Pharma Exec Pleads Guilty for Conspiracy Role

He 'conspired to cheat America’s most vulnerable elderly consumers by raising prices for vital drugs.'

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According to court documents, from at least March 2013 until at least June 2015, Hector Armando Kellum, a former senior executive at a generic pharmaceutical company based in New Jersey, conspired to fix prices, rig bids, and allocate customers for generic drugs. 

The conspiracy affected products including, but not limited to, clobetasol and nystatin triamcinolone cream.  

Kellum’s co-conspirators included a generic pharmaceutical company headquartered in New York and various individuals, including Ara Aprahamian, who was indicted in Philadelphia on Feb. 4, 2020. Kellum has agreed to cooperate with the Antitrust Division’s ongoing investigation into criminal antitrust violations in the generic drug industry.

“With today’s guilty plea, the Antitrust Division continues its prosecution of high-ranking executives who conspired to cheat America’s most vulnerable elderly consumers by raising prices for vital drugs,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. â€śCompetition in our healthcare system is a critical focus for the Antitrust Division, and rooting out collusion by executives is a key priority in keeping our markets free.” 

Kellum is the fourth executive to be charged in this investigation, and the third to plead guilty. To date, two companies have also been charged. 

The corporate charges were resolved by deferred prosecution agreement.

A violation of the charged offense carries a statutory maximum penalty of 10 years in prison and a $1 million criminal fine for individuals. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

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