Four Admit Fraud at Able Laboratories
Four managers at Able Laboratories pleaded guilty to falsifying data at the generic drug manufacturer. The seven year plot ultimately caused the failure of the company. The highest ranking of the four guilty parties, Shashikant Shah, the vice president of quality control and regulatory affairs, also pleaded guilty to conspiring to commit securities fraud; Shah made more than $900,000 by selling company stock while having knowledge of the illegal test practices going on at the company. All four parties said that the company's chief executive officer, Dhanajay G. Wadekar, also was involved in the scheme; however, Wadekar was not named in court and faces no charges as of this time. Assistant U.S. Attorney Robert A. Kirsch says that "the investigation is active and ongoing."
Able Laboratories made generic versions of name-brand drugs for pain, inflammation, obesity, and cardiovascular conditions. The Food and Drug Administration says that Able falsified data in order to make its drugs appear to meet federal standards when they did not. In 41 incidents, drugs from the company were found to have too much or too little of their active ingredient; however, in each case, the strength of the drug was within legal limits. Able filed for bankruptcy reorganization in July 2005, but changed to liquidation in March 2006. All four could be sentenced to up to five years in jail and a $250,000 fine when sentenced.
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