Former Valeant Executive and Co-Defendant Sentenced to Prison

By Patrick Thomas

A former executive at Valeant Pharmaceuticals International Inc. was sentenced Tuesday to spend a year in prison after being found guilty of defrauding the pharmaceutical giant through a multimillion-dollar kickback scheme.

Gary Tanner, and his co-defendant, Andrew Davenport, the former chief executive of specialty mail-order pharmacy Philidor Rx Services, were both sentenced to one year and a day in prison. A Manhattan federal jury in May convicted both men on all four counts they faced, including honest services wire fraud and money-laundering conspiracy. The sentence from Senior U.S. District Judge Loretta Preska, who also presided over the defendants' trial, also called for two years of supervised release and for the men to forfeit about $9.7 million each.

Prosecutors had alleged Valeant, now named Bausch Health Cos., was the victim of fraud, with Messrs. Tanner and Davenport conspiring to persuade the pharmaceutical company to funnel business to Philidor. Mr. Davenport paid Mr. Tanner about $10 million in kickbacks, while Mr. Tanner used his position at Valeant to facilitate deals that helped Mr. Davenport take in more than $40 million, prosecutors said.

The defense lawyers had argued the two were working in Valeant's interest, developing Philidor as a partner and generating profits for both companies.

Attorneys for Messrs. Tanner and Davenport couldn't immediately be reached for comment. A representative from Bausch Health couldn't be reached for comment.

"Gary Tanner and Andrew Davenport conspired to deceive and defraud Tanner's employer, Valeant, in order to enrich them both," Manhattan U.S. Attorney Geoffrey S. Berman said in a prepared statement. "Tanner was entrusted to manage Valeant's relationship with Davenport's company. Instead, they devised a scheme to pillage Valeant and share the proceeds. Now Tanner and Davenport have been sentenced for their crimes."

The now-closed Philidor, based in Pennsylvania, assisted Valeant in selling some of its higher-priced products. At one point, at least 90% of the drugs Philidor dispensed were from Valeant, prosecutors said.

Bausch Health, based in Quebec, changed its name from Valeant earlier this year.

Write to Patrick Thomas at Patrick.Thomas@wsj.com

(END) Dow Jones Newswires

October 30, 2018 15:59 ET (19:59 GMT)

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