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.