US charging former Valeant executive and former Philidor CEO

(TSX:VRX), and Andrew Davenport, 48, the former CEO of Philidor Rx Services, were arrested. Tanner responded, “Will have to keep playing the game”, according to the complaint.

The complaint says that money was laundered through shell companies and came from a US$40 million payout Tanner received from Valeant. The executives he reported to were hesitant of his desire for the deal to happen because of his financial interest and pushed-back.

So who is Gary Tanner?

Valeant has become the focal point of anger from lawmakers and consumer groups over the dramatic drug price hikes at some pharmaceutical firms.

Although these criminal charges are specific to Tanner and Davenport, they add to the growing list of scandals attached to Valeant’s brand name.

This isn’t the first time Tanner’s been in the spotlight. If you happen to be reading this article on another website, it was stolen and illegally republished in violation of USA and global copyright law.

Valeant had “standards of business conduct” in place that prohibited employees from engaging in business relationships outside of the company.

Tanner’s lawyer said his client was innocent and regularly communicated with his Valeant bosses about his efforts to grow the company.

Federal prosecutors have charged former executives of Valeant Pharmaceuticals and a mail-order pharmacy it helped establish, Philidor, with wire fraud and conspiracy in an alleged scheme to bilk Valeant out of tens of millions of dollars. (I mean: for them.) What if they set up their own specialty pharmacy, Philidor, and then sent all of Valeant’s alternative-fulfillment business to themselves? Tanner has been identified by former Philidor employees as a key figure in the pharmacy’s operations.

Both men were arrested this morning. However, those didn’t materialize, according to the charges.

This seemingly endless barrage of bad news has caused Valeant shares to lose 80% of their value since last November, and unfortunately, investors got more bad news yesterday when two executives with close ties to Philidor were arrested for fraud. They also asked him to expand the company’s relationship beyond Philidor, to other specialty pharmacies.

Tanner’s employment at Valeant was terminated in August 2015.

What Valeant didn’t know, according to the charges, was that Tanner was communicating with Davenport on the sly.

Tanner had been instrumental in persuading other Valeant executives to purchase Philidor while failing to disclose his interest in the transaction, federal prosecutors said. The word translates into a Norwegian term for “liberation”. Davenport bought $20 million in securities and spent $50,000 to install a wine cellar.

When the Option Agreement was signed in December 2010, Valeant sent $100 million to the bank accounts of the beneficial owners of Philidor, including Davenport; that sum was followed soon thereafter by the $33 million time-based milestone payment.