OBSTRUCTION: Howard Richman Gets 3 Years In Prison For Lying To Federal Judge, SEC; Charge Resulted From False Cancer Claim In Bid To Derail Civil Case

UPDATED 12:45 A.M. EDT (U.S.A. OCT 6) A former executive at Biopure Corp. has been sentenced to three years in prison for lying to a federal judge and obstructing an SEC investigation by claiming falsely that he was suffering from colon cancer.

Howard Richman, 57, also was sentenced to three years’ supervised probation after his release and ordered to pay a $50,000 fine. Richman, who practiced podiatric medicine from 1978 to 1992, forged a letter and an affidavit from his doctor, and lied to his own attorneys by calling the law firm and posing as a third-party physician to pull off the fraud on the court.

“Richman did not have cancer, and falsely claimed to be terminally ill in order to avoid discovery in the SEC’s case against him and to obtain a favorable settlement,” said the office of Acting U.S. Attorney Michael K. Loucks, in a joint statement with the FBI.

Prosecutors had argued for a 21-month-sentence for Richman. U.S. District Judge Mark Wolf tacked on 15 more months than the government had sought, sentencing Richman to 36 months.

Previously, Richman was banned from serving as an officer or director of any public company and ordered to pay a $150,000 civil penalty.

“As a condition of his supervised release, Richman must enter into a payment plan with the Commission to pay the remainder of his $150,000 civil penalty,” the SEC said today.

The case began as a claim that Biopure for months had failed to disclose to investors negative information about a synthetic blood product known as Hemopure. In April 2003, the Food and Drug Administration raised “serious concerns” about the product, questioned its safety and barred the company from conducting clinical trials of Hemopure on trauma victims, the SEC said.

“Biopure, however, issued public statements beginning on August 1, 2003 describing the FDA’s communication as good news, causing its stock price to increase by over 20%,” the SEC said in 2003.

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6 Responses to “OBSTRUCTION: Howard Richman Gets 3 Years In Prison For Lying To Federal Judge, SEC; Charge Resulted From False Cancer Claim In Bid To Derail Civil Case”

  1. Wonder if Andy saw this? He had better hope he has a real heart condition if this is any indication of what is in store for him if he doesn’t. I bet if he didn’t, he does now.

  2. How many years do you think Bob will get for Obstruction??

  3. Quick note:

    This story reminded me of a comment poster dirty_bird made here on June 30.

    dirty_bird, who has researched autosurf Ponzi schemes for a long time, observed that some surf participants engage in furious spinning in a bid to turn undeniable negatives into a positive.

    “I am reminded of Monty Python’s Black Knight skit every time one of these ‘programs’ disappears,” dirty-bird said. “There is always some fool stating ‘it’s merely a flesh wound’ after each limb is lost.”

    That’s pretty much what happened with Biopure. The company knew the FDA had crippled it by raising the safety concerns and denying the application to test the product on human beings suffering from traumatic injuries.

    And yet Biopure initially did not disclose the information. When it finally did get around to disclosing it, it basically spun the situation as a win for the company. Later, in SEC filings, it disclosed the FDA information. The market reacted poorly, and Biopure then said that a junior attorney had made an incorrect filing.

    “When Biopure’s stock price dropped on heavy trading, the company told
    investors that the reference to the letter as a complete response letter was a ‘mistake’ by a ‘junior lawyer at a law firm’ retained by the company. The disclosure was quickly ‘fixed’ with the filing of an amended prospectus that omitted the reference to the letter as a ‘complete response letter,'” the SEC said at the time.


    So, in other words, a positive reality was conflated to make a negative reality go away — rather like some of the participants in the ASD case have done.

    dirty-bird’s June remarks were in a thread about attorneys in the AdSurfDaily racketeering lawsuit mentioning AdViewGlobal (AVG) in a court filing.

    One poster argued that it couldn’t possibly be important, because the AVG mention was tiny, contained only in a footnote.

    Federal prosecutors made a veiled reference to AVG in a footnote of their own last month.

    Here is the June 30 thread, a very memorable one:


    And here is a Sept. 25 thread on the prosecution’s AVG reference in a footnote:



  4. Do the analysis, comment on the failure of an individual VP, or wonder what will happen to the others who defrauded the investors. Fine. I, a former nine year employee, and my wife 18 years at Biopure watched in horror as 230+ empolyees and their mostly young families were laid off and their finances got nuked. Mr. Richman got off easy for killing so many nest eggs, hopes, dreams and careers that will take most of those families a decade to reinflate.

  5. Patrick… is this the same Howard Richman who is in LA?
    The man whose soundfeelings.com website is practically an infomercial for fraudulent money shuffling schemes?

  6. I did time with this psycho in Pecola, Fl. He ran around telling guys he was an MD screwed over by the feds. He even lloked over guys that had strains and pains from working and living at the camp. Eventually, someones family looked into him and relayed his story to the inmates.