Appeals court upholds conviction in Fen-Phen case

Published 11:06 pm Wednesday, December 24, 2008

A federal appeals court has upheld the conviction of an attorney for swindling a pharmaceutical company 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 revealed it could cause heart problems. 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 5th U.S. Circuit Court of Appeals in New Orleans upheld the conviction on Monday.

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, a joint effort by Internal Revenue Service and 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 attorneys had claimed that he only made $198,000 off fraudulent Fen-Phen claims. Prosecutors put the figure at $6.2 million.

Arledge appealed his conviction on the ground there was insufficient evidence to convict him. The 5th 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 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 5th Circuit said. “Warren tried to convince Green to continue fabricating the prescriptions, but Green was not assuaged.”

Green testified 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.”