in a statement that the court had found it guilty of "bribing non-government personnel".

'Clear breach' of governance

In an apology posted on its website, GSK said that the illegal activities of the firm's China arm "are a clear breach of GSK plc's governance and compliance procedures; and are wholly contrary to the values and standards we expect from our employees".

The firm "must work hard to regain the trust of the Chinese people", it added.

According to Xinhua, Reilly was given three years in prison but will receive a four-year reprieve and be "expelled" from China. It did not provide further details.

Three other GSK officials -- former human resources director Zhang Guowei, former vice president Liang Hong and former legal affairs director Zhao Hongyan -- received sentences and reprieves of two to three years, Xinhua said.

The firm's former general manager for business development, Huang Hong, was found guilty of "bribing and receiving bribes" and received a sentence of three years, which will be suspended for four years, according to Xinhua.

The court decided to reduce the jail sentences for the five "since they confessed the facts truthfully and were considered to have given themselves up," Xinhua reported.

After being detained by Chinese authorities last year, Huang was quoted in state media as saying that GSK had set up a special team to handle important clients which had an annual "relations" budget of nearly 10 million yuan ($1.6 million).

Sales growth targets set by the firm as high as 25 percent put pressure on employees, Xinhua quoted Huang as saying.

Neither the statement nor the apology mentioned the sentencing of Reilly or other officials.

Peter Humphrey (2nd left) at the Number One People's Intermediate Court

in Shanghai on August 8, 2014 (AFP Photo/People's Intermediate Court)

The verdict comes more than a year after Chinese police first accused Reilly of ordering employees to bribe hospitals, doctors and health institutions to gain billions of dollars in revenue.

China's healthcare sector is widely considered to be riddled with graft, partly the result of an opaque tendering system for drugs, and also due to doctors' low salaries.

GSK is the most high-profile target of wide-ranging Chinese inquiries into foreign pharmaceutical firms, as Beijing also mounts probes into overseas companies in sectors ranging from cars to baby milk.

The investigations come against the backdrop of an anti-graft campaign backed by President Xi Jinping to root out official corruption.

Reilly is not the only non-Chinese national to have been ensnared in the probe.

Last month, a Shanghai court sentenced British investigator Peter Humphrey and his American wife Yu Yingzeng to two-and-a-half years in jail for breaching privacy laws.

The investigators had been hired by GSK to investigate the source of a lurid sex tape of Reilly shortly before the probe went public.

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GSK China hit with record fine, apologizes for bribery

GlaxoSmithKline ex-boss to be deported back to UK from China

235 firms in Taiwan affected by recycled oil scandal

Want China Times, CNA 2014-09-06

Empty supermarket shelves from which affected products have
been removed. (Photo/Chi Chih-hsiang)

At least 235 Taiwanese food companies and restaurants have used the suspect lard-based oil brand made with recycled kitchen waste, the Food and Drug Administration (FDA) said Friday.

An investigation found that Kaohsiung-based Chang Guann Company has supplied 51,981 18-liter cans of its "Chuan Tung" cooking oil to companies across Taiwan, according to FDA chief Yeh Ming-kung.

This has affected well-known companies such as Triko Foods Company, Ve Wong Corporation, Taiwan Sugar Corporation, the Mei & Mei restaurant chain, WHM Company, the Yu Jen Jai pastry shop, Chi Mei Frozen Food Company, Hawdii and Kong Yen Foods Company.

Wei Chuan Foods Corporation, another customer of Chang Guann and a major player in the industry, has already recalled 12 products including its popular canned pork fiber and meat paste immediately following the revelations on Thursday.

According to Chang Guann, the oil was sourced between February and August by an individual named Kuo Lieh-cheng, who allegedly worked with five others to use a phony waste processing company as a front to collect oils meant to be recycled for uses other than human consumption.

Chang Guann allegedly bought 242 tonnes of oils provided by Kuo and turned them into 782 tonnes of products sold as lard-based oils.

Kuo, now facing prosecution, is believed to have gone so far as to collect grease by-products from leather processing plants to market as edible oils.

Yeh Wen-hsiang apologizes for the oil scandal, Sept. 11. (Photo/CNA)

Kuo Lieh-cheng covers his face with a hat as 

he rushes into Pingtung District Court, Sept. 6.

(Photo/Lin Ho-sheng)

Related Articles:

Chang Guann chairman detained in Taiwan oil scandal
Key suspect detained in recycled cooking oil case

Keelung restaurateurs demand compensation over oil scandal
FDA to bring lard-based oil industry into traceability system

More Taiwan food makers hit by oil scandal

Wei Lih recalls three noodle products made with recycled oil
Macau government criticized over approval of recycled oil imports
Taiwan gutter oil scandal spreads to Hong Kong

Two companies fined for being uncooperative in cooking oil probe

110 food products confirmed to contain recycled oil: FDA
Recycled oil does not pose immediate health risk: Taiwan FDA

Six executives formally arrested over Shanghai Husi food scandal

Want China Times, Xinhua 2014-08-30

The headquarters of Shanghai Husi Food Co. (Photo/CNS)

Six senior executives of the scandal-ridden Shanghai Husi Food Co were formally arrested on Friday over charges of producing and selling counterfeit products, said the municipal procuratorate.

The official arrests were approved by the Second Branch of the Shanghai Municipal People's Procuratorate. The procuratorate said a man named Hu Jun was among those arrested, but refused to provide more details.

OSI China, the parent company of Shanghai Husi, confirmed on its website six employees have been arrested and said it will continue to cooperate fully with authorities.

The food scandal was first exposed after a local TV station reported on July 20 that Shanghai Husi had supplied products tainted with reprocessed, expired meat to a string of fast food chains and restaurants across China.

Chinese food and industry watchdogs immediately launched a probe into the scandal.

Related Articles:

Husi meat scandal just the tip of the iceberg, says exec

McDonald's Japan halts sales of Chinese chicken after meat scandal
China arrests five in expired meat scandal

China shuts meat factory supplying McDonald's, KFC

China court jails British, US investigators hired by GSK

Yahoo – AFP, 8 Aug 2014

A British investigator once hired by scandal-hit pharmaceutical giant GSK in China was sentenced to two-and-a-half years in jail for breaching privacy laws, a Shanghai court said Friday.

Peter Humphrey and his American wife Yu Yingzeng were hired to investigate the source of a lurid sex tape of the China boss of GlaxoSmithKline (GSK), shortly before the British firm became embroiled in bribery allegations.

"Defendant Peter William Humphrey who had committed the crime of illegally obtaining citizens' personal information was sentenced by the court to two years and six months in jail, with a fine of 200,000 yuan ($32,000) and will be expelled from the country," a court official said, adding that his wife Yu would also be jailed.

Peter Humphrey (2-L), a British investigator once hired by scandal-hit pharmaceutical

 giant GSK in China, and his US wife Yu Yingzeng (C-in red) stand trial at the Number

One People's Intermediate Court in Shanghai on August 8, 2014 (AFP Photo)

"Both Humphrey and Yu Yingzeng said they regretted their actions and expressed their apologies when making their final statements," court spokeswoman Tang Liming added.

GSK is the most high-profile target of wide-ranging Chinese inquiries into foreign pharmaceutical firms, as Beijing also mounts probes into overseas companies in sectors ranging from cars to baby milk.

But at no point did prosecutors mention the British firm when questioning Humphrey or Yu on Friday, according to transcripts posted online by the court.

The couple's son, Harvey Humphrey, told AFP that he was "very sad" about the verdict.

"I did not expect the sentence to be that long. I thought they would be jailed but I did not expect it would be for that long," he said.

An employee of British drug firm

 GlaxoSmithKline (GSK) enters their 

office headquarters in Shanghai on 

July 1, 2013 (AFP Photo/Peter Parks)

He also said that he hoped "the authorities will take into account my parent's poor health conditions", without giving details.

Information 'resold to clients'

Chinese prosecutors accused the couple of illegally obtaining more than 200 pieces of information on Chinese individuals, which they resold to clients.

"Generally speaking... I don't dispute (the prosecutor's indictment)," Humphrey told the Number One People's Intermediate Court in Shanghai, it said on a verified microblog account.

It posted a picture of Humphrey facing a judge wearing a dark suit while Yu wore a smart red jacket, each of them with an arm gripped by a uniformed officer.

Foreign media were not allowed into the courtroom.

The sentence was announced late in the evening after a trial which lasted almost 12 hours. Yu's jail term was two years and she was fined 150,000 yuan.

The spokeswoman also said that the two did not appeal in court.

"We sold consulting services, which sometimes included personal information," Humphrey said according to the court, adding that he was unclear about the relevant laws and details of particular cases.

Harvey Humphrey, son of British investigator Peter Humphrey (not pictured),

 is seen during a break in the investigation of two investigators of pharmaceutical

 giant GSK, in the Shanghai Intermediate Court on August 8, 2014 (AFP

Photo/Johannes Eisele)

"We asked other companies to help us to obtain people's household registration information, and we would pay a fee" for the service, he said.

He denied an accusation that he had "tailed" clients, but said he may have sent staff to "stand outside" an office to monitor it.

"The services we supplied aim at reducing risks, especially risks in regard to fraud and corruption," he added.

Yu said she had "no dispute with the evidence provided by the prosecution," but denied that she had sold personal data to other firms.

"We gathered information not so we could sell it, but so we could write reports," she said, adding that household registration data was obtained to check on corruption.

Near-perfect conviction rate

The case has raised concerns amongst foreign investors in China, who often hire independent investigators to conduct due-diligence investigations into Chinese companies.

Chinese courts have a near-perfect conviction rate in criminal cases -- 99.93 percent last year.

Chinese authorities are investigating several foreign pharmaceutical firms over pricing and other issues.

GSK has been accused of systemic corruption, and in May its former China boss Mark Reilly was charged with ordering employees to bribe hospitals, doctors and health institutions to gain billions of dollars in revenue.

A Chinese flag flies in front of the

 Shanghai Intermediate Court on August 8,

2014 (AFP Photo/Johannes Eisele)

China's healthcare sector is widely considered to be riddled with graft, partly the result of an opaque tendering system for drugs and doctors' low salaries.

Humphrey, a former journalist and longtime China resident who founded an investigative firm, ChinaWhys, was reportedly hired by GSK to look into the origin of a covertly filmed video of Reilly and a girlfriend.

Humphrey's wife worked as ChinaWhys' general manager.

The duo have been paraded in prison suits by state broadcaster China Central Television (CCTV), which earlier aired a televised "confession" by an unshaven Humphrey.

China originally said the couple's trial would be held in secret, but the Shanghai court said last month it would hold "open" proceedings.

In practice that has meant the delayed transcripts of the trial being posted on the microblog account, which was being shown on a screen to reporters in a separate room in the court building.

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