Howard P. Richman, a former executive of Biopure Corp., was indicted yesterday in federal court in Boston for allegedly lying to a federal judge when he said he was gravely ill from colon cancer. Prosecutors claim that Richman did so in an attempt to force a settlement in a case brought against him by the SEC. The indictment charges Richman with one count of obstruction of justice, the Boston Globe reports.
In 2005, Richman and others at Biopure were sued by the SEC for allegedly misleading investors by touting a flagging synthetic blood product called Hemopure. The other defendants settled the SEC’s case against them but Richman did not. The Globe reports that in 2006, the SEC planned to take the case against him to trial, but Richman reported that he had cancer and his illness prevented him from participating in any pretrial processes, such as a deposition. In support of this story, Richman allegedly:
- submitted a phony letter from a concocted doctor stating his treatment included surgery and chemotherapy;
- told the court later in 2006 through his attorneys that the cancer had spread; and
- told the court in July 2007 that the cancer had worsened and that he now had an 8 percent to 15 percent chance of survival.
Metro International reports that Richman’s attorneys told the court that he had Stage III colon-rectal cancer and that it had “spread to his stomach and invaded his abdominal cavity.”
In July 2007, the court approved Richman’s request to postpone any final judgment, effectively ending the litigation. However, the Globe reports that the case was reopened in December 2007 at the request of Richman’s new lawyers.
Last month, Richman settled the SEC’s reopened case against him. He agreed to pay a $150,000 fine and will be permanently barred from serving as an officer or director of any public company.
Read the Metro International article
Read the SEC’s August 2008 Litigation Release
