[Listen to Lynda Mintz sing "Ya Got Trouble Right Here in Newtown" in this 2017 campaign video.]
A pharmaceutical company based in Newtown and two of its executives were charged with conspiracy to defraud the U.S. Food and Drug Administration, the U.S. Attorney's Office announced Friday.
Generic drug manufacturer KVK Tech, Inc., and Murty Vepuri, 69, and Ashvin Panchal, 50, were charged by indictment arising from the alleged distribution of unapproved drugs, as well as alleged efforts to mislead the FDA and conceal information which could impact drug safety and effectiveness.
The company was also charged with one count of mail fraud arising from the alleged sale of unapproved drugs to customers who believed the drugs were made with the approval of the FDA.
From October 2010 through at least March 2015, Vepuri and Panchal, the company's de facto owner and head of quality assurance, respectively, conspired to defraud the U.S. by impeding, impairing, and defeating FDA's mission to protect the health and safety of the public by ensuring that drugs marketed and distributed in the U.S. are safe and effective for their intended uses, according to the indictment.
Vepuri, who previously owned a drug company in New Jersey that was subject to a restraining order due to FDA violations, is charged with hiding his involvement in the Newtown company by placing its ownership in private trusts to benefit his children. Vepuri then allegedly represented to the FDA that he was merely an advisor or consultant to KVK Tech, when in reality he exercised unchecked authority over the company, federal prosecutors said.
Under his control, the company ignored regulatory requirements that had the potential to slow the manufacture, distribution and sale of its drugs, authorities said. Vepuri and Panchal are also charged with having provided false explanations to the FDA when inspectors identified violations. Often, Vepuri and Panchal attributed regulatory failures to a mistake or misunderstanding, and the company would falsely assure the FDA that violations had been addressed when they knew no corrective and preventative actions had been taken, the U.S. Attorney's Office said.
If convicted, Vepuri and Panchal each face a maximum possible sentence of five years in prison, three years of supervised release, a $250,000 fine and other financial penalties including forfeiture. KVK Tech faces fines up to $4 million and other financial penalties such as forfeiture and probation. The parties also face mandatory exclusion from participating in federal programs.
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I have suspected KVK Tech of being a bad actor for a long time. At the July 6, 2017, Zoning Hearing Board (ZHB), I objected to KVK Tech's request for zoning variances. At that hearing, representatives of KVK Tech testified under oath that the company's major selling products are opioids. Read more about that here.
At the December 12, 2018, public meeting, the Newtown Township Board of Supervisors voted 4 to 1 in favor of authorizing a law firm to file a suit against the manufacturers, promoters, and distributors of synthetic prescription Opioid medications on behalf of Newtown Township. KVK Tech was not on the list. I believe the reason for that was because of the resident and non-resident EIT income that the Township makes from KVK Tech employees. The Earned Income Tax (EIT) generated for KVK Tech for 2020 is Resident = $2,823.37 and Non Resident = $56,845.86 Total = $59,669.23
KVK has also in the past sponsored fireworks displays and donated money to the Newtown Fire Association to support its Beerfest fundraiser. I don't think we should be taking any further such donations from this company!
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