A federal appeals court in Mississippi has upheld the conviction of a lawyer for swindling Wyeth pharmaceuticals out of millions of dollars over the diet drug Fen-Phen.
Vicksburg lawyer Robert Arledge was convicted in federal court in 2007 and sentenced to six years for his role in the scheme, which netted more than $6 million from the drug company Wyeth.
Fen-Phen was a prescription diet drug pulled from the market in 1997 after research found that it could cause heart problems. Wyeth had to set aside more than $21 billion as part of a lengthy settlement process that later was shown to include some fraudulent claims.
Prosecutors said Arledge knowingly allowed clients to make claims of about $250,000 each, even though they had no legitimate health problems caused by the drug.
The ruling, reported by the Jackson Clarion Ledger, was issued Monday by the Fifth U.S. Circuit Court of Appeals in New Orleans.
Arledge was convicted in March 2007 of one count of conspiracy, four counts of mail fraud, and two counts of wire fraud. He was acquitted of one count of wire fraud and 16 counts of money laundering.
Arledge was the only lawyer charged in the case, which was investigated by Internal Revenue Service and the FBI. The agencies were investigating fraudulent claims in a $400 million settlement over the drug.
Besides the prison sentence, U.S. District Judge David Bramlette had ordered Arledge to pay $5.8 million in restitution. However, the appeals court said Bramlette should reconsider that amount because $54,000 in claims were legitimate and therefore should not have been included in the restitution order.
Arledge's lawyers had claimed that he made only $198,000 off fraudulent Fen-Phen claims. Prosecutors put the figure at $6.2 million.
Arledge appealed his conviction on the ground that there was insufficient evidence to convict him. The Fifth Circuit said prosecutors proved Arledge was aware of fraud.
During the trial, one of Arledge's former clients testified against him. Regina Reed Green of Fayette, who pleaded guilty to tax evasion involving false Fen-Phen claims, testified that Arledge knew about the scheme to defraud the drug company.
"The evidence showed that when Green became concerned that she might be caught fabricating the prescriptions and expressed a desire to stop her illegal activity, she contacted [the Rev. Gregory] Warren," the Fifth Circuit said. "Warren tried to convince Green to continue fabricating the prescriptions, but Green was not assuaged."
Green testified that Arledge persuaded her to continue by saying she wouldn't get in trouble because after the case was over "they were going to box all those files up, put them away, and never be seen again."