3. Ten cases of pharmaceutical products consisting of 950 boxes of 100 ampoules methylmethionine sulfonium chloride solution. The marks were Archifar Pharmaceuticals, Inc., 20 Exchange Place, N.Y., N.Y. G. A letter dated April 6, 1962 from Ernest Lowens, Associated Chemo-Pharm Industries, Inc., to Gehrig, Hoban & Co., Inc., N.Y., N.Y., instructing the firm to arrange for a transfer of 8 cases of pharmaceutical products and packing material from the SS Portimus, due to arrive on April 9, 1962, to Associated ChemoPharm Industries, Inc., c/o Parlam Warehouse #1, Foreign Trade Zone #1, Staten Island, N.Y. The shipment consisted of the following: 1. Invoice No. 13.079, dated March 20, 1962, issued by Latema Laboratories de Therapeutique Moderne, 42 Rue Rouget de Lisle, Suresnes, France, reflected the sale of 27 K of trithioparamethoxyphenylpropene, aluminum printed boxes, files, strips, literature and sulfarem granules and 17,000 one cc ampoules containing trithioparamethoxyphenylpropene. The invoice contained a statement that the merchandise was made in France. H. Letter dated June 27, 1962, from Associated Chemo-Pharm Industries, Inc., to Gehrig, Hoban & Co., Inc. instructing that firm to transfer 70 cases of pharmaceutical products and packaging material from the SS Ameman Prodicer, B/L #37 due June 28, 1962 at N.Y. to the Foreign Trade Zone #1, Stapleton, to Associated Chemo-Pharm Industries, Inc. Invoice No. 314/62 dated June 14, 1962 issued by Rosaphytopharma, 51 Rue Jules-Auffret, Pantin, Seine, France, reflected that the 70 cases consisted of 230,000 ampoules of pure extract of cynara scolymus, 90,000 ampoules extract of fresh cynara scolymus, 15,000 cartons for boxes, rondos, leaflets in French and Vietnamese files, labels, bands, bottles, 90 litres of chophytol concentrate. I. Letter dated August 2, 1962 from Ernest Lowens, Associated ChemoPharm Industries, Inc., to Gehrig, Hoban & Co. instructing the firm to make a Foreign Trade Zone entry and transfer 73 cases from SS Lista, B/L #C16 due August 6, 1962 to Foreign Trade Zone #1, Stapleton, Long Island. A Packing List dated July 19, 1962 issued by Biosedra, 42 Rue AugustiuDumont, Malakoff (Seine), reflected that the above 73 cases consisted of 54 cases of ampoules pleines (phials full) of tritonyl, bioscorbat, enfants, bioscorbat adults, bioscorbat inject.; 15 cases of empty cardboards and paper boxes for packaging; 3 cases of glassware and one case of capsule files, were shipped to Associated Chemo-Pharm, Inc., N.Y., N.Y. J. Letter dated September 18, 1962 from Ernest Lowens to Gehrig, Hoban & Co., instructing the firm to transfer 26 cases of pharmaceutical products from the SS Lista due to arrive September 18, 1962 to the Foreign Trade Zone #1, Stapleton, Long Island, to Associated Chemo-Pharm Industries, Inc., c/o Parlam. Invoice Nos. 7.375, 7.376, 7.378, 7.379 dated September 4, 1962 issued at Paris by Laboratories Delagrange, 39 BD De La Tour-Maubourg, Paris, reflected that one case consisted of raw materials; 21 cases contained bulk products such as allerga creme, mitosyl pommade; 252 boxes-500 coated tablets (buscopan dragees); 630 boxes 50 ampoules (buscopan ampoules); and 630 boxes-50 ampoules (maxiton fort). One case consisted of 13,545 kilos unvarnished, unwaxed, uncoated tablets sedo carena, 0.0003 kilo indigotin for sedo careno and 0.00001 kilo tartrazine for seda carena; one case consisted of bulk tablets, made up of 13,230 kilos of nautamine tablets and 2,940 maxiton tablets; two cases of bulk unwaxed, uncoated tablets and pigments consisting of 103 kgs. unvarnished, unwaxed, uncoated tablets of sedo carena, 0.0001 kg. tartrazine for sedo carena coated tablets, 0.0045 kg. indigotin for sedo carena and carena quabain coated tablets and 0.0005 kg. crythrosin for carena quabaine coated tablets. At Inwood, Long Island, N.Y. Mr. Morris Schecter, President, and Mrs. Hannah Schecter, Secretary and Treasurer, Bel-Mar Laboratories, Inc., 6-10 Nassau Avenue, advised on February 27, 1963 that they had an agreement with Mr. Clement Gubbay, President, Associated Chemo-Pharm Industries, Inc., to process various pharmaceutical products in the Bel-Mar Laboratories. Gubbay operates under several firm names; Archifar Pharmaceuticals and Gideon Richter Pharmaceutical Products, Inc. Practically all the business done by Bel-Mar was with the Gideon Richter firm. In 1961 they were asked by Gubbay whether or not Bel-Mar was interested in setting up a processing set-up in the Foreign Trade Zone. He wanted some firm to handle pharmaceutical products such as carena quabaine, carena buscopan, maxiton, bioscorbat, sulfaren latena and chophytol in the FTZ. Bell-Mar was not interested. However, it did process other pharmaceuticals for Gubbay. Bel Mar did no business for Gubbay in 1961. However, Bel-Mar processed and acked for Gubbay, under the firm name of Gideon Richter Pharmaceuticals, nc., the following items: 1. Perhepar B-12 injectable, vials of 10 cc 2. Virocortin E. inj., loc. ampoules-B/3 3. Rubrohepar-B-complex solvent 4. Pancortin B-6-1 cc ampoules B/3 5. Pancortin B-6-pediatric-1 cc ampoule-B/3 6. Physiological solution (solvent for atipi) ampoules of 2 cc 7. Pereplex 10 cc injectable vials 8. Progevite E amps-1 cc-boxes of 3's 9. Virocortin-E-1 cc ampoule-boxes of 3 Mr. and Mrs. Schecter made available their files for examination. A spot reiew of their files reflected that Gideon Richter Pharmaceutical Products, Inc. GRPPI) furnished processing and packing orders to Bel-Mar Laboratories. These orders indicated that GRPPI supplied labels, leaflets, individual cartons, solutions, shipping and marking instructions. Bel-Mar furnished vials, any other ngredients as needed, batch numbers, printing, labor, etc. All items were shipped to Saigon under I.C.A. financing. At Queens Village, N.Y. Mr. John Torigian, President, Treasurer, and J. Clifford Ruby, Vice President, Torigian Laboratories, Inc., 218-20-98th Avenue, Queens Village, N.Y., advised Mr. Daniel Cohen and the writer on February 26, 1963 that their company processed such pharmaceuticals as misidina, bromo calcium, bioscorbat and ampoules for Associated Chemo-Pharm Industries, Inc. and emotrifar ampoules for Archifar Pharmaceuticals, Inc., both located at 20 Exchange Place, New York. They indicated that most of their transactions were carried on with a Mr. Ernest Lowens who represented both firms. All of the pharmaceuticals Torigian Laboratories handled for Associated Chemo-Pharm and Archifar were shipped to Saigon under ICA financing and were processed during the period September or October 1961 to December 1962. Torigian was generally furnished with Processing Orders, marking and shipping instructions, empty ampoules, empty paper boxes, inserts or instructions for use, labels, metallic bands (files) and some pharmaceutical ingredients. The paper boxes or containers would usually have instructions in French and Vietnamese and indicate that the item was manufactured in New York, either by Archifar or Associated Chemo-Pharm Industries, Inc. Messrs. Torigian and Ruby made their files available. A spot check review of these files reflected a considerable number of shipments by Archifar of emotrifar ampoules to Saigon under PAS-0054, 0074, 1320, 1600, 2201, 2229, and 2240; and shipments of misidina, bromo calcium, bioscorbat ampoules to Saigon under PAS-0026, 1320, 2212, 2229, and 2266. As an example of the type of processing instructions received from Archifar Pharmaceuticals, Inc., a review of a Process Order No. 116 dated June 18, 1962 reflected that Archifar advised Torigian Laboratories to prepare 4,000 boxes (20,000 ampoules) of emotrifar inj. 3 cc amps, boxes of 5, under Order No. APIEXP #204. Torigian was instructed to use whatever raw materials (ingredients) and packing supplies which were available. Archifar was providing 250 grams Vitamin K and 700 grams Vitamin P. Other ingredients were to be furnished by Torigian. In addition, Archifar was providing 21,000 empty 3 cc ampoules, 4,200 each of boxes, inserts, trade marks and files. Torigian was requested to print the following on each ampoule : "3 cc No. "Emotrifar "Intramuscular "Intravenous "N.Y.-USA" In addition, Torigian was instructed to place a small I.C.A. Emblem on each Corrugated carton and a large I.C.A. Emblem on each shipping case. The export marks to be placed on the cases were: "API-EXP 204-ARY/VVP/4/62-ICA 4— "ICA-PA #430-370-898-256-2240" EXHIBIT NO. 24ACH APRIL 3, 1967. Re IIS Case No. 3567 Mr. ROBERT L. SHORTLEY, Director, IIS/AID, Agency for International Development, Washington, D.C. DEAR MR. SHORTLEY: Investigation at Instituto Luso Farmaco (ILF), Lisbon, Portugal (manufacturer of pharmaceutical products) reflects following: This firm originally filled orders for Gedeon Richter of New York. Orders from New York were discontinued after which ILF began receiving Vietnam orders from Pharma Scienta and Solar in Beirut, Lebanon. Prices which these Beirut firms would pay ILF for Vietnam orders were set by Gubbay. ILF made available copies of its invoices to Solar and Pharma Scienta in connection with approximately 22 transactions. This information furnished on confidential basis and reflects ILF invoice price to the two Beirut firms was $155,040.32 for which Beirut firms invoiced Vietnam importers $281,204.80. Mark up was 80% plus. Investigation at Beirut, Lebanon reflects Solar and Pharma Scienta are solely owned by Gubbay who personally registered them for operation in Beirut in late 1965 or early 1966 to handle Vietnam pharmaceutical business. Joseph Abdelnour was designated by Gubbay as agent for these companies in handling Vietnam business. Abdelnour claims he never saw or ordered any of the pharmaceuticals shipped to Vietnam by Solar or Pharma Scienta and that his duties only had to do with processing necessary documents to effect collection on letters of credit, instructions for which he received from Gubbay. States payments on Vietnam shipments credited to Solar and Pharma Scienta account in Beirut bank. This account was controlled by Gubbay. Abdelnour states he acted as agent for Gubbay firms in Beirut without compensation; however, he did expect Gubbay to give him the agency for distribution of all Richter products in Arab countries. Abdelnour says he has been granted the agency in Beirut for the International Pharmaceutical Organization (IPO) Milan, Italy, which firm handles distribution of Richter products. Abdelnour advised Vietnam business of Solar and Pharma Scienta terminated about 9 months ago; however, these firms continue to exist and operate in that they import and sell drugs to surrounding Arab countries. Investigation conducted at firm of "Famar"-Panos A. Marinopoulos, S.A., Athens, manufacturer and dealer in pharmaceuticals, reflects they made shipments to Vietnam on behalf of Solar and Pharma Scienta of drugs which "Famar" produced under an exclusive license arrangement with Latema, a French pharmaceutical company. Raw materials used in manufacture included materials imported from France. Data presented by firm's chief accountant indicates cost of imports used in manufacture are within 10% range of FOB export price to Vietnam of Solar and Pharma Scienta; also that Gubbay would have handled the orders and prior arrangements through Latema to establish "Famar" as the supply source for Solar and Pharma Scienta on the Vietnam orders. Records of "Famar" as to 17 Vietnam transactions reflect "Famar" invoiced Solar and Pharma Scienta $44,594, and that latter firms in turn billed Vietnam importers $96,562, for same drugs. Mark up was $51.968 or 117%. A summary of the 39 transactions (22 by Instituto Luso Farmaco, Lisbon, Portugal and 17 by "Famar"-Panos A. Marinopoulos. S.A., Athens, Greece) involving shipments to Vietnam by these two firms for the account of Solar and Pharma Scienta is set forth as follows: Invoice price by Solar and Pharma Scienta to Vietnam Importers--- $377, 766. 80 Invoice price to Solar and Pharma Scienta by ILF and "Famar"_ Mark up-- Percent---. 199, 634. 32 $178, 132. 48 89 Upon conclusion of work at Athens, investigation will be continued as to Gubbay and Richter organizations in Milan, Italy. Sincerely yours, MILTON SINGMAN, Foreign Assistance Inspector. EXHIBIT No. 24B [U.S. Government memorandum, May 2, 1966] To: Mr. Robert D. Elliott, PAB, Room 201 SA-1. Through: Mr. Marvin A. Bacon, C/FRD, Rm. 205A SA-1. From: Thomas A. Kennedy, D/MIS, Room 3669 NS. Subject: MIS Case No. 3146, Gedeon Richter Pharmaceutical Products, Inc., New York, N.Y. (S), Possible False Certification of Source Origin. Supplementing my memorandum of November 9, 1965, I enclose a copy of a Report of Investigation by Inspector Kenneth S. Christensen dated April 28, 1966, setting forth the results of his inquiry at the Richter plant in Sao Paulo, Brazil. Although no evidence of falsification of source or origin was noted in the Sao Paulo investigation, there is a serious question of overpricing raised both in the current Report and the previous Report of Inspector Arthur H. Crowl dated November 5, 1965. As discussed by Inspector Christensen and Mr. David Cohen, C/FRD, on April 6, you may wish to begin a computation of the total amount of these overcharges in preparation for submission of a refund claim against GEDEON RICHTER (New York), the supplier of record. We would have no objection to your submitting such a claim to the Office of the General Counsel for approval, unless our currently scheduled investigation at the Richter offices in New York showed evidence of intent to defraud AID through overpricing and false certification. In the latter event, we would, of course, want to refer the entire matter to the Criminal Division, Department of Justice, for review. Also scheduled for early completion is an investigation of possible source/ origin violation in connection with shipments invoiced by Gedeon Richter (N.Y.) out of Portugal. EXHIBIT No. 24C [Department of State, Agency for International Development, Management INVESTIGATIVE REPORT Report made at Washington, D.C. Period for Which Made: December 13, 1965. Report made by Kenneth S. Christenson. Title: MIS Case No. 3146, Gedeon Richter Pharmaceutical Products, Inc., New York, N.Y. (S). Date of report: April 28, 1966. Character of case: Possible False Certification of Source Origin. SYNOPSIS Investigation at plant of ORMONOTERAPIA RICHTER DO BRASIL, Sao Paulo, Brazil, confirmed Brazilian origin of products shipped to Vietnam by GEDEON RICHTER (N.Y.) out of the Sao Paulo plant. RICHTER of Brazil invoices RICHTER of New York at a price that is equal to or lower than the published domestic price which is controlled by Brazilian law. Ocean freight costs appear as a separate item on the Sao Paulo invoices. A comparison of the Sao Paulo and New York invoices (FOB Santos) reveals a mark-up by the latter ranging from 119 to 345 per cent. Pending. Reference: Report of Arthur H. Crowl, dated November 5, 1965. DETAILS Investigation was predicated upon a request contained in a memorandum of March 30, 1965, from Robert D. ELLIOTT, PAB, Office of the Comptroller, AID/Washington, indicating that pharmaceutical products shipped by the subject company from a subsidiary in Sao Paulo, Brazil, certified as being of Brazilian origin, might in fact be of French or Italian manufacture. Photocopies of documents pertaining to various shipments by this supplier from Brazil to Vietnam are attached as Exhibits designated and described as follows: I. Bureau Voucher No. 560 4491 for $20,951.51 paid at New York, N. Y., September 15, 1964. A. Supplier's invoice No. 5936/V-136 dated August 20, 1964, to Pharmacie La Thanh, Saigon, F.O.B. Santos $9,697.20; freight to Saigon $191.46; CIF $9,889.26 B. Supplier's certificate of source and origin dated August 20, 1964 C. Supplier's certificate of compliance with special provisions of letter of credit, dated August 20, 1964 D. Invoice-and-Contract Abstract, AID Form 280 (Obverse) covering "pharmaceutical products" E. Supplier's Certificate, AID Form 280 (Reverse) signed by Ernest LOWENS, President, August 20, 1964 F. Invoice-and-Contract Abstract, AID Form 280 (Reverse) covering ocean freight G. Supplier's certificate, AID Form 280 (Reverse) covering ocean freight signed August 20, 1964 for MOORE-McCORMACK (Navegacao) S.A. (illegible) H. Bill of lading No. 01 of MOORE-McCORMACK (Navegacao) S. A. dated August 20, 1964 II. Bureau Voucher No. 5604415 for $2,831.12 paid at New York, N. Y., September 14, 1965 A. Supplier's invoice No. 5934/V-134 dated August 20, 1964 to VINAMYD, Saigon, F.O.B. Santos $2,760.00; freight to Saigon $71.12; C.I.F. $2,831.12 B. Supplier's certificate of source and origin dated August 20, 1964 C. Supplier's certificate of compliance with special provisions of letter of credit, dated August 20, 1964 D. Invoice-and-Contract Abstract, AID Form 280 (Obverse) covering "pharmaceutical products" E. Supplier's Certificate, AID Form 280 (Reverse) signed by Ernest LOWENS, President, August 20, 1964 F. Invoice-and-Contract Abstract, AID Form 280 (Obverse) covering ocean freight G. Supplier's Certificate, AID Form 280 (Reverse), covering ocean freight, signed August 20, 1964, for MOORE-McCORMACK (Navegacao) S.A. (illegible) H. Bill of Lading No. 03 of MOORE-MCCORMACK (Navegacao) S. A., dated August 20, 1964 III. Bureau Voucher No. 560 2093 for $22,758.34 paid at New York, N. Y. on August 5, 1964 A. Supplier's invoice No. 5895/V-108, dated July 9, 1964, to Pharmacie Nguyen Van Trang, Saigon, F.O.B. Santos $5,105.00; freight to Saigon $106.67; CIF $5,211.67 B. Supplier's certificate of source and origin dated July 9, 1964 C. Supplier's certificate of compliance with special provisions of letter of credit dated July 9, 1964 D. Invoice-and-Contract Abstract, AID Form 280 (Obverse) covering "pharmaceutical products" E. Supplier's Certificate, AID Form 280 (Reverse) signed by Ernest LOWENS, President, July 9, 1964 F. Invoice-and-Contract Abstract, AID Form 280 (Obverse), covering ocean freight G. Supplier's Certificate, AID Form 280 (Reverse), covering ocean freight, signed July 9, 1964, for MOORE-MCCORMACK (Navegacao) S.A. (illegible) H. Bill of lading No. 01 of MOORE-McCORMACK (Navegacao) S.A. dated July 9, 1964 IV. Bureau Voucher No. 6200130 for $13,452.28 paid at New York, N.Y., July 2, 1965 A. Supplier's invoice No. 6241/V-302 dated June 16, 1965, to PHARMACIE CUA BAC, Saigon, F.O.B. Santos $3,450.00; freight to Saigon $90.51; CIF $3.540.51 B. Supplier's certificate of source and origin, dated June 16, 1965 C. Supplier's certificate of compliance with special provisions of letter of credit, dated June 16, 1965 D. Invoice-and-Contract Abstract, AID Form 280 (Obverse), covering "pharmaceutical products" |