02-02-05 -- Best, Alexander and Zamloot, Philip -- Sentencings -- News Release

Pharmaceutical Company Employees Sentenced to Prison for Selling Drug Samples, Defrauding Schering-Plough

NEWARK - Two former employees of major New Jersey pharmaceutical companies were sentenced today for the illegal sale of nearly $300,000 in prescription drug samples to pharmacies in New Jersey and Florida, as well as a separate scheme to defraud Schering-Plough Corp. of more than $500,000, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Faith S. Hochberg sentenced former Schering-Plough employee Alexander Best, 35, of Lincoln Park, to 16 months in prison and ordered him to pay $547,331 in restitution to Schering-Plough.

Former Novartis sales representative Philip Zamloot, 35, also of Lincoln Park, was sentenced to 12 months in prison and ordered to pay $156,997 in restitution to Schering-Plough.

Best, an executive in Schering-Plough's sales programs department, and Zamloot remain free on bail and must surrender to the Federal Bureau of Prisons by April 4 to begin serving their prison sentences.

Best and Zamloot each pleaded guilty in April 2004 to one count of conspiracy to defraud the Food and Drug Administration (FDA), unlawfully sell prescription drug samples and misbrand prescription drugs.

In their guilty pleas, they admitted paying pharmaceutical sales representatives to steal prescription drug samples from their inventory and from the doctors they visited. Zamloot also stole drug samples from the physicians he visited. Zamloot and Best then removed the packaging, or "shucked," the pills, placed them in plastic bags, and sold them in bulk to a pharmacist in Paterson and two pharmacists in Florida. Investigators calculated that the three pharmacists paid Best and Zamloot approximately $294,000 for prescription drug samples between 2001 and 2003.

Previously the New Jersey pharmacist, Narendra Dalal, and another pharmaceutical sales representative, Martin Higgins, pleaded guilty in cooperating plea agreements with the government and were sentenced in September to probation by Judge Hochberg. The two Florida pharmacists were prosecuted by authorities in the Southern District of Florida.

The Prescription Drug Marketing Act of 1987 prohibits sales of drug samples and is designed to eliminate the risk that prescription drugs purchased from pharmacies are adulterated, misbranded, subpotent or expired, according to the Informations to which Best and Zamloot pleaded guilty. Pharmaceutical companies routinely provide doctors with free sample prescription drugs, delivered by sales representatives, to begin patient treatment or to test drug effectiveness. Federal Law prohibits selling samples.

Best and Zamloot also admitted to, and were sentenced for, a false billing and padding-and-kickback scheme to defraud Best's former employer Schering-Plough. As part of the scheme, Best and Zamloot created fictitious companies that billed Schering-Plough for work that was never performed. Best and a former co-worker, Hiren Gandhi, used their positions at Schering-Plough to ensure that the company paid the invoices from the fictitious companies. The payment checks were then cashed and the funds distributed among Best, Zamloot and Gandhi. Additionally, Best and Gandhi arranged for certain vendors who did contract work for Schering-Plough to add excess or "padding" to their invoices. Once Schering-Plough paid these invoices the vendors "kicked back" a portion of the padding to Best and Gandhi. Investigators calculated the total loss to Schering-Plough from the scheme to be approximately $547,000.

Hiren Gandhi, who also helped Best and Zamloot identify pharmacists to whom they could sell the unlawfully-obtained prescription drug samples, previously pleaded guilty to one count of conspiracy and awaits sentencing before Judge Hochberg.

Christie credited Special Agents of the FDA Office of Criminal Investigations, under the direction of G.S. Magee, Special Agent in Charge; and Special Agents of the FBI, under the direction of Special Agent in Charge Joseph Billy, Jr., with developing the cases.

The Government is represented by Robert Hanna, acting Chief of the U.S. Attorney's Securities and Healthcare Fraud Unit, and Assistant United States Attorney Joshua Drew of the Securities and Healthcare Fraud Unit.

Defense counsel: Arthur Abrams, Esq., Jersey City, for defendant Zamloot; Vincent C. Scoca, Esq., Bloomfield, for defendant Best.