June 08, 2011

Convicted CEO Giving DOJ Taste of Its Medicine

[Ginny LaRoe]

How the tables have turned.

A press release got Dr. Scott Harkonen convicted of a federal crime. Now, he's going after the DOJ for what he calls a false statement in one of its press releases about his case.

Harkonen is the InterMune executive who was prosecuted for wire fraud stemming from a false press release aimed at boosting sales of a drug. A jury convicted him in 2009.

Mark Haddad of Sidley Austin, who is now working with Dennis Riordan on the appeal and other fall-out from the prosecution, filed a request under the relatively obscure Information Quality Act, in hopes of the DOJ putting out a corrected statement.

"It's an extremely bitter, painful irony," Haddad said Wednesday.

Prosecutors' statement in question read: "The actions of this defendant served to divert precious financial resources from the VA's critical mission providing healthcare to this nation's military veterans."

That's not true, Haddad says. The lengthy and recently concluded sentencing process showed the government was unable to prove Harkonen's actions promoting the drug Actimmune caused a financial loss to private insurers or federal agencies, including the Veterans Administration.

The Harkonen case was a major health-care fraud case handled by the San Franisco U.S. Attorney's office in recent years. But it ended with a fizzle. Federal Judge Marilyn Hall Patel rejected the government's request for a prison sentence and a $1 million fine. Instead she ordered probation, home detention, community service and a $20,000 fine.

The U.S. attorney's office didn't immediately respond to a request for comment.

Haddad noted that Patel even said during sentencing that Harkonen has much to offer to society. It doesn't  help, though, that there's a damning press release easily accessible on the Internet, Haddad said.

"He would very much like to participate again in the area of drug development, but it's the government  that's standing in the way of that right now," Haddad said. Haddad filed a previous IQA request about another statement in the DOJ's press release but got no relief.

The case is on appeal.


TrackBack URL for this entry: